Malaysian Palm Oil Council projects oils and fats exports to India to fall 2pc this year, says CEO

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A worker collects palm oil fruits at a plantation, amid the Covid-19 outbreak in Klang, June 15, 2020. — Reuters pic
A worker collects palm oil fruits at a plantation, amid the Covid-19 outbreak in Klang, June 15, 2020. — Reuters pic

PUTRAJAYA, Jan 13 — The Malaysian Palm Oil Council (MPOC) expects exports of oils and fats to India to decline by two per cent or 600,000 tonnes this year due to the increase in the country’s domestic production.

MPOC chief executive officer (CEO) Wan Aishah Wan Hamid said measures taken by Indian government such as the National Mission Edible Oil-Oil Palm (NMEO-OP) will definitely have an immediate impact on the market.

The Indian government launched NMEO-OP in August 2021 as part of initiatives to reduce the country’s high dependency on edible oils imports.

Key highlights of the mission are to increase the total area under oil palm plantation from 0.37 million hectare to one million hectare while the production of crude palm oil (CPO) is expected to go up by 1.12 million tonnes until 2026 and up to 2.8 million tonnes by 2030.

“India is a key player in the oils and fats industry and any policy change usually has an immediate impact on the market.

“The Indian government reviews its policies periodically and introduces changes; at times with sunset clauses, to limit the impact of certain factors like high prices, food inflation, and more,” she said.

Wan Aishah said this when delivering her presentation titled ‘Changing Dynamics of the Indian Edible Oil Policy and its Impact on the Palm Oil Demand’ at the Palm Oil Economic Review and Outlook Seminar (R&O) 2022 organised by the Malaysian Palm Oil Board (MPOB) today.

She said Malaysian palm oil exports to India have hit a high of 4.4 million tonnes in 2019 to a low of 2.7 million tonnes in 2020, mainly in reaction to the change in import policy.

Malaysian palm oil exports to India in 2021 amounted to 3.6 million tonnes, thus retaining its position as the number one buyer of Malaysian palm oil.

On December 20, 2021, Indian government announced the extension of ‘Free Import’ of palm olein till December 31, 2022 and reduction in the import duty of refined, bleached and deodorised (RBD) palm olein by five per cent until March 31, 2022.

“These measures will affect the buying pattern of the Indian edible oil industry and will also have an impact on the overall dynamics of palm oil imports in India,” she said.

Meanwhile, on the way forward for Malaysian Biodiesel agenda, the Malaysian Biodiesel Association (MBA) president U.R. Unnithan in its paperwork titled ‘EU-RED II: The Future Prospect of the Malaysian Biodiesel Industry’ said maximising domestic use for transport B20/B30 and Industry B10/B20 needs to be accelerated to support first generation biodiesel industry.

“We have to accept that Palm Oil use for Biofuel in the European Union is going to steadily decline.

“A policy framework on production, domestic utilisation and export of palm waste oils is very much necessary and should be put in place quickly,” he said.

In addition, Unnithan said carbon tax mechanism needs to be clearly articulated and use of biofuels should be justified using this metric.

“HVO (hydrotreated vegetable oil) as a new frontier should be explored. Participation of first generation players in it should be facilitated.

“First generation biodiesel players should be incentivised through government grants to retrofit their plants to use waste oils,” he added. — Bernama