PETALING JAYA: Growth in the economy and urbanisation are pushing higher food demand in Africa, hence the world’s second most populous continent should be the new market for Malaysian palm oil exporters, says founder and director of Global Farm Trade Sandeep Singh.
The population in Africa he said is expected to increase by 2030 and the continent would also overcome India to become the world’s second largest palm oil consumer after China.
“They are slowly catching up and since there are no major oil palm grown there, we have the advantage to penetrate the market and promote this “versatile oil” via joint venture and making Togo, for example, as a strategic entry point to West Africa,” he said in his presentation during a market forum hosted by the Malaysia Palm Oil Council (MPOC) here today.
The half-day forum entitled “Embracing Challenges, Optimising Opportunities” was aimed to help industry members gain a better understanding of various developments impacting palm oil exports.
Sandeep added that most palm oil imports to Africa are mainly from Togo and Benin, due to their lower import duties.
“It also has the proximity to large markets such as Nigeria, Ghana, Ivory Coast, Burkina Faso and Niger, which make up the majority of total regional demand”.
Meanwhile, plantation consultant and director of Ganling Sdn Bhd Ling Ah Hong said the production of crude palm oil for this year is not going to slow down and impact the commodity’s price.
“The stock needs to come down to 2.4 million tonnes from the current 3.05 million tonnes, which is still high above the trend line.
“We expect the stock to moderate demand in the first half of 2019 with better demand and seasonal lower production,” he said.
Ling also said impact from the emergence of El Nino weather phenomenon is likely to be weak and would be too late to affect palm oil output this year.
The good weather conditions in the last 24 months would be conducive for palm oil growth and supply, he said.
He expects Malaysian CPO production to reach 20.2 million tonnes this year (up by 3.5 per cent) while Indonesia’s production would climb to 42.4 million tonnes (+7 per cent).
On the future of CPO prices, it is expected to trade sideways between RM2,000 per tonne and RM2,500 per tonne and likely to be volatile, driven mainly by demand related news— biodiesel consumption and buying from key importers like China and India. – Bernama
