Malaysia: Oilseeds and Products Update

Post adjusted the Marketing Year (MY) 2020/21 crude palm oil (CPO) production forecast down by 8,000 tons to 18.7 million tons. COVID-19 has caused acute labor shortages as the Government of Malaysia (GOM) halted the intake of new foreign workers indefinitely, while allowing foreign workers with expired work permits to return home, thus exaggerating the labor issues. Post revised the MY 2020/21 CPO export estimate to 16.85 million metric tons, a drop of 600,000 metric tons (MT) due to the recent increase in the price of CPO, relative to the price of soybeans, making palm oil less attractive than soybeans. In addition, the traditional export markets other than India, including China, the European Union, the United States, and Pakistan are replenishing their vegetable oil stocks at a slower pace than normal due to the slow recovery in demand for oil, caused by the COVID-19 pandemic.