POINTERS: Malaysian Palm Oil Supply and Demand Updates for 2021

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Questions & Answers (14) :

HCLeow

3 years ago

Dear Dr. Ahmad, Does MPOB keep track on the ganoderma affected areas ? Are the affected areas rising more rapidly over the last 2 years?

POINTERS SECRETARIAT:
Posted on behalf of Dr Ahmad Parveez The survey on Ganoderma disease spread in oil palm estates in Malaysia is being carried out every 5 years interval. The last survey was carried out in 2017, whereby 221,000 ha from 2,570 estates responded to the survey were affected by the Ganoderma disease. In 2010, MPOB has reported 59,148.02 ha Ganoderma infected areas. MPOB has also conducted Ganoderma survey among the smallholders under the Oil Palm Smallholders Replanting scheme (TSSPK), whereby 8,752.87 ha from 4,490 smallholders’ plantations were affected. The next Ganoderma nationwide disease survey will be conducted in 2022.
3 years ago

MOHD RAFIZAN BIN SAMIAN

3 years ago

What are the factors contributing to the surge of palm oil import from Kenya?

POINTERS SECRETARIAT:
Posted on behalf of Dr Ahmad Parveez : PO intake by Kenya increased by 29.9% to 0.41 million tonnes due to higher re-export activities to neighbouring landlocked countries (Burundi, Uganda & Ruanda). In addition, the increase was due to higher intake of CPO for further processing due to lower import duty compared to PPO. Exports of CPO to Kenya surged by 47.7% or 110,996 tonnes to 343,902 tonnes in Jan-Sept 2021 as against 232,906 tonnes during the same period in 2020.
3 years ago

Nur Fairuz

3 years ago

Looking at your MPOB’s website status report, there is no oleochemical plant in Sabah and Sarawak. Why? Figures by port shows that in Sabah, for Jan-September 2021, other ports accounted for a huge amount of 3,185,111 MT or 58.7% of the 5,425,630 MT of the East Malaysia’s export. Other than Lahad Datu and Sandakan, is there other major ports in East Malaysia that exports palm oil or palm oil there is exported to many small ports?

POINTERS SECRETARIAT:
Posted on behalf of Dr Ahmad Parveez : MPOB does not impose any restrictions on investment in the oleochemical sector in Sabah and Sarawak. In fact, there are four Palm Oil Industrial Clusters (POIC) that have been established in Sabah and Sarawak – two each in Sabah and Sarawak respectively. The establishment of POIC is to facilitate the development of the oil palm industry, specifically for the development of palm-based downstream industry, that produced high value-added products. This includes the refining, oleochemicals and biodiesel sector. Other than Lahad Datu and Sandakan, Bintulu is also another major port in East Malaysia. Apart from that, there are also other ports in East Malaysia, such as Kunak, Tawau, Senari and Kuching that handle small volume of exports.
3 years ago

Sudarman bin Sudirman

3 years ago

Dear Dr. Ahmad Parveez Bin Ghulam Kadir, 1. Indonesia plans to stop exporting CPO to focus on producing and selling processed value-added derivative products (which is high end and niche products). What is our response to this plan? Do we have a similar plan? 2. What is our next plan to increase and strengthen the acceptance / recognition of our MSPO certification at international level, especially among CPO buyers. When is our forecast of MSPO to be fully accepted as substitute of RSPO?

