Malaysia will not lose out to neighbours - Zuraida on palm oil exports

 

Plantation Industries and Commodities Minister Zuraida Kamarudidn has said that Malaysia will not lose out to neighbour Indonesia after palm oil exports resume.

In a statement today, she soothed concerns from all local oil palm growers on Indonesia’s recent move to lift the ban on palm oil exports effective tomorrow (May 23).

“While a knee-jerk correction in palm oil price is inevitable given such a move which will somehow ease concerns over vegetable oil supply, the Plantations Industries and Commodities Ministry does not expect a big downward adjustment to crude palm oil (CPO) prices as the market is well aware that this ban was always going to be temporary,” she said.

Zuraida added that the recent weakening of CPO prices could have contributed to this.

The minister claimed that market analysts expect Malaysian planters to be the largest winners in the long run.

This is due to the ability to sell their CPO at high spot prices, which should entail a higher profit margin in the second quarter of 2022 among other things.

“While the export ban lifting is a big relief to Indonesia planters, they have certainly missed out on the high CPO price period (February-April) when Indonesia palm oil prices were trading at a larger discount to Malaysia with all the export control policies put in place since late-January,” she said.

Indonesia will lift its three-week-old palm oil export ban as a result of improvements in its domestic cooking oil supply.

The move by Indonesian president Joko Widodo was applauded by farmers amid mounting calls for its removal.

The world’s top palm oil exporter on April 28 halted shipments of crude palm oil and some derivative products to try to tame soaring prices of domestic cooking oil, surprising markets that were already rattled by earlier government intervention measures.

Govt could take advantage

Zuraida claimed that Indonesia’s policies could work to Malaysia’s advantage as the world’s second-largest palm oil producer as this would enable it to emerge as a dominant supplier to India which is the world’s largest importer of edible oils.

“Lastly, even as Indonesia resumes its palm oil exports on May 23 – barely a month after imposing the ban on April 28 – it may not end there given palm oil prices in its domestic market have yet to come down to the desired level,” she said.

“In fact, the lifting of the ban could result in a recurrence of domestic shortage in the country,” she added in parenthesis.

The minister expressed her optimism over the medium-to-long-term outlook of the country’s palm oil industry before calling on the support of all Malaysian oil palm growers to join hands in ensuring that the Malaysian Palm Oil Full of Goodness campaign was a success.

The campaign seeks to counter various misperceptions regarding the successes of the local palm oil industry. - Mkini