KUALA LUMPUR: The global demand for palm oil is expected to contract by 4% or 3.2 million tonnes due to the impact from Covid-19, which has mainly affected the food sector, the Malaysian Palm Oil Council (MPOC) said today.
According to global statistics for 2019, the demand for palm oil stood at 71.48 million tonnes, followed by soybean oil (55.46 million tonnes), rapeseed oil (27.62 million tonnes), sunflower seed oil (19.33 million tonnes), palm kernel oil (8.56 million tonnes) and peanut oil (6.12 million tonnes).
MPOC regional manager Desmond Ng said China’s catering industry had been adversely affected by the pandemic, and its cumulative income has dropped by 23.9% as of September.
Speaking at MPOC’s webinar series titled “China’s palm oil demand and recovery post-pandemic”, Ng noted that the slow demand was expected due to the health crisis that had disrupted the whole supply chain.
As for the plantation industry, he said the pandemic has somewhat contributed to lower production with the prohibition on air travel and with migrant workers not allowed to return and resume work in local plantations.
It was reported that Malaysia is losing up to 25% of its potential palm oil yield due to the labour shortage.
As the world’s second largest palm oil producer, Malaysia relies on workers from countries such as Indonesia and Bangladesh, where they account for 84% of its plantation workforce.
Besides the labour shortage, palm oil production is also facing lower growth due to the rainy season, a drop in fertiliser application, the decline in replanting activities as well as aging palm trees, Ng said.
On the bright side, he said the implementation of the biodiesel B30 mandate may prove to be a saviour for the time being, but voiced his concern on the slow pace of the implementation.
He also noted that other major palm oil importing and consuming countries are also facing double reduction in imports and consumption this year. - FMT
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