Siva Parameswaran World News Editor
African countries are expected to import more than ten million tonnes of crude palm oil (CPO) from Malaysia in the next twelve months, analysts say.
Despite the Covid-19 lockdown and cargo movement restrictions, the higher demand for the edible oil in Africa is expected to give a boost to the bilateral economy between Malaysia and Africa.
Nigeria remains the top country in palm oil import from Malaysia according to government data. Kenya, Ghana, Djibouti, Tanzania, and Ethiopia have been identified as growing markets for Malaysian CPO.
The palm oil market size by economic value is estimated at nearly $10 billion. The year-on-year increase averages at about 4% according to Abdul Melik, an economic analyst based in Kuala Lumpur.
“Africa imports about 15% of the global CPO for its consumption, but only account 4% of the global output. This gives a huge opportunity for African players in the business”.
Sub-Saharan Africa to consume more
The decline in palm oil exports to Africa from Indonesia in recent years has been seized by Malaysia in driving its exports. The Malaysian government recently announced a 100% exemption on CPO export duty.
With this move Malaysia expects higher CPO exports to sub-Saharan Africa.
The Malaysian palm oil council says ‘Africa is its priority’ in the coming years and expects a huge volume growth in the next five years.
Sub-Saharan African countries are expected to import and consume a significant amount of palm oil in the next 12 months to replenish the existing stocks and the resurging demand for edible palm oil post-COVID-19 pandemic.
Malaysian palm oil council expects Madagascar, Ghana, and Kenya to import more compared to the previous year.
Amidst rising concerns large scale palm oil plantation and production has expanded in West and Central Africa. The demand for palm oil locally has seen a sharp increase in local production.
But serious environmental concerns have been raised about the loss of forest land and sustainable farming.