Malaysia expects significant uplift in its overseas palm oil sale by volume this year as part of a wider drive to expand commodities export revenue growth up to fourfold, the government said this week.
The government wants revenues from overseas sales of cash crops including palm oil to hit growth of up to 8% YoY. Revenues increased just 2% YoY between January and October 2016 to 99.2bn Ringgitt ($22bn), as falling output drove prices higher while denting volumetric sales. Malaysian export sales slumped 8% YoY between January and November last year.
Malaysia is targeting new markets in West Asia and Southern Europe this year, as well as expanded sales opportunities into Iran through free trade negotiations. European biodiesel offers one promising outlet for Malaysian palm oil sellers as mandates expand against a tight domestic feedstock backdrop which is already propelling 2017 biodiesel prices higher.
Southern Europe boasts a large and expanding fleet of largely palm-fed biodiesel and renewable diesel plants. French refiner Total is set to add several hundred thousand tonnes per year of palm demand when it starts its La Mede biorefinery later in 2017.
Total revenue from Malaysian commodity exports rose by 2% YoY between January and October 2016 to RM99.2bn, the ministry said. Third month palm oil futures prices last year averaged $693/t, a gain of $118/t or 20.5% over the $575/t price average seen through 2015.
Palm oil is Malaysia’s fourth largest export by dollar value, bringing in around twice the revenue of overseas rubber sales and three times the revenue enjoyed through timber exports. The IMF expects Malaysia to expand its total exports of goods by just over 3% this year.
MS – 05/01/2017