Oil, Palm PSD

Oil, Palm Malaysia

2013/2014

2014/2015

2015/2016

Market Year Begin: Oct 2013

Market Year Begin: Oct 2014

Market Year Begin: Oct 2015

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Area Planted

0

0

0

0

0

Area Harvested

4,526

4,526

4,689

4,689

4,800

Trees

0

0

0

0

0

Beginning Stocks

1,784

1,784

2,090

2,090

2,000

Production

20,161

20,161

20,500

20,000

20,500

MY Imports

319

319

275

700

500

MY Imp. from U.S.

0

0

0

0

0

MY Imp. from EU

0

0

0

0

0

Total Supply

22,264

22,264

22,865

22,790

23,000

MY Exports

17,344

17,344

18,000

18,000

17,900

MY Exp. to EU

2,000

2,000

2,000

2,000

2,000

Industrial Dom. Cons.

2,150

2,150

2,150

2,100

2,250

Food Use Dom. Cons.

640

640

650

650

650

Feed Waste Dom. Cons.

40

40

40

40

40

Total Dom. Cons.

2,830

2,830

2,840

2,790

2,940

Ending Stocks

2,090

2,090

2,025

2,000

2,160

Total Distribution

22,264

22,264

22,865

22,790

23,000

1000 HA, 1000 TREES, 1000 MT

Palm oil production during the usual seasonal peak period of October to December 2014 dropped 9 percent compared to the corresponding period in 2013/14. Floods affecting the East Coast of Malaysia affected 184,000 hectares of mature palm. In addition, the dry season during the first quarter of 2014 and the associated accumulated biological stress are expected to lower yields and lead to a drop in production to 20 million tons in 2014/15. This drop in production is expected despite a 3.6 percent increase in mature area harvested.

Palm planted area is expected to expand to 5.6 million hectares (HA) in 2015/16 with expansion mainly in East Malaysia, with mature harvested area reaching 4.8 million HA, only a slight increase above 2014/15 (matured hectare equivalent is estimated at around 2.7 million HA). Due to varying management, inconsistent inputs, and unreliable labor supply, yields are stagnant and not expected to increase significantly. As a result, despite an anticipated increase in area, output is forecast to increase only slightly in 2015/16

Mature Area Equivalent Table

2011/12

2012/13

2013/14

2014/15

2015/16

Area-MHE (1,000 ha)

2,409

2,547

2,608

2,652

2,698

Production (TMT)

18,202

19,300

20,161

20,000

20,500

Yield-MHE (Ton/ha)

7.55

7.74

7.73

7.54

7.59

Trade

Palm oil exports are expected to reach 18 million tons in 2014/15 and then drop slightly to 17.9 million tons in 2015/16. The drop is expected as the Malaysian Government intends to fully implement a B10 biodiesel mandate (a blend of 10 percent palm methyl ester with 90 percent Diesel petroleum) in 2016 after successfully completing B7 biodiesel distribution in 2015. More use of palm oil for B10 will increase domestic industrial consumption, leading to less CPO available for export. In addition, continued stiff competition from Indonesia is expected to continue to erode Malaysia's global palm oil market share.

Trade Policy

The CPO export tax is based on prices according to the table below. No export tax has been imposed since August 2014. However, the tax will resume in April as the average price of CPO has been above $750 since mid -February 2015.

CPO price (per ton in USD)*CIF Rotterdam

Export

Tax

750 – 800

4.5%

800 – 850

5.0%

850 – 900

5.5%

900 – 950

6.0%

950 – 1,000

6.5%

1,000 - 1,050

7.0%

1,050 -1,100

7.5%

1,100 - 1,150

8.0%

1,150 - 1,200

8.5%