Source: MPOB

From January to April 2023, Malaysian palm oil export to Asia Pacific region increased by 38,975 MT or by 3.23% to 1.25 million MT compared to the same period in 2022. The main reason for the increase of Malaysian palm oil export to this region is the higher import of palm oil particularly by China, Japan, South Korea & Taiwan.

China remain as the biggest importer of Malaysian palm oil in the region with 435,949 MT of imports during the January to April 2023 period, an increase of 51,724 MT from the previous year contributed by rebound in domestic consumption as prices dropped from their peak in June 2022 and resumption of economic activities following the cessation of zero-COVID policy restrictions in December 2022.

The imports of Malaysian palm oil by Japan and South Korea increased by 10.58% and 35.30% to 171,741 MT and 126,935 MT respectively compared to the same period in 2022. The increase of Malaysian palm oil import in Japan is due to relaxation of Covid-19 entry restriction, which has led to the return of international tourists to Japan in Year 2023. Additionally, devaluation of Japanese Yen may support palm oil consumption as Japan seeks to boost exports of processed food products. In South Korea, palm oil is primarily used for food processing, especially ramen (instant noodle) production. The consumption of palm oil for food purposes is anticipated to experience a slight decline in year 2023, as there is a growing preference for alternative oils. Consequently, the primary factor driving the increase in Malaysia’s palm oil imports to South Korea is the reduction in imports from Indonesia. From January to March 2023, palm oil imported from Indonesia to South Korea decreased by 18,000 MT or 13.04% compared to the previous year, resulting in a higher reliance on Malaysian palm oil imports.

Malaysian palm oil export to the Philippines recorded a steep decrease of 90,553 MT or by 40.22% to 225,152 MT during this period which is also reflected in the lower Indonesia palm oil export to Philippines which dropped 6.41% from 78,000 MT to 73,000MT between January and March 2023. The decline in palm oil imports from both Indonesia and Malaysia in the Philippines can be attributed to high palm oil stock carried over from 2022.  According to Oil World, Philippines’ palm oil ending stock in year 2022 was 215,000 MT, representing a 30.3% increase compared to 165,000 MT in year 2021. Palm oil consumption in 2023 is expected to remain stable compared to 2022. Therefore, it is anticipated that palm oil imports in the Philippines will see a resurgence in the second half of 2023.

Taiwan has experienced relatively stable palm oil imports over the past 6 years, ranging from 215,000 MT to 230,000 MT, as per data from Taiwan customs. In 2022, Malaysia dominated the market by exporting a total of 227,487 MT of palm oil to Taiwan, which accounted for 97% of Taiwan’s total palm oil imports, contributed by existing joint venture between Malaysian and Taiwanese companies. It is forecasted that Taiwan’s palm oil imports from Malaysia will remain unchanged compared to 2022. From January to April 2023, Malaysia has exported 76,368 MT of palm oil to Taiwan, accounting for 33% of the total imports in 2022, indicating a consistent import.

As for other countries in the Asia Pacific region, most countries have turned to Malaysian palm oil as Indonesia implemented stricter measures on palm oil exports since February 2023. In May, Indonesia further reduced the export tax and levy on crude palm oil to USD 169 from USD 224 in April, as well as easing their export policy starting from 1^st May with the aims to boost their palm oil export volume.

Breakdown of MPO Exports to the Asia Pacific Region (MT) January to April 2023

*Including ISCC, RSPO Mass Balance and RSPO from Segregated Categories
Source: MPOB