PETALING JAYA: The increase in palm oil stockpile should not be a concern as exports are expected to improve, says Datuk Zuraida Kamaruddin.

       The Plantation Industries and Commodities Minister said the stockpile was likely to dip as stronger exports were expected following the Indonesian government’s recent move to widen its export ban on raw materials for cooking oil and crude palm oil (CPO) production.

       However, Indonesia announced on Thursday (May 19) that it had decided to lift its palm oil export ban from May 23 (Monday) following improvements in the domestic cooking oil supply situation and taking into consideration the welfare of 17 million workers in the palm oil industry.

       Malaysia's palm oil stockpile increased for the first time since October by 11.5% month-on-month to 1.64 million tonnes in April, driven by higher output (a 3.6% increase to 1.46 million tonnes) and weaker exports (a drop of 17.7% to 1.06 million tonnes).

       “Exports were dragged by lower exports to China (-50.8%), European Union (EU) (-23.2%) and Pakistan (-90.3%) due to several factors including strict Covid-19 lockdowns which hampered palm oil shipments to China, and demand destruction as a result of high prices.

       “CPO prices surged past the RM7,000/tonne mark to hit its period peak of RM7,516/tonne following news that Indonesia had banned palm oil exports from April 28,” she said in a statement on Friday (May 20).

       Despite that, she said, preliminary data from AmSpec Agriculture Malaysia indicated that palm oil shipments alone surged by 40.32% in the first 10 days of May on account of Indonesia’s absence from the global export market, a weak ringgit and widening discounts.

       To overcome the increase in stockpile and compete in the market, she said her ministry was in the midst of discussions with the Finance Ministry on reducing export tax for palm oil.