India could soon return to Malaysia for palm oil

KUALA LUMPUR: India is seen as having very little choice and could soon turn to Malaysia and start importing back, especially if the Covid-19 pandemic situation in Indonesia gets worse and the country goes into full lockdown as most of the countries are doing at the very moment. 

“The country (India) could step up purchases in the coming months as shipments are reportedly easing up,” the Malaysian Palm Oil Council (MPOC) said in its second quarter outlook for palm oil in the South Asian countries. 

However, the current lockdown conditions will be the determining factor as to whether the required import volumes can be achieved or continue to add to the current woes, it said.

In India, total imports of oils and fats are projected at 1.0 to 1.2 million metric tonnes (MT) on a monthly basis, in which palm oil’s share will be at 50 per cent, it said.

MPOC said the Saurashtra Oil Mills Association (Soma), the largest organisation of groundnut oil millers, has also urged the Indian government to remove the restrictions on refined palm oil import to meet the huge shortfall in the domestic edible oil market owing to the lockdown.

“It added that the country could expect a spike in the domestic prices of edible oils in the coming month if there is no relaxation in the palm oil imports into the country,” it said.

Malaysia is currently going through a partial lockdown but the palm oil industry can continue to operate due to the importance of palm oil to the country’s economy. The plantation sector has been allowed to resume their operations alongside the refineries and cooking oil producers. 

Nevertheless, the outlook said Malaysia cannot expect to achieve the same market share in the palm oil import basket under the current situation as compared with a 45 per cent market share last year.

A reasonable expectation for Malaysian Palm Oil’s (MPO) share would be about 25 per cent, which is closer to the share as in 2018, it indicated.


As for Pakistan, it is anticipated that oils and fats imports will maintain their current momentum and exceed the total volume of 1.6 million MT by the end of June 2020.

Pakistan is a net importer of oils and fats with 90 per cent of the total requirement met by imports. This is the main reason that Pakistan’s imports are maintaining their existing volumes, despite the ongoing pandemic and restrictions.

At the end of the first quarter of 2020, total imports of edible oil in Pakistan registered a decline of only 1.2 per cent when compared with the same period of last year. During the same period, the local stocks in Pakistan registered a decline of 9.5 per cent, which compensated for the lower arrivals.

The arrivals of edible oil are also likely to strengthen in the months of May and June to capitalise on the two per cent duty relief which the government of Pakistan has announced on the import of edible oil for a period of three months, ending on June 30, 2020.

“It is also pertinent to note that palm oil and its major fractions contribute more than 95 per cent of the total imports of oils and fats in Pakistan,” said MPOC.

MPO’s market share is currently at 27 per cent and it is likely that Malaysia will continue to maintain this level of share and reach the total export volume of 450,000 MT by the end of June 2020.

This is based on the assumption that the current disruption in Sabah plantations will not affect the overall supply situation from Malaysia. 


The council said preliminary data from the local source shows that imports of palm oil on April 1-20, 2020 have declined to 88,271 MT from 130,746 MT during the same period a year ago.

Imports of crude degummed soybean oil however have increased to 92,300 MT during 1-20 April, 2020, as opposed to 76,350 MT during the same period last year, owing to the competitive prices.

Imports of rapeseed/canola registered 19,748 MT in the first 20 days of April 2020 as compared with zero imports recorded during the same time span last year, it said.

It is expected that palm oil consumption will continue to be affected in anticipation that the impact of the Covid-19 pandemic could prolong until the end of the second half of 2020.

“Hence, we could see a further reduction in the import of palm oil in the second quarter of 2020. A higher quantum of decline can be expected since palm oil has a larger share in the Bangladeshi edible oils market.”

Based on MPOC Dhaka market intelligence data, consumption of palm oil during the Ramadan 2020 period is expected to go down by 62 per cent to approximately 97,000 MT, a steep decline from 255,000 MT that was recorded during the month of Ramadan in 2019, said MPOC.

This includes reductions in the household consumption, shortening/Vanaspati industries, food processing industries, hotels and restaurants including fast food chains as well as street vendors. 

Key Export Destinations 

The South Asian countries are important export destinations for Malaysian palm oil. At the end of 2019, MPO exports to this region registered an unprecedented record of 5.75 million MT, an increase of 36.3 per cent from what had been achieved in 2018.

The feat was largely attributed to the significant increase in MPO exports to India which were recorded at 4.41 million MT due to an import duty advantage, accounting for almost 77 per cent of the total MPO exports into this region. 

The scenario has since changed for the first quarter of 2020 (Q1 2020). Data by the Malaysian Palm Oil Board (MPOB) shows that for the period of January-March 2020, MPO exports to this region have gone down by 957,994 MT or 66.9 per cent as compared with the same period a year ago. 

The staggering drop in MPO exports to India has contributed to the overall decline in the total exports into this region.

Following a trade spat between India and Malaysia in 2019, a restriction has been imposed on the importation of refined palm oil into India.

The restriction has greatly caused a major blow to exports of palm oil from Malaysia to this country.

Due to the fact that the Indonesian suppliers have been fulfilling the added demand coming from India since the beginning of 2020, MPO has been gaining share in markets like Pakistan and Bangladesh.

Palm oil imports from Malaysia have increased due to the fact that Malaysian suppliers are able to offer competitive prices to the local buyers. – Bernama

New Sarawak Tribune e-Paper

Related Post

Nusantara to bring huge tourism potential to Indonesia, Malaysia
2 days ago
Carbon credit to be Vietnam’s revenue
3 days ago
Malaysia’s external trade to expand
3 days ago
Bursa Malaysia’s net profit expected to grow
3 days ago
Economist raises concerns over high dependence on SST
3 days ago
Singapore keen on submarine cable project collab
2 weeks ago
AmBank spreads joy in heart-warming CNY short film
2 weeks ago
Farm Fresh Berhad bags another platinum at Putra Brand Awards
3 weeks ago

Promoted Content

Latest News

Woman claims losing RM53,875 to online job scam
4 mins ago
Govt approves subsidies worth RM2.5 mil for kindy education
17 mins ago
APM to the rescue of sick man
27 mins ago
House owner shocked to find cobra in car porch
36 mins ago
MADANI Malaysia should benefit Sarawakians too: Nancy
53 mins ago


Subscribe and get the latest news from

New Sarawak Tribune is a Sarawakian news portal that highlights Sarawak-centric news and other stories of relevance to Sarawak.

Today, New Sarawak Tribune focuses on happenings in Sarawak’s cities, towns and small places no matter how remote these are and events of relevance in other states of Malaysia and other countries.