Malaysian CPO output, exports forecast lower: USDA

Market: Biofuels, Fertilizers
06/10/20

The US Department of Agriculture (USDA) has lowered its crude palm oil (CPO) output projections for Malaysia in the October 2020 to September 2021 marketing year by 1mn t from its previous forecast in June to 19.7mn t.

This fall stems from Malaysia's foreign labour shortage following Covid-19 related border closures until December, which is expected to suppress production at least into the first quarter of this marketing year. Output was also estimated down by 200,000t to 19.3mn t for the 2019-20 marketing year with labour issues and insufficient rainfall and fertilizer application the previous year.

Exports in 2020-21 will be 500,000t lower than June expectations at 17mn t, stifled by a slower than anticipated post-pandemic global demand recovery, according to the USDA. Export estimates for the 2019-20 marketing year remain flat at 16.8mn t, as India lifted temporary import restrictions allowing for near normal trade flows in the fourth quarter of the marketing year.

The USDA projects domestic CPO consumption will rise by 200,000t to almost 3.8mn t in 2020-21, with Malaysia due to roll out its postponed 20pc biodiesel blending (B20) mandate across remaining states by 15 June 2021. Sarawak joined Langkawi and Labuan as the third state to mandate B20 from 1 September.

By Lauren Moffitt

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