Palm oil and fractions market in Malaysia

Earlier Report Observations

Between 2018 and 2020, Malaysian crude palm oil production first rose slightly to 19.9 million tonnes in 2019, then dropped to 19.1 million tonnes in 2020. The decline in 2020 was driven by the COVID-19 pandemic, which disrupted global demand and caused labor shortages in the sector. During this period, the domestic market volume fell to 5.1 million tonnes in 2019 but recovered to 5.5 million tonnes in 2020 as export volumes were reduced by a political dispute with India.

Production continued to decrease to 18.1 million tonnes in 2021 before recovering to 18.5 million tonnes by 2023. The rebound was supported by improved labor supply after COVID-19 restrictions eased, along with government promotion of mechanization and digitalization. The Malaysian Sustainable Palm Oil (MSPO) certification scheme was expanded, reaching near-full coverage of planted areas by 2022. In that year, major players like Sime Darby Oils announced new specialty oils refinery facilities, adding capacity to the market. The domestic market volume grew to 6.2 million tonnes in 2022, aided by high global prices and supply tightness following Indonesia's temporary export ban, before easing to 6.0 million tonnes in 2023.

Production palm oil and fractions in Malaysia

In kind, 2018-2021, K t

On a global scale, Malaysia ranked as the world's second-largest producer of palm oil and fractions from 2018 to 2021.

Top producers of palm oil and fractions, 2018-2021

World map of production of palm oil and fractions, 2018-2021

Malaysia's production of palm oil and fractions declined for the second consecutive year. In 2021, the country produced 18,116 thousand tons, marking a 5.4% decrease from the previous year. Over the 2018-2021 period, production fell by 7.2%, with a compound annual growth rate of -2.5%. Production peaked in 2019 at 19,858 thousand tons, which represented the largest annual increase of 1.8% during this timeframe.

Annual dynamics of production in Malaysia in kind, 2018-2021, K t

Exports palm oil and fractions from Malaysia

Exports in kind, K t

Malaysia's exports of palm oil and fractions declined for the second year in a row. In 2021, the country exported 13,512 thousand tons, a 7.3% drop compared to 2020. Between 2018 and 2021, exports decreased by 2.4%, equivalent to an annualized decline of 0.8%. Exports reached their highest level in 2019 at 15,777 thousand tons, which saw the largest annual increase of 13.9%. The most significant decline occurred in 2020, with a 7.6% decrease.

Annual dynamics of product's exports from Malaysia in kind, 2018-2021, K t

From 2018 to 2021, Malaysia's palm oil and fractions exports were distributed across a wide range of trading partners. India accounted for 21.2% of exports, China for 10.0%, and the Netherlands for 5.8%. Together, these three countries represented just 37.0% of total export volumes, while the remaining 63.0% went to numerous other destinations.

Structure of product's exports in kind by countries, 2018-2021

World map of product's exports from Malaysia in kind, 2018-2021

Exports in value, M $ US

Malaysia's palm oil and fractions exports increased in value for the second consecutive year. In 2021, exports totaled 14,209 million US dollars, a sharp 45.4% rise compared to 2020. Between 2018 and 2021, export value grew by 63.8%, equivalent to an annualized rate of 17.9%. The lowest value was recorded in 2019 at 8,597 million US dollars, which saw a minor decline of 0.9%.

Annual dynamics of product's exports from Malaysia in value, 2018-2021, M $ US

From 2018 to 2021, Malaysia's palm oil and fractions exports in value terms relied on a diverse set of partner countries. India accounted for 21.0% of export value, China for 9.1%, and the Netherlands for 5.8%. Combined, these three markets represented only 35.9% of total export flows.

Structure of product's exports in value by countries, 2018-2021

World map of product's exports from Malaysia in value, 2018-2021

Imports palm oil and fractions to Malaysia

Imports in kind, K t

Malaysia's imports of palm oil and fractions increased in 2021, reaching 1,095 thousand tons—a 19.2% gain over the previous year. Over the 2018-2021 period, imports grew by 35.7%, with a compound annual growth rate of 10.7%. The largest annual increase occurred in 2019 at 32.2%, while the most significant decline was in 2020, with a 13.9% drop.

Annual dynamics of product's imports to Malaysia in kind, 2018-2021, K t

Throughout 2018-2021, Indonesia remained the nearly exclusive supplier of palm oil and fractions to Malaysia, accounting for 90.4% of total import volumes.

Structure of product's imports in kind by countries, 2018-2021

World map of product's imports to Malaysia in kind, 2018-2021

Imports in value, M $ US

Malaysia's imports of palm oil and fractions increased in value for the third consecutive year. In 2021, imports amounted to 1,095 million US dollars, a substantial 74.7% uptick compared to 2020. Between 2018 and 2021, import value surged by 151.4%, equivalent to an annualized growth rate of 36.0%.

Annual dynamics of product's imports to Malaysia in value, 2018-2021, M $ US

From 2018 to 2021, the structure of Malaysia's palm oil and fractions imports in value terms was dominated by a single market: Indonesia, which accounted for 90.7% of total import flows.

Structure of product's imports in value by countries, 2018-2021

World map of product's imports to Malaysia in value, 2018-2021