Table of Contents
This report profiles Malaysia's palm oil industry, discussing market trends through 2014 and outlook for 2015 and beyond. The report also highlights leading players in the sector including Sime Darby Berhad, IOI Corporation Berhad and Kuala Lumpur Kepong Berhad.
Following rapid growth in the past few years, the Malaysian palm oil industry went through unprecedented times in 2012 and recovering in 2013. In 2014, the industry climate improved with the average CPO price increasing by 0.5% to MYR2,383.50 per tonne from MYR 2,371 per tonne. Export revenue of palm products rose 3.7% to MYR 63.62bn.
CPO production in 2014 improved to 19.67mn tonnes, up 2.3% from 19.22mn tonnes in 2013. The improvement was attributed to higher national oil extraction rate (OER) and increase in production from new matured areas especially in Sarawak. Palm oil stocks in 2014 increased 1.3% to 2.01mn tonnes from 1.99mn tonnes in the previous year. Higher CPO productions as well as a decline in palm oil exports had contributed to a higher closing stock for the year.
Malaysia's CPO export duty was suspended from September 2014 to March 2015, followed by an introduction of 4.5% duty in April 2015 and thereafter in May 2015, reverted to zero duties. The government has stated in the Budget 2015 that the allocation for development and promotion of palm oil was reduced by 40% to a total of MYR 24.5mn. Globally, the weather forecast models are predicting a moderate El Nino for 2015. Additionally, CPO production is expected to increase in 2015, however inventory is expected to accumulate towards the last quarter of 2015.
o Oil palm planted area increased 3.1% year-on-year, from 5.23mn hectares in 2013 to 5.39mn hectares in 2014.
o Production of crude palm kernel oil (CPKO) rose 0.3% to 2.28mn tonnes in 2014.
o The average FFB yield dipped 2.1% to 18.63 tonnes per hectare in 2014. Sabah accounted for the highest FFB yield at 21.34 tonnes per hectare, while Kelantan registered the lowest at 11.85 tonnes per hectare.
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