KUALA LUMPUR: Malaysia's exports of palm oil stood at RM52.3 billion in 2020, contributing 73.0 per cent of the country's agriculture exports, according to the Department of Statistics Malaysia (DOSM).
DOSM, in its latest Malaysia Trade Statistics Review (MTSR 2021), noted that exports of sawlog, sawn timber and moldings, and natural rubber stood at RM3.6 billion (5.1 per cent of total exports) and RM3.3 billion (4.6 per cent) respectively.
Exports of palm oil increased on average 8.1 per cent annually for the period between 1990 and 2020, while sawlog, sawn timber and moldings decreased 2.5 per cent per annum.
The report highlighted that Malaysia's trade for agriculture sector was ranked second in 2020 with a share of 6.8 per cent, surpassing mining products.
Chief Statistician Malaysia Datuk Seri Dr. Mohd Uzir Mahidin said MTSR 2021 synthesised Malaysia's trade performance for agriculture sector, particularly on selected agricultural products namely palm oil, natural rubber, seafood, rice and the agriculture sector as a whole, coupled with other indicators related to agriculture sector such as investment, employment and production.
"Over the past decades, the economy of Malaysia experienced transformation from agriculture and commodity-base to a diversified economy.
"Agriculture was once the mainstay of the Malaysia economy on the back of rubber commodity, but in the 1980s, manufacturing was emerging as a leading sector to achieve the aims of the New Economic Policy, which than followed by the rise of service-based economy in the 1990s in line with national development plan," he said in a statement today.
He said the contribution of agricultural products to Malaysia's total trade in 1990 was 13.7 per cent, declining to 6.8 per cent in 2020.
Nevertheless, he said Malaysia's main agriculture export products in 2020 were palm oil, sawlog, sawn timber and mouldings, and natural rubber.
"Malaysia's top imports were cereals, natural rubber and palm oil. Malaysia's main agricultural export destinations were China, the European Union, and India, while agricultural products were mostly imported from Indonesia, China and Thailand."
He said palm oil dominated Malaysia's trade for agriculture sector since 1990, and in 2020 the country contributed 25.8 per cent and 34.3 per cent, respectively to world palm oil production and exports.
He added that the main destinations for Malaysia's palm oil were India, China and the European Union.
Malaysia used to be the world's top natural rubber producer in the 1930s. However in 2020, Malaysia's natural rubber exports were only RM3.3 billion, or 0.3 per cent of total exports.
He said Malaysia had benefited from the Covid-19 pandemic as it appeared to be the world's leading producer of rubber gloves in 2020 with exports amounting to RM35.9 billion, increasing 104.5 per cent year-on-year and consequently contributing to the increase in natural rubber imports.
"Malaysia was once used to be a net exporter of seafood. However, it turned around to become a net importer with an import value of RM3.4 billion in 2020. Malaysia imported seafood, especially frozen fish, fresh or chilled fish and fish fillet."
Malaysia imported between 30 per cent and 40 per cent of the country's rice needs, sourcing mainly from Vietnam, India and Pakistan with a total of RM2.5 billion of rice in 2020.
Although the relative contribution of agriculture sector to the Malaysian economy and trade is in declining trend from year to year, this sector remains significant, especially as a major supplier of food as well as raw materials for resource-based industries.
"Efforts in the field of research need to be increased to develop sustainable technology to improve the production and quality of agro-based products, thereby meeting the needs of the people and world market demand," he added.
The report also highlighted that Malaysia should diversify the exports of palm oil to many more countries and not solely depends on few countries like China and India.
"Since the share of palm oil exports to total exports showed a declining trend after the peak in 2011, many efforts have to be put in to boost the exports."
One of the strategy to increase the exports was to drive up the demand of palm oil as the important raw material for transport biofuel in the world and also help to reduce greenhouse gas emissions of transport sector.
"Although Malaysia is the second largest exporter of palm oil in the world, Malaysia do imports palm oil. Malaysia imports of palm oil has remained insignificant throughout 1990 till 2020," DOSM said.
It added that the shortage of labour workforce was one of the problem which might affect the supply of palm oil in domestic and world markets.
"Malaysia imports palm oil to provide the substitutes due to the decreasing stocks. Also, it is to accommodate domestic and world demands," DOSM said.