Table 1: A Review on MPO Export Performance (MT)

Source: MPOB

During Jan-Apr 2023 period, MPO exports to the South Asian region registered a total of 1,131,070 MT against 1,215,298 MT which was registered during the same period of last year, a decrease of 84,228 MT or by 6.93%. India holds the biggest market share of 69% as the largest importer of MPO in this region.

The decrease in MPO during this period could be contributed by the narrow price spread between palm oil and soft oils in recent weeks that led to higher demands of soft oils as can be seen in major markets such as India. The Indonesian factor was also another driver that resulted in the decrease of MPO exports to this region.

Table 2: MPO Exports to India by Type of Products (MT)

Source: MPOB

MPO exports to India during Jan-Apr 2023 decreased by 14.08% from 912,032 MT to 783,663 MT contributed by several factors such as rare palm oil premium over other edible oils, high supply of soft oils and easing of Indonesian export policy. During the four months of 2023, palm oil imports from Indonesia has increased by 48% Y-o-Y reducing the imports from Malaysia with Indonesia easing its export policy. Imports from Thailand more than doubled during the period compared to previous year.

In April 2023, bumper South American soybean crop availability, Argentinian soybean dollar scheme along with cheaper availability of sunflower oil have led to palm oil prices into premium over soft oils which increased the share of soft oils in total vegetable oils imports to 49% from 35% during the previous month.

The attractive prices over palm oil has prompted buyers to cancel palm oil cargoes and replace them with soybean and sunflower oils according to dealers and cargo surveyors. It has been reported that palm oil has been replaced by sunflower oil in many parts of the country due to the price competitiveness of sunflower oil.

During the coming months, total vegetable oil imports by India are estimated to increase by 100,000-200,000 MT with improvement in the soft oil imports. With the spreads still favouring the imports of soft oils, palm oil imports are expected to stay around 500,000 MT in the coming month of May declining the stocks below 350,000 MT. Both Malaysia and Indonesia, the two largest suppliers of palm oil to India may lower their palm oil offers to regain market share from other edible oils.

Table 3: MPO Exports to Pakistan by Type of Products (MT)

Source: MPOB

MPO exports to Pakistan during Jan-Apr 2023 went down to 138,142 MT from 170,703 MT recorded during the same corresponding period of last year. The arrival of oils and fats in the country is still under pressure due to the continued financial crisis which is leading to delayed payments and slow processing of import documents. The expected import in the month of May is anticipated to be around 250,000 MT out of which 35,000 – 40,000 MT is soybean oil and rest is palm oil.

Table 4: MPO Exports to Bangladesh by Type of Products (MT) 

Source: MPOB

MPO exports to Bangladesh increased during Jan-Apr 2023 period from 95,629 MT to 122,524 MT during the same corresponding period of last year. It was reported that April 2023 stocks were 221.0% % higher than April 2022 and 0.68% higher than the previous month. Palm oil products’ stocks were lower by 7.29% compared to March 2023 while soft oils stocks reportedly increased by 17.11%. These stocks are expected to increase in the next two months on the account of festive season with the upcoming Eid Ul Adha and the continuation of the Government subsidy. Prices of major oils such as soybean and palm oil in the local markets are still on the higher side which is also impacting the consumers’ demand and consumption.

Table 5: Breakdown of MPO Exports (MT)

Source: MPOB

In terms of breakdown, the biggest product being exported to the region during Jan-Apr 2023 period is crude palm oil (CPO) accounting for 58% of overall palm oil imports followed by RBD palm olein (RBD PL) with 25%. These two palm oil products accounted for 83% of the total MPO exports to this region. Among the major importers of Malaysian CPO are India and Pakistan and major destinations for Malaysian RBD PL are India, Pakistan and Bangladesh. Cooking oil exports have also increased from 86,408 MT to 120,650 MT with major destinations include Pakistan and Afghanistan.

Chart 1: Breakdown of MPO Exports (MT): Jan-Apr 2023

Source: MPOB