Palm oil demand to rise in 2023 to 20 million tonnes

KUALA LUMPUR: Demand for Malaysia’s palm oil is forecast to notch higher to 19.85 million tonnes this year from 19.01 million tonnes in 2022 as exports are set to grow to 16.44 million tonnes from 15.73 million tonnes previously.

The remaining demand is expected to come from domestic (2.98 million tonnes) and usage for biodiesel production (440,000 tonnes), said Indian Vegetable Oil Producers’ Association president Sudhakar Desai.

Stronger export demand mostly from India, and a shift in palm oil demand from Indonesia to Malaysia due to the country’s export restrictions will help raise demand and clear some stocks from Malaysia.

Malaysia’s end-2023 stock is likely to be at 4.33 million tonnes, higher than last year’s 4.22 million tonnes, while overall production is expected to grow moderately by 2.6% to 18.95 million tonnes this year.

‘’It’s not a big growth. Production has been stagnant for Malaysia,’’ he said during UOB Kay Hian’s palm oil webinar yesterday.

Combined Malaysia-Indonesia production is expected to reach 68.72 million tonnes in 2023, with exports at 44.63 million tonnes.

Indonesia will supply 57.09 million tonnes of palm oil to the total production figures.

Sudhakar said India, the second-largest palm oil consumer, is projected to import 14.37 million tonnes of vegetable oils in 2022 and 2023, of which 9.3 million tonnes are palm oil, 3.01 million tonnes are soybean oil, and 2.01 million tonnes are sunflower oil.

‘’Like other countries, India has a need to pick up stocks when there is a steep drop in prices.

“To me, it definitely looks like demand for vegetable oils has returned,’’ he said.

“He added that palm oil prices have dropped from their April 2022 peak to hover at the current level of over RM4,200 per tonne.

He added that soybean oil price has dipped 37% and sunflower oil price has shrunk by 43%.

On a global scale, palm oil production is likely to reach 79.22 million in 2022 and 2023, a 10% uptrend from 2021 and /2022.

In contrast, global demand for soybean is lower by 0.3 per cent to 60.19 million tonnes. — Bernama