KUALA LUMPUR: The easing of the Covid-19 lockdowns in most countries and resumption of economic activities will translate into more demand for palm oil, said Malaysian Palm Oil Board (MPOB) director-general Dr. Ahmad Parveez Ghulam Kadir.
Hence, this will give more opportunities for palm oil to recover from the impact of the pandemic.
"The Malaysian palm oil industry seems to quickly adapted with the new norm and new business model driven by the Covid-19 after experiencing a slowdown in exports and prices in the first quarter of 2020 due to the pandemic," he said in his keynote address on "Overview of the Malaysian Palm Oil Industry during the Pandemic and the Route to Recovery" at the World Palm Oil Virtual Expo and Conference today.
According to Dr. Ahmad Parveez, exports of palm oil from June to October 2020 was 37.3 per cent higher to 8.35 million tonnes from 6.09 million tonnes during January to May this year.
This was due to the resumption of economic activities in most countries, coupled with crude palm oil export duty exemption.
From January to May 2020, exports of palm oil fell 23.9 per cent or 1.91 million tonnes to 6.09 million tonnes year-on-year, partly affected by weaker global demand due to lockdown imposed in most importing countries and lower production.
For the first 10 months of this year, export of palm oil slipped by eight percent or 1.23 million tonnes to 14.44 million tonnes from 15.67 million tonnes in the same period of 2019.
Ahmad Parveez said export of palm oil to the country's main importer China, in the first quarter of 2020 had fallen by 15.7 per cent (89,601 tonnes) to 481,652 tonnes from 571,253 tonnes in the same period of 2019 due to the provincial lockdown.
However, in the second and third quarters of 2020, China's export of palm oil recovered by 61.3 per cent to 776,829 tonnes and 7.3 per cent to 833,558 tonnes, respectively, as lockdown eased up in early April 2020.
Export of palm oil to India, another main importer of Malaysia's palm oil, surged in June and July 2020 to compensate the low import during lockdown and to replenish domestic stocks as India resumes its economic activities.
On the other hand, export of palm oil to European Union for March 2020 (194,260 tonnes) and April 2020 (207,640 tonnes) were the highest recorded during January-October 2020.
He said prices of crude palm oil had declined to the lowest level at RM2,074 per tonne in May due to the lower global demand of palm oil.
However, prices regained its upward momentum thereafter due to the recovery of export demand, lower palm oil stocks and marginal palm oil production growth.
For the first 10 months of this year, the average price of crude palm oil gained 28.6 per cent or RM575 to RM2,583.50 per tonne from RM2,008.50 per tonne in the same period of 2019.