Overview of the Malaysian Oil Palm Industry
Datuk Dr. Yusof Basiron, General Director of the Malaysian Palm Oil Board reports..
"The Malaysian oil palm industry in 2003 flourished under the tight world oils and fats supply situation. The higher growth of world demand over that of production has resulted in an increase in export demand and prices for all Malaysian oil palm products.
The production of crude palm oil (CPO) in 2003 increased markedly by 12.1% or 1.4 million tonnes to 13.35 million tonnes from 11.91 million tonnes in 2002. The production of crude palm kernel oil also rose substantially by 11.6% to 1.64 million tonnes from 1.47 million tonnes the previous year. The increase was mainly attributed to the expansion in matured planted area, favourable weather conditions and rainfall distribution as well as constant sunshine throughout the year. The pollination and formation of oil palm fruits were excellent. Thus, the fresh fruit bunches yield per hectare increased by 5.7% to 18.99 tonnes from 17.97 tonnes last year. However, the oil extraction rate (OER) fell to 19.75% in 2003 from 19.91% last year.
The total export of oil palm products, constituting palm oil, palm kernel oil, palm kernel cake, oleochemicals and finished products increased substantially by 14.2% or 2.09 million tonnes to 16.78 million tonnes in 2003 from 14.69 million tonnes in 2002. The increase in total export value was much more impressive, soaring by 33.1% or RM6.50 billion to RM26.15 billion compared to RM19.64 billion in 2002. The favourable growth in exports was due to the tight world oils and fats supplies, higher growth in export demand and depleting world stock levels which resulted in higher prices of oils and fats including oil palm products.
Exports of palm oil increased by 12.5% or 1.36 million tonnes to 12.25 million tonnes from 10.89 tonnes in 2002. China P.R not only remained as the biggest market but also achieved the highest market growth with exports accelerating by 38.4% or 0.71 million tonnes to 2.55 million tonnes (20.8% of total palm oil exports) from 1.84 million tonnes in 2002. The European Union came in second accounting for 1.69 million tonnes (13.2% growth and 13.8% share). India was third with 1.59 million tonnes (but 5.0% reduction in growth and 13.0% share) followed by Pakistan with 1.10 million tonnes (1.3% growth and 9.0% share).
The second major product exported in 2003 (in terms of value) was oleochemicals which increased by 22.4% or 0.28 million tonnes to 1.55 million tonnes from 1.27 million tonnes in 2002. The major oleochemicals exported were Fatty Acids (0.71 million tonnes or 45.5% of oleochemicals exports), Fatty Alcohol (0.28 million tonnes or 18.2%), Methylester (0.19 million tonnes or 12.4%), Glycerine (0.18 million tonnes or 11.9%) and Soap Noodles (0.18 million tonnes).
The major market for oleochemicals were the European Union (0.50 million tonnes or 38% share and up by 21.7%), China PR (0.21 million tonnes or 13.4% and up by 34.7%), USA (0.19 million tonnes or 12.6% but down by 5.1%) and Japan (0.16 million tonnes or 10.6% and up by 15.3%).
The end of the year stock level of palm oil was 2.5% higher at 1.17 million tonnes compared to 1.14 million tonnes last year. The higher end December stock was due to the unprecedented surge in the month’s production, while export remained lower as normal during this month.
The average prices of oil palm products strengthened in 2003 driven mainly by robust export demand, draw down in stock levels, sharp rise in soyabean oil prices and continued tightness in global oils and fats supplies. The average CPO price increased by 13.2% or RM180 to RM1,544 as against RM1,363 the previous year. The lowest and highest monthly average price were recorded in August and November at RM1,398 and RM1,866 respectively. The highest daily price was RM1,950 in late October while the lowest was RM1,372 in mid-August. Subsequently the average export price for RBD palm oil rose by RM259 or 19.2% to RM1,613; RBD palm olein up by RM247 or 17.1% to RM1,695; and RBD palm stearin increased by RM124 or 9.8% to RM1,399. For plantation companies and smallholders, 2003 had been a remunerative year as the average price of FFB at 1% OER increased by 18.4% or RM2.43 to RM15.62/tonne from RM13.19/tonne the previous year.
The world oilseed and seed oil production in 2004 are expected to respond pronouncedly to the high price situation in 2003. However for palm oil, due to its cyclical nature, the production growth in 2004 is expected to be smaller. Coupled with a sharp reduction in world oils and fats ending stocks last year, the supply situation in 2004 is anticipated to remain tight.
Based on this background, the Malaysian oil palm industry in 2004 is forecast to remain bullish. The production of CPO is projected to increase by 2.3% to 13.66 million tonnes and prices are expected to remain firm this year."
EMAIL ALERTS
