KUALA LUMPUR, April 19 — The Malaysian Palm Oil Council (MPOC) is optimistic that Malaysia can maintain and even grow its palm oil market share in India, Europe, Central Asia and the Middle East.
In its First Digital Market Forum webinar titled Navigating Market Opportunities and Challenges in 2023 today, the council shared updates on the development and opportunities in some of Malaysia’s key markets with its stakeholders.
MPOC India regional manager Bhavna Shah said India would remain an important market for palm oil as 60 per cent of its domestic edible oil consumption depended on imports.
Out of 15.12 million tonnes of imported edible oils in 2022, 62 per cent was palm oil.
“However, the (average) consumption per person is about 17.5 kilogram (kg) compared to the world’s average consumption of over 30 kg. Therefore, there is still a huge gap, (indicating) bigger potential,” she said.
Bhavna said India’s food consumption growth would bode well for palm oil driven by its growing fast-moving consumer goods industry, booming new start-ups and rising popularity of big fat weddings with spending amounting to US$15.5 billion (RM68.6 billion) this year.
However, would be long-term challenges as a shift towards soft oils could occur if the price gap would narrow between edible and soft oils.
For Central Asia, MPOC Russia regional manager Aleksey Udovenko said the council would be focusing on the 100,000-tonne market of Kazakhstan and Uzbekistan as its new potential but challenges remained, particularly on logistics and payment terms.
He said the market for the two countries would differ, as Kazakhstan is interested in the supply of refined palm oil in flexible containers.
Furthermore, Uzbekistan’s confectionery industry is actively developing, hence, the need for confectionary fats.
However, Udovenko said the vast majority of importers are interested in deferred payments while no suppliers are ready to pay 100 per cent prepayment.
For the Middle East, MPOC Saudi Arabia regional manager Muhammad Kharibi said palm oil is the most preferred edible oil, dominating over 60 per cent of the market share in Saudi Arabia, and its imports had been on the rise as suppliers were able to offer competitive prices.
He said palm oil is the main edible oil imported into the region following the rapid growth of the hotel, restaurant and catering (HORECA) industry in Saudi Arabia and this provided great opportunities for Malaysian palm oil to fulfil this growing demand.
“With 100 million visitors projected to enter the country this year, Saudi Arabia is becoming a vibrant economy for investment and tourism.
“With the right strategy, Malaysian companies can tap into the consumer market in this region,” Muhammad said.
Meanwhile, MPOC European Union (EU) regional manager Uthaya Kumar said the EU Deforestation Regulation (EUDR) would go through the voting process to be formally adopted and thus enter into force by next month.
He said that in 18 months, operators and traders must comply with the regulation and in 24 months, small and medium enterprises must follow suit.
Uthaya said the implementing Act would be out in the first quarter of next year.
Nevertheless, Malaysia’s palm oil exports to the EU in the 2023 – 2024 period are projected to be around seven million tonnes a year despite EUDR mandatory compliance in 2025 onwards.
60 per cent of EU palm oil imports were for bio-diesel alternatives and with no alternative available at the moment, the EU would still need Malaysia’s palm oil, which is definitely a sustainable product in the long term.
Meanwhile, he said the industry players and suppliers would also need to focus on central-eastern Europe where palm wax would be in demand for the candle industry and at the same time, explore the cosmetic and personal care industry to expand their market into the EU.
— Bernama