POINTERS SECRETARIAT:
Posted on behalf of Dr Ahmad Parveez : The Indonesian plan to stop exporting CPO will have an impact on us as both countries are the two major sources for palm oil. If it is to be materialized, then Malaysia will become the major source for CPO. This may affect our domestic processing sector as they may not have enough raw material for further processing. Thus far, the Malaysian Government has yet to announce any plan to curb the exports of CPO. Being the export-oriented industry, more than 85% of palm oil produces is exported primarily in the form of processed/refined products (PPO). Nevertheless, the export volume of CPO has seen gradually taking the portion that was made by the PPO arising from the import policy introduced by the Indian Government. MSPO will not be a substitute for RSPO or any other palm oil sustainability certification that currently exist in the market. MSPO is complementing other sustainability certification. In the bigger picture, MSPO will help Malaysia to ensure 100% of its palm oil are sustainably certified. In order to increase and strengthen the recognition of MSPO, continuous engagement and collaboration with major Malaysian palm oil export market especially EU, India and China is important to promote MSPO as a premium choice for sustainable palm oil products. As MSPO was recognized by Tokyo Organizing Committee on Olympics and Paralympic Games (TOCOG) 2020, we believe that other countries which will be organizing Olympic, Paralympic or winter games would also recognizing MSPO.
3 years ago

Chee Shiau Thing

3 years ago

Dear Dr. Ahmad Parveez Bin Ghulam Kadir, Thank you so much for the presentation to sharing with us on Malaysian Palm Oil Supply and Demand Updates for 2021. Are there any particular ways or methods to be taken to increase the CPO production and Palm Oil Exports since the decreasing problem compared to few years ago, especially to the major markets? Thank you!

POINTERS SECRETARIAT:
Posted on behalf of Dr Ahmad Parveez : The low export of palm oil during January to September 2021, which declined by 12.0 % to 11.24 million tonnes as against 12.77 million tonnes during the same period in 2020 was due to the lower production of palm oil during the period. Despite the lower export volume, demand for palm oil in certain markets are still stable. In India, exports of palm oil during the nine months 2021 surged by 60.6% to 2.49 million tonnes and Iran increased by 63.2% to 0.36 million tonnes. MPOB is committed to improve the palm oil productivity through mechanization and automation. MPOB has emphasized on the usage of high yielding planting materials in order to boost the palm oil productivity in the long term. In term of export performance, MPOB continues to enhance trade cooperation with importing countries as well as carried out promotional activities for palm oil products. MPOB’s regional office continues to carry out activities such as market visit, participating in trade fairs and giving the technical advisory services on the benefit of using palm oil in product formulations.
3 years ago

Mazatul Aishah

3 years ago

We have seen many initiatives been taken by the Malaysian Government to improve their rating in the human rights issues for the palm oil industry based on the Trafficking in Person Report published in June 2021. These are mainly due to foreign labour issues. Are there any initiatives between MPOC and MPOB to collaborate to manage these foreign labour recruitment issues and find the solutions to maximize the recruitment of foreign labour to solve the shortages of labour in plantations? Malaysian rating is down to Tier 3 as compared to Tier 2 and the impact on the palm oil business. How can the infrastructure for the palm oil industry be provided to maximize its operation?

POINTERS SECRETARIAT:
Posted on behalf of Dr Ahmad Parveez : To date, there is no collaboration between MPOC and MPOB has been established in regards to the labour issue particularly the human right issues. However, as the agencies under the Ministry of Plantation Industries and Commodities (MPIC), MPOB and MPOC have been actively providing information and ideas to the ministry in addressing these issues. Since the policies on the employment of foreign workers is beyond the jurisdiction of our ministry, our effort in addressing the issue are more focused on educating the industry players on forced and child labour and enhance labour practice through MSPO. Since August 2020 until now, MPOB together with MPIC have held seven (7) series of dialogue session with the industry player so as to educate them on the elements and the indicators of forced and child labour. These sessions were also attended by ILO representatives. This initiative is expected to eliminate the probability of the occurrence for forced and child labour cases. Hence, improving the image of the Malaysian palm oil industry. In terms of the infrastructure, plantation companies are encouraged to provide the workers with minimum standards facilities according to Act 446 (Amendment) 2019 on Workers' Minimum Standards of Housing and Amenities. The enforcement of Act 446 is under the purview of the Ministry of Human Resources.
3 years ago

Mohd Feroize

3 years ago

Q1) In your release of the CPO export tax, can we know how can we get those figures you use to calculate the reference price of which the export tax is computed. Is it based on the prices MPOB release in the website. Q2) In your effort to help to mechanise the oil palm industry, is there also programme that could help the smaller oil palms cultivator e.g. those with 10 hectares. We too have labour shortage problem. We are looking for smaller harvesting tools to help in our operation. Thank you.

