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Malaysian palm oil output expected to improve in 2021/22 and beyond

June 8, 2021

1 mins read

The Malaysian Palm Oil Board (MPOB) anticipates palm oil output improving y-o-y in 2021/22 on the back of more favourable weather and better expected yields. Malaysian palm oil extraction rates and exports are likely to push higher, led by strong expected consumption from India. India, the world’s largest palm oil importer, is currently suffering from a resurgence in COVID-19 cases which has temporarily dampened demand for the vegetable oil. This situation is expected to improve from July onwards, in line with vaccine progress and current implementation of mobility restrictions, at which point we should see demand pick up again. Turkish demand is also expected to grow significantly in 2021/22, as the country switches away from expensive and short-supplied sunflower oil.

While no official estimates for the 2021 calendar year (MY) have been provided yet, the Director General of the MPOB expects output to increase significantly over the coming years. Malaysian palm oil production is expected to rise to 22 million tonnes by 2025 and 25 million tonnes by 2030, driven by increased production area, higher productivity and expected improvements in yields.

The Director General also sees Malaysian palm oil staying more competitive than its Indonesian counterpart, despite speculation in the market of a $100/MT cut on Indonesian palm oil export levies. If these speculations are confirmed, the total tax and levy on Indonesian exports would still be $159/MT compared to just $89/MT in Malaysia.

Topics: Oils & Oilseeds
Archit Singh
Archit Singh

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