KUALA LUMPUR: Recovering Indonesian palm oil exports will not dampen Malaysia’s competitiveness in edible oil exports, Malaysia’s goods minister said on Sunday, pointing to a loss in rival sales to India.
Minister Juraida Kamruddin “urges all Malaysian oil palm growers – both tree planters and small owners – not to be unduly concerned about recent developments.”
Indonesia is the largest producer of palm oil, followed by Malaysia. Prices of all types of edible oils have reached record highs this year as the war in Ukraine disrupts the supply of sunflower oil, one of them.
Concerned about rising domestic cooking oil prices, Jakarta banned palm oil exports on April 28, but said on Thursday that the ban would expire on May 23. Then on Friday, the Indonesian government said producers still needed to sell enough locally to keep up. 10 million tons of internal reserves.
India, traditionally getting two-thirds of its palm oil from Indonesia, has been forced to buy more from Malaysia and Thailand, while other frustrated importers have said they will reduce reliance on unpredictable Indonesian supplies.
“Indonesian policies can work well for the benefit of Malaysia …,” said Juraidah, Minister of Plantation Industry and Products. Indonesia’s export control policy “(Malaysia) will enable India to emerge as an influential supplier,” he said.
The title of his speech was: “Malaysia will not lose competitive edge due to resumption of Indonesian palm oil exports.”
Juraida said his ministry did not expect a major downward adjustment in crude palm oil prices after Indonesia’s latest policy announcement.
He added that due to geopolitical tensions and unfavorable weather, prices will remain high due to uncertainty in major oilseed production.
Juraidar’s ministry is talking to the finance ministry about proposals to temporarily halve export taxes on crude palm oil to fill the global shortage of edible oil and increase Malaysia’s market share, he told Reuters in an interview last week. (Reporting by Mei Mei Chu; Editing by Bradley Parrett)