Report Highlights:

Soybeans are the leading U.S. oilseed product export to Malaysia, with U.S. soybean sales expected to be around 300,000 tons in 2012/13. Argentina will continue to supply the majority of soybean meal. Meal demand from the broiler sector is growing slowly, which will lead to marginal increase in meal use and imports through 2013/14. 

Faced with high stocks and downward pressure on CPO prices, the Government of Malaysia is encouraging replanting to go along with the recently implemented new export tax regime. As a result of more replanting, and other production challenges, palm oil output is forecast to remain at 19 million tons through 2013/14. Exports are projected to grow marginally in line with demand growth in certain key markets. 

Executive Summary: 

Soybeans remain the top U.S. oilseed product export to Malaysia, with sales averaging around 300,000 tons annually. With a slight expansion expected from the swine and broiler sectors, soybean imports are forecast to grow, albeit slowly. The food service industry consumes close to 100,000 tons of soybeans annually, mostly from Canada. In line with continued economic growth, robust demand for soy based drinks and poultry meat will continue to be the driving forces for soybeans and meal imports. Accordingly, meal imports are forecast to grow through 2013/14. Argentina is the dominant meal supplier. 

Crude palm oil (CPO) output is forecast to remain at 19 million tons through 2013/14. Continued pressure on CPO prices, combined with government initiatives, will encourage both smallholders and larger plantation companies to accelerate replanting, limiting near term production expansion. The reduction in matured area equivalent from the replanting will be partial compensated for by new mature area in Sarawak. 

Palm oil exports are forecast to increase to 17.55 million tons in 2012/13 and PKO at 1 million tons. Continued demand growth in key markets is expected to lead to a marginal increase in exports in 2013/14. China, India and Pakistan continue to be leading markets, while shipments to the United States remain near 1 million tons. 


There is no commercial cultivation of soybeans in Malaysia. 

1. Soybean 


Soybean imports are projected to increase modestly through 2013/14 in tandem with expectations for robust economic growth and consumer demand, which will drive demand for soy protein, both from the swine and broiler industries, and from food soybean market for soymilk beverages. 

While exports dipped somewhat in 2011/12, the US is still the top supplier, and quantity is forecast to rebound in 2013/14. Canada is the second leading supplier, followed by Argentina. 


Soybean crushing activity is forecast to remain relatively flat, as feed compounders take advantage of plentiful meal supplies from South America. As stated above, demand for soy based beverages is showing solid growth. Canada is the leading supplier of soybeans for human food consumption. 

Trade Policy & Market Access 

A biotech labeling requirement is scheduled to be enforced in July 2014. While implementing details of the food labeling guidelines have not been made public, a list of processed products exempt from the labeling requirement and a threshold allowing for adventitious presence may be included in the final language of the regulations. The labeling requirement would not apply to meat reared on feed containing GMOs.

2. Copra

Copra production is forecast to continue declining. Palm plantation expansion reduced coconut planted area from 119 thousand hectares in 2007 to 92 thousand hectares in 2012, resulting in copra product declining from 21,538 tons in 2007 to 10,923 tons in 2011. Most copra is consumed as food (desiccated coconut, coconut cream, etc), leaving a small amount for the crushing sector. The outlook for copra output is on a slow downtrend in the near term. 


1. Soybean Meal 

Production and Imports 

In line with expectations for moderate growth in the poultry sector, meal imports are forecast to grow through 2013/14. 


With a continued robust economy, demand for poultry meat in Malaysia remains firm. As consumers’ demand for both pork and broiler meat grows, soybean meal consumption is forecast to increase marginally in 2013/14. Most major broiler and layer farmers in the sector plan to slightly expand production in 2013/2014. For 2013/14, no growth in the 1.9 million standing hog population is anticipated 

2. Palm Kernel Meal 

In line with the increase in palm kernel crush, palm kernel meal (PKM) production is expected to increase to 2.5 million tons in 2012/13. With a very small domestic beef and dairy sector, only minimal quantities are consumed locally, and almost all is exported.


1. Palm Oil 

For 2012/13, area harvested of matured palm plantation is expected to be marginally reduced as government replanting programs for smallholders started on January 2013. The government has a goal of replanting 100,000 hectares owned by smallholders; in addition, another 100,000 hectares is expected to be replanted by private commercial plantations. The majority of the replanting will occur in Peninsular Malaysia, where most of the 20 year old and above plantations are found. Any reduction in output as a result of the replanting will be offset by growth in E. Malaysia; so the over production forecast is unchanged at 19 million tons. 

Fruit-bearing area is expected to expand to 4.8 million hectares in 2013/14, while fully matured hectare equivalent (MHE) is estimated to reach 2.5 million hectares. Nonetheless, with stagnant yields expected to continue, CPO production for 2013/14 is forecast to remain at 19 million tons. 

Faced with record-level stocks and sagging prices, GOM is attempting to implement a B10 Biodiesel mandate by mid-2014. However, the pace of the B5 implementation is lagging, so achieving the B10 goal is questionable. So far $25 million has been spent on infrastructure and blending facilities for biodiesel program. However, some automotive manufactures oppose the use of biodiesel blending beyond B5, which may deter full implementation. Nonetheless, if the B10 mandate is fully implemented by mid-2014, an additional offtake of 1 million tons may result. 

With continued increase in demand from certain key markets, exports are forecast to reach nearly 17.7 million tons in 2013/14. 

Trade Policy 

Faced with high stocks and Indonesia’s differential export tax system, GOM began implementing a new export tax structure in 2013, with the 4.5 percent assessed for the first time in March. Processed palm oil such as neutralized, bleached, and deodorized palm olein is fully exempt from export tax. The newtax structure should make the local oleo-chemical industry more competitive with Indonesian refiners and increase their utilization rate.

Given price expectations for the rest of this marketing year, the export tax will unlikely be implemented throughout the remainder of 2012/13. 

2. Palm Kernel Oil 

Production of Palm Kernel Oil (PKO) is expected to increase two percent to 2.18 million tons in 2012/13, an increase of 4.2 percent from 2011/12. Stagnant growth is anticipated for 2013/14, with PKO output estimated to remain at 2.18 million tons. 

PKO exports are forecast to drop slightly to one million tons in 2012/13 and remain constant at below 1.1 million tons in 2013/14. The main destinations are the U.S., China, Japan, Brazil and Egypt. 

3. Coconut Oil 

Total coconut oil import for year 2013 is projected at 110,000 tons. Most of the imports are further refined and for re-exported to third countries namely Singapore and Russia with export forecast at 160,000 tons in 2013. Coconut oil accounts for less than 1 percent of local consumption