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Demand For Malaysian Palm Oil Set To Rebound

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KUALA LUMPUR – Although China’s soyabean oil and rapeseed oil consumption has
dragged down palm oil imports from Malaysia for the past few months, it will
not last long as demand for the edible oil is set to rebound.

Malaysian Palm Oil Council’s (MPOC) Chief Executive Officer, Dr Kalyana
Sundram, said he is upbeat of a surge in China’s palm oil imports, especially
from the coastal and Inner regions, backed by promotional activities and
outreach activities in the country.

“Much of the palm oil are now not reaching the coastal and the Inner regions
which still have a large population because of the logistics problems,” he told
Bernama.

Kalyana said to facilitate this, MPOC plans to undertake more promotional
activities in China.

“We are trying to put together promotional avenue in order for palm oil to
reach out to the Inner regions,” he said.

In addition to this, Kalyana said, MPOC is working with the local Chinese
wood manufacturers, entrepreneurs and non-food industry to do this.

“It is going to be a year-long task. Maybe, it will take several years but
these are some of the promotional activities we need to do in order to increase
Malaysian uptake palm oil in China.

“We would be happy with between 5.5 and six million tonnes of palm oil going
to China. It would be a strong possibility if we do all the promotional work
then that could be achieve,” he said.

Kalyana said that with greater bilateral trade with China and its projects
in Malaysia, there could be spin-offs where palm oil is better recognised even
by Chinese government agencies that buy oils and fats.

“They (Chinese government agencies) may be more amenable to using palm oil
in their products. So it is a long-term attempts and we have to do continuous
work,” he said.

He said China used soyabean crushing for animal feed and this is one of the
reasons for the significant increase in soyabean oil consumption.

The rapeseed oil stockpile has also been progressively released, from a few
million tonnes to less than 750,000 tonnes now, he said.

“As China taps into ample global supplies of the rival soyabean to feed its
expanding livestock sector and state sales of rapeseed oil reserves, these have
impacted the overall domestic consumption of all oils and fats and indirectly it
has impacted overall palm oil imports in China,” he.

He said China’s palm oil imports plunged 24 per cent to 4.48 million metric
tonnes in 2016, the lowest since 2005, as benchmark futures rose 25 per cent
after El Nino squeezed supplies in Indonesia and Malaysia.

“A weaker yuan and state sales of rapeseed oil reserves also reduced the
attractiveness of palm oil for local buyers,” he said.
— BERNAMA

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