PLANTATION Industries and Commodities (MPIC) Minister Datuk Zuraida Kamaruddin has expressed her confidence that China will increase its palm oil imports despite the current global challenges.
This comes after the recent statement by China Foreign Affairs Minister and state councillor Wang Yi that the world’s second-largest economy is ready to import more palm oil, tropical fruits and other agricultural products from Malaysia during his visit here.
“This is surely a good piece of news given the uncertainties shrouding the international palm oil trade as evident by plummeting crude palm oil prices to RM4,000 per metric tonne level after a spike to above RM8,000 per metric tonne in March 2022,” said Zuraida.
In 2021, China accounted for 11% of total global palm oil imports and 12% of Malaysian palm oil exports. China imported 6.38 million metric tonnes of palm oil last year, of which Malaysia’s portion made up 1.67 million metric tonnes from that total.
For the five-month January to May 2022 period, the high vegetable oil prices have deterred buyers and traders in China from actively importing both palm oil and other edible oils, prompting palm oil imports to drop 58.3% year-on-year (y-o-y) or 1.52 million metric tonnes to only 960,000 metric tonnes.
Between January–June 2022, Malaysian palm oil exports to China stood at 565,842 metric tonnes, which is 175,640 metric tonnes or 31% lower compared to the same period of last year.
“Set against current global economic challenges such as the high-interest rate environment, inflationary pressure, and recessionary concerns, China is expected to import an estimated volume of 4.8 million metric tonnes of palm oil globally in 2022 based on the assumption that the June–December 2022 import quantity is at par with the same period in 2021,” Zuraida remarked.
“However, it is unlikely for China’s total palm oil imports in 2022 to come close to the volume recorded in the prior year.”
A few factors that influence the prices of palm oil like the demands from downstream sectors, the soybean situation in China, Indonesia’s policies to curb domestic palm oil price hikes, and tightness in the supply of global edible oils will continue to affect the prospects of China’s palm oil imports from Malaysia, she added.
China – which does not produce palm oil on its own – is currently the world’s second largest market for the commodity after India.
China also supports and accepts the Malaysian Sustainable Palm Oil (MSPO) certification, which has enabled the palm oil industry (in China) to enhance its corporate image while fulfilling its corporate social responsibilities and realising China’s National Green Policy.
“The MSPO helps portray the positive image of China’s manufacturers in support of Malaysia’s efforts to improve the living standards of oil palm smallholders, as well as complement the goals of China’s Belt and Road Initiative (BRI) towards socioeconomic development of both countries,” Zuraida noted.
“Like I have explained during my numerous trade missions abroad, palm oil is used in numerous sectors and is fast gaining popularity around the world. Palm oil is more than just for cooking.
“It is also an ingredient for many other products, and in fact, palm oil has more health benefits than other edible oils.”
In China, about 75% of its imported palm oil is consumed in the food sector, including catering, instant noodles, food processing, and bakery & confectionery sectors, among others.
Palm products other than palm oil enjoy a good share in non-food sectors, notably within the oleo-chemicals industry.
“MPIC will continue with its various campaigns and programmes to promote the use of palm oil around the world and play a key role in the global movement to champion the goodness of palm oil,” Zuraida said. – July 19, 2022
