Minister of Plantation Industries and Commodities Datuk Zuraida Kamaruddin says her Ministry will take advantage of the political tension in Europe and the shortage of global edible oil to promote Malaysian palm oil, in efforts to regain market share, especially in the European Union (EU).
EU has been a hard critic of Malaysian palm oil and with the Russian invasion of Ukraine, the need for vegetable oil has skyrocketed due to the disruption of exports in the region.
According to Zuraida, the escalating tension could further tighten the global oilseed and vegoil supplies, thus prolonging the upcycle in vegoil prices. The Eastern European tension has led to shortages of sunflower oil and rapeseed oil with both countries accounting 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. 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 vegoil exports. Market analysts are presently anticipating an increase in palm oil demand from the EU region in the near term given the lower quantity of soybean exports from Brazil, Paraguay, Russia, and Ukraine as well as reduced sunflower from Russia, Kazakhstan, and Ukraine.
Malaysia’s palm oil industry can also benefit from the latest move by neighbouring Indonesia the world’s largest palm oil exporter, which has decided 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 1H 2022. This Zuraida believes now is a timely opportunity for palm oil to regain its confidence from European buyers given the publicity the commodity received in the past.
In this respect, The Minister 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 our commodity but to fill the global market gaps in the interim. These agencies, in collaboration with MPIC, will have to ensure that Malaysian palm oil remains a top choice in global markets, in the long run, particularly those where the consumers have been exposed to vicious propaganda in the past.
Turning crisis into opportunity, Zuraida wants her Ministry to step up efforts to counter adverse propaganda targeted to undermine palm oil’s credibility and showcase the numerous health benefits the golden oil has to offer.