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Malaysia’s Palm Oil Supply and Demand for 2018 

• The year 2017 witnessed significant recovery of the Malaysian palm oil production from the 2015/2016 El-Nino phenomenon, which hit output severely in 2016. Crude palm oil (CPO) production in 2017 recorded a double-digit growth of 15.0%, stood at 19.92 million tonnes from 17.32 million tonnes in 2016. The increase was due to higher FFB processed, by 17.7% arising from higher productivity, which increased by 12.4% to 17.89 tonnes/hectare. In the global arena, firmer major competing oils prices and higher crude oil prices had contributed towards higher palm oil prices. The average CPO price in 2017 was higher by 4.9% to RM2,783 per tonne as compared to RM2,653 per tonne in 2016. The widened CPO price discount as against other major competing oils in 2017 as compared to the previous year had positively influenced exports to major markets. Total exports oil palm products amounted to 23.93 million tonnes, higher by 2.8% as against 23.29 million tonnes in 2016. Improved export demand coupled with firmer palm oil prices contributed to the higher palm oil export revenue in 2017 by 15.4% estimated at RM78 billion as against RM67.58 billion in 2016. Improvements in 2017 were also seen in oil palm planted area, production, exports, imports, albeit higher closing stocks. For 2018, Malaysian oil palm industry is expected to continue its momentum in 2017, particularly for palm oil production and exports. However palm oil prices are expected to decline in 2018.