Indonesia’s controversial ban on palm oil exports has sent global edible oil prices soaring, creating a supply gap that Malaysia is in a pole position to fill. But ongoing labor shortages due to more than two years of Covid-19 border curbs have left the country ill-equipped to fully capitalize on a golden opportunity to expand its market share.
Zuraida Kamaruddin, Malaysia’s Plantation Industries and Commodities Minister, has nonetheless reassured markets that global demand would be met by raising production, promising new foreign worker arrivals in May and June after plans to add more labor have stalled for months. Malaysia and Indonesia jointly account for 85% of global palm oil output.
Apart from Indonesia’s haphazard export ban, enacted to tamp down soaring domestic prices, vegetable oil prices climbed to all-time highs in March after Russia’s invasion of Ukraine disrupted sunflower oil shipments and drought in South America led to reduced soybean production in Brazil, the world’s biggest exporter of the oilseed.
Supply uncertainties have so far benefited Malaysian palm oil, with exports to the European Union, where the commodity had been increasingly shunned due to environmental and forced labor concerns, surging 48.3% in March compared with February, while exports to India, the world’s largest importer of edible oils, rose 20.8% in March.
Read the full story at Asia Times.
Nile Bowie is a journalist and correspondent with the Asia Times covering current affairs in Singapore and Malaysia. He can be reached at nilebowie@gmail.com.