POINTERS SECRETARIAT:
Posted on behalf of Dr Ahmad Parveez : The CPO reference price for setting the export duty rate is from the Royal Malaysian Customs Department (RMCD). MPOB only provide RMCD with the monthly average of CPO price (FOB US$/T) as reported by exporters via e-Registration system of MPOB. RMCD will use their own exchange rate to determine the gazetted CPO price in Ringgit Malaysia (RM). After getting clearance from RMCD, the gazetted CPO price will be published on MPOB website for industry reference. MPOB has produced more than 50 research technologies on palm mechanisation and automation that are ready to be commercialised. Among them is the Cantas Electro – a motorised cutters for harvesting purposes which is powered by a battery system. Due to its lightweight and lesser vibration as compared to the previous Cantas version, Cantas Electro is suitable to be used by all types of planters especially the small and medium oil palm estates as well as the independent smallholders. For further information on the product, kindly contact Mechanisation and Automation Unit of MPOB at rizal.ahmad@mpob.gov.my.
3 years ago

Ng Ivy

3 years ago

Hi Dr, Are there any particular reasons why planted oil palm area in Malaysia has declined compared to a year ago. Is this due to conversion of land to other crops, abandoning of estates or other technical issues. Thanks.

POINTERS SECRETARIAT:
Posted on behalf of Dr Ahmad Parveez : The Malaysian oil palm planted area as of September 2021 had decreased to 5.77 million hectares from 5.86 million hectares as of September 2020, partly due to the delay in replanting activities arising from the prolonged MCO in Malaysia. In addition, the reduction in planted area is also attributed to the changes in MPOB licensing procedure of the independent smallholders in order to track and certify all independent smallholders with MSPO, whereby the renewal of the license is no longer on automatic basis but upon the application of the smallholders themselves.
3 years ago

George Teh

3 years ago

Dear Dr. Ahmad Referring to your slides #6 and #10, is the 10.7% y-o-y slide in FFB yield (which you attribute to labour shortage and pandemic management measures) a cause for concern? Do you foresee a recovery to pre-pandemic FFB yield level in the next year or so? Are any measure necessary to curtail further slide, in particular if current price level could not sustain after 2022 (or 2022H2 by some less optimistic forecasts)? Thank you.

POINTERS SECRETARIAT:
Posted on behalf of Dr Ahmad Parveez : In order to increase the FFB yield, the problem of labour shortage needs to be addressed immediately. The government’s announcement of permission to bring in 32,000 foreign workers is expected to help the industry in raising the level of palm oil production back to the target of 20 million tonnes a year. On top of that, the plantations companies are encouraged to increase level of mechanisation and in a situation where CPO prices are currently high then it is a good time for plantation companies to invest on mechanization to reduce reliance on manual labour and thus increase their productivity.
3 years ago

William Yap

3 years ago

Dear Dr. Ahmad, How will the production of cpo expected to increase with the shortage of labors still persist in coming months going into 2022?

POINTERS SECRETARIAT:
Posted on behalf of Dr Ahmad Parveez : It is expected that the situation in the remainder of 2021 will not change much from the current situation. FFB production is likely to decrease in the coming months, especially in November and December, due to the upcoming monsoon season and shortages of harvesters in the plantation sector, thus will affect Malaysia's CPO production in 2021. Coming 2022, as Malaysia is currently in the midst of the endemic phase transition of COVID-19, the Government of Malaysia has permitted foreign labour to enter the country. For the starting, around 32,000 foreign workers have been approved to be brought in to address the labour shortage in the oil palm plantation. This is expected to improve the labour situation in the oil palm plantation, hence Malaysia is expected to gain some recovery in palm oil production in 2022.
3 years ago

VS LEE

3 years ago

Dear Dr. Ahmad, Does Malaysia has moratorium to limit the increase of oil palm plantation area like Indonesia?

