KUALA LUMPUR (Jan 5): Total Malaysian palm oil production is expected to increase slightly by 200,000 tonnes to 19.6 million tonnes in 2021, versus 19.4 million tonnes a year ago, according to the Malaysian Palm Oil Council (MPOC).

However, this also means that the projected Malaysian palm oil production still fell short against 19.8 million tonnes in 2019.

Going into 2021, MPOC chief executive officer Datuk Dr Kalyana Sundram, in a virtual conference at the Palm Oil Trade Fair and Seminar 2021 today, said the palm oil global supply is expected to be affected by the La Nina weather pattern.

“Disruptions from persistent heavy rainfall in Southeast Asia in 2020 may lead to tight global supply this year,” he added, noting that there will be a deficit in the global supply of vegetable oils as unfavourable weather disrupting production of soybean, sunflower and rapeseed oil will continue to put pressure on the edible oil prices.

Meanwhile, Malaysia’s crude palm oil (CPO) export is estimated to be at 4.5 million tonnes, of which India, the Netherlands, Kenya, Italy and Spain are among the major markets.

“Malaysian CPO export to India in 2021 is likely to stay strong as the current levy on Indonesian CPO export will give a price advantage to Malaysia,” said Kalyana, noting that this is despite the re-imposition of Malaysian CPO export duty from January 2021.

Note that imports to India rose significantly from June onward after the zero CPO export tax from Malaysia, which in turn helped support CPO prices in the second half of last year.

However, palm oil export from China — which also saw strong demand last year — will be challenged due to lower and prices of other oils versus palm oil, said Kalyana.

Source : The Edge Markets