Palm oil industry adapts to new norm, business model despite Covid-19 — MPOB DG - MIDA | Malaysian Investment Development Authority
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Palm oil industry adapts to new norm, business model despite Covid-19 — MPOB DG

Palm oil industry adapts to new norm, business model despite Covid-19 — MPOB DG

24 Nov 2020

The palm oil industry seems to have quickly adapted to the new norm and new business model driven by the Covid-19 scenario after experiencing a slowdown in exports and prices in the first quarter of 2020 due to the pandemic.

Malaysian Palm Oil Board (MPOB) director-general (DG) Dr Ahmad Parveez Ghulam Kadir said the easing of the Covid-19-induced lockdowns in most countries and the resumption of economic activities would translate into more demand for palm oil.

“Hence, this would give more opportunities for palm oil to recover from the impact of the pandemic,” he said in a keynote address titled, “Overview of the Malaysian Palm Oil Industry during the Pandemic and the Route to Recovery” at World Palm Oil Virtual Expo, today.

Updating on the current situation of the palm oil sector for this year, he said the plantation sector seems to adapt to the new norm of working conditions, despite the border closure which affects foreign labour from entering into the country.

Additionally, crude palm oil (CPO) production from April to October 2020 has increased by 3.5 percent to 12.45 million tonnes year-on-year (y-o-y), showing that the Movement Control Order (MCO) implementation arising from the Covid-19 pandemic has not had a significant impact on CPO production, he said.

The stock situation in 2020 for the period of January to October is better compared to the previous year with the average monthly stocks at 1.79 million tonnes.

“After the implementation of MCO, the stock is slightly higher but reduced to 1.70 million tonnes (lower in July 2020) due to the CPO export duty exemption given under the National Economic Recovery Plan (Penjana) initiative,” Dr Ahmad Parveez said.

Meanwhile, palm oil export during January to May 2020 was partly affected by weaker global demand due to lockdowns imposed in most importing countries, and lower production.

Hence, Malaysian palm oil export was down by 23.9 percent to 6.09 million tonnes y-o-y.

He said from June onwards, palm oil export recovered due to the resumption of economic activities in most countries, coupled with the CPO export duty exemption.

Palm oil export during the June to October 2020 period was higher by 37.3 percent to 8.35 million tonnes from 6.09 million tonnes during January to May 2020, he said.

Dr Ahmad Parveez added that as the caretakers of the Malaysian palm oil industry, the Primary Industries and Commodities Ministry, MPOB, and other related agencies and councils will continue to work hand-in-hand with the palm oil industry players to strengthen the fundamentals of the industry in facing the ongoing challenges for the sustenance of the palm oil industry.

Source: Bernama Posted on : 24 November 2020