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Business News/ Markets / Commodities/  Palm oil news: Malaysia expects production rebound, rules out export curbs
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Palm oil news: Malaysia expects production rebound, rules out export curbs

Malaysia expects a jump in palm oil production as pandemic-driven labor shortages ease and foreign workers are allowed back in estates.

Bottles of cooking oil made from palm oil are displayed at a supermarket in Abidjan, Ivory coast (REUTERS)Premium
Bottles of cooking oil made from palm oil are displayed at a supermarket in Abidjan, Ivory coast (REUTERS)

Malaysia has ruled out export curbs and also expects production to rebound as later this year as more pandemic-related curbs ease. Many countries around the world are taking to food protectionism to secure local supplies and battle rising food costs, stoked in part by supply shocks caused by the war in Ukraine. Indonesia had temporarily banned palm oil exports but recently lifted it with some riders. 

Here are 10 developments:

1) Malaysia has ruled out curtailing cooking oil exports as it has enough supplies to meet domestic demand. 

2) Malaysia expect palm oil production to rebound to 23 million to 25 million tons in 2022, versus last year’s 18.1 million tons, as pandemic-driven labor shortages ease and foreign workers are allowed back in estates.

3) The labor situation in local plantations will likely return to pre-pandemic levels by June as issues with foreign worker intake are being ironed out, setting palm oil yields on track to climb in the second half of the year, said Malaysia's Plantation Industries and Commodities Minister Zuraida Kamaruddin.

4) Indonesia reopened exports for crude palm oil (CPO) and some of its derivative products from May 23 but export permits will be required to show companies have met a so-called Domestic Market Obligation (DMO).

5) The Indonesian government is yet to make public details of the DMO, but chief economics minister Airlangga Hartarto said the target was to keep 10 million tonnes of cooking oil at home.

6) Last year, Indonesia produced 51 million tonnes of CPO and kernel oil, with around 9 million tonnes consumed locally for food.

7) Indonesia is the biggest exporter of palm oil - used in everything from margarine to shampoo - accounting for about 60% of world supply.

8)  To keep a lid on domestic edible oil prices, Indian government has allowed duty-free imports of 2 million tonnes each of crude soyoil and crude sunflower oil for the current and the next fiscal year to March 2024. 

9) India, which imports more than two-thirds of its edible oil, had earlier abolished the basic import tax on crude palm oil, crude soyoil and crude sunflower oil, but continued with a 5% tax known as the Agriculture Infrastructure and Development Cess (AIDC) on these three grades of edible oils.

10) Industry body the Solvent Extractors' Association of India had requested the government to also consider cutting or abolishing the 5% AIDC on crude palm oil. (With Agency Inputs)

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Published: 25 May 2022, 09:41 AM IST
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