THE Ministry of Plantation Industries and Commodities (MPIC) will take advantage of the political tension in Europe and the shortage of global edible oil to promote Malaysian palm oil, said its minister Datuk Zuraida Kamaruddin.
This will pave the way for the commodity to regain its market share especially in the European Union.
This is following Russia’s invasion of Ukraine on Feb 24 this year, which had significantly affected the global vegetable oil supplies as the uncertainty over Black Sea exports have resulted in higher vegetable/edible oil prices.
“This could further tighten the global oilseed and vegetable oil supplies, thus prolonging the upcycle in vegetable oil prices,” she said in a statement today (May 6).
According to Zuraida, the Eastern European tension has led to shortages of sunflower oil and rapeseed oil with both countries account for 80% of global exports.
“MPIC believes that the Black Sea tension will benefit Malaysian palm oil exports as many European countries with high dependency on sunflower oil, have now shifted their demand to palm oil,” she noted.
“In fact, Ukraine and Russia are entering the critical month for sunflower planting which should start in April hence the prolonged war could hamper the coming planting season.”
Ukraine’s and Russia’s sunflower oil exports account for 10% of global vegetable oil exports.
Market analysts are presently anticipating an increase in palm oil demand from EU region in the near-term, given lower quantity of soybean exports from Brazil, Paraguay, Russia and Ukraine as well as reduced sunflowers from Russia, Kazakhstan and Ukraine.
“Coupled with the latest move by neighbouring Indonesia who is the world’s largest palm oil exporter to widen the scope of its export ban on raw materials for cooking oil to include crude and refined palm oil, global vegetable oil prices are likely to remain high in 1H2022,” Zuraida said.
“This is why I believe now is a timely opportunity for palm oil to regain its confidence from European buyers, given the publicity that the commodity has received in the past.”
In this regard, Zuraida said that she has instructed relevant agencies under MPIC, such as the Malaysian Palm Oil Council (MPOC) and the Malaysian Palm Oil Board (MPOB), to undertake aggressive efforts and campaigns not just for the country’s commodity to fill global market gaps in the interim.
“These agencies, in collaboration with MPIC, will have to ensure that Malaysian palm oil remain a top choice in global markets in the long run, particularly those where the consumers have been exposed to vicious propaganda in the past,” she justified.
“Under my leadership, MPIC will not want to waste a good crisis. It is time we step up efforts to counter adverse propaganda to undermine palm oil’s credibility and for us to showcase the numerous health benefits the golden oil has to offer.” – May 6, 2022
