Palm Oil News: Malaysia expects production rebound, rules out export restrictions
Malaysia has ruled out export restrictions and also expects production to rebound later this year as pandemic-related restrictions ease. Many countries around the world are embracing food protectionism to secure local supplies and combat rising food prices, fueled in part by supply shocks caused by the war in Ukraine. Indonesia had temporarily banned palm oil exports but recently lifted it with some runners.
Here are 10 changes:
1) Malaysia has ruled out cutting cooking oil exports as it has enough supplies to meet domestic demand.
2) Malaysia expects palm oil production to rebound to 23-25m tonnes in 2022 from 18.1m tonnes last year amid labor shortages due to the pandemic are easing and that foreign workers are allowed to return to the fields.
3) The labor situation on local plantations is likely to return to pre-pandemic levels by June, as problems with admitting foreign workers are being resolved, which will put Palm oil yields on track to increase in the second half of the year, said Plantation Industries and Commodities Minister Zuraida Kamaruddin.
4) Indonesia has reopened exports of 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 has yet to release details of the DMO, but Chief Economy Minister Airlangga Hartarto said the goal is to keep 10 million tons of cooking oil at the home.
6) Last year, Indonesia produced 51 million tons of palm oil and palm oil, of which about 9 million tons were consumed locally for food.
7) Indonesia is the biggest exporter of palm oil – used in everything from margarine to shampoo – accounting for around 60% of the world’s supply.
8) To restrain domestic edible oil prices, the Indian government has allowed duty-free imports of 2 million tons each of crude soybean oil and crude sunflower oil for the current and next fiscal year until March 2024.
9) India, which imports more than two-thirds of its edible oil, had previously abolished the basic import tax on crude palm oil, crude soybean oil and crude sunflower oil, but maintained a 5% tax known as the Agriculture Infrastructure and Development Cess (AIDC) on these three grades of edible oils.
10) The industry body, Solvent Extractors Association of India, had called on the government to also consider reducing or abolishing the 5% AIDC on crude palm oil. (With contributions from the agency)