POINTERS SECRETARIAT:
Posted on behalf of Dr Ahmad Parveez : Malaysia does not have any moratorium to limit the oil palm plantation area like Indonesia. However, the Government of Malaysia is committed in limiting the total oil palm cultivated area to 6.5 million hectares, as well as maintaining at least 50% of its landmass under forest cover as pledged during the Rio Earth Summit in 1992. Based on available statistic from the Ministry of Energy and Natural Resources, Malaysia has 55.3% of land consisted of forested areas.
3 years ago

Candy Lee

3 years ago

Is 3rd month BMD sustainable at RM5,000 until end of this year?

POINTERS SECRETARIAT:
Posted on behalf of Dr Ahmad Parveez : Analysts estimate that the price of CPO is expected to stay at high levels (above RM4,000 per tonne) until early first quarter of 2022. The current high price can be lasting if the fundamental and market sentiment factors continue to support the prices. Starting November-December 2021, the price is expected to be stabilized around RM4,000 - RM4,500 per tonne. For the record, the highest average daily price in the history of Malaysian palm oil industry was recorded at RM5,366.50 per tonne on 21st October 2021 with the highest and lowest traded contract were at RM5,430.00 per tonne and RM5,200.00 per tonne respectively.
3 years ago

Amy

3 years ago

Can you please explain a bit more detail on what happens to China palm oil market. Malaysia’s palm oil exports drop by a hefty 812,215 MT or 38.8% to 1,279,824 MT for Jan-Sept. period. Has the market palm oil imports in the country drop sharply. Could you explain also why exports to other big markets like Bangladesh and EU also drop. What actually is the market situation over there.

POINTERS SECRETARIAT:
Posted on behalf of Dr Ahmad Parveez : The decline in export of Malaysian palm oil to China was due to strong competition from the Indonesian exporters in view of the revision in export tax and levy that raises its price competitiveness. For the period January to August 2021, Malaysia’s palm oil exports to China reduced by 43.2% to 1.04 million tonnes. On the other hand, exports of palm oil from Indonesia increased by 51.0% to 2.99 million tonnes. Similar to China, the decline in export of palm oil to Bangladesh was also due to higher uptake of palm oil from Indonesia. During January-August 2021, Malaysia’s export of palm oil to the country declined by 66.1% to 0.74 million tonnes whilst export of palm oil from Indonesia rose by 23.2% to 0.83 million tonnes. For the EU, the decline in export of palm oil was due to the tightening supply of palm oil due to lower production and lower demand from the edible and non-edible sectors.
3 years ago

RAJANGAM SRIRAM

3 years ago

Good Morning sir and thanks for your informative presentation. A quick question on the current Scenario of tussle between Malaysia & US banning Malaysia product due to forced labor, where quite a large shipment have been rejected and sent back. How are you approaching this and what is MPOB & MPOC body doing to ease this issue and bring back the relation back to normal by Influencing US to accept all Malaysian palm product into US ?

POINTERS SECRETARIAT:
Posted on behalf of Dr Ahmad Parveez : MPOB Washington DC had already established contact with the US Customs and Border Protection (CBP) even before the imposition of the Withhold Release Orders (WRO). MPOB Washington DC had convened discussions with the two respective Malaysian companies imposed with the WRO and provided related updates and recommendations based on information obtained from the CBP. MPOB shall continue exchanging information with these companies and shall provide the latest updates in due course. On top of that, MPOB continuously collaborates with the Malaysian Palm Oil Certification Council (MPOCC) to strengthen and promote the Malaysian Sustainable Palm Oil (MSPO) Certification Scheme to the Bureau of International Labour Affairs (ILAB) under the US Department of Labour (DOL). The main purpose of the MSPO is to get the entire industry, large plantations and smallholders, to adopt more sustainable practices in the industry.
3 years ago