Palm Oil industry outlook for 2021
March 01st, 2021
The Covid-19 Pandemic and ensuing lockdowns had a devastating impact on the palm oil industry in 2020. Annual consumption of palm oil decreased for the first time in 40 years. There have been a few major developments in the last three months that indicate a better outlook for 2021. First, Indonesia adopