The MPOC’s Palm Pulse July 2023 report also forecasts that the overall export of Malaysian palm oil products to the EU-27 will surpass three million tonnes.
From January to May 2023, the export of Malaysian palm oil products to the EU experienced a decline of 14% or 144,065 tonnes.
Meanwhile, total exports for this period decreased to 1.04 million tonnes, compared to 1.19 million tonnes in the same period of the previous year.
“The decrease in imports of total palm oil into the EU-27, compared to two years ago, was attributed to reduced consumption due to high prices, inflation, subdued demand for energy and food, and an expected improvement in local production.
According to the report, the decline in palm oil imports can be attributed to several factors. The low purchases from the food sector, combined with abundant supplies of rapeseed oil and sunflower oil in the EU market, have played a significant role in this decrease.
Additionally, the accumulation of excessive stocks of sunflower oil from the previous year, coupled with exceptionally high imports, particularly from Ukraine, has further intensified the downward trend in palm oil imports.
MPOC has also provided an outlook on crude palm oil (CPO) prices for July 2023, indicating a slight weakening trend, with a price cap at RM3,650 per tonne.
The easing of CPO prices is primarily attributed to the anticipated abundant supply of oilseeds in the second half of 2023.
“However, it is worth noting that the development of the El Nino phenomenon is anticipated to exert upward pressure on palm oil prices, potentially keeping them above the RM3,250 mark,” it said.
Regarding the issue of forced labour, the report stated that the Malaysian government recognises the significant challenges related to labour rights in an economy that heavily relies on migrant workers.
It highlights that sectors such as manufacturing, textiles, domestic labour, and agriculture are all affected by this issue.
“The EU regulation also acknowledges the existence of forced labour within Europe, necessitating efforts to eradicate it,” said the report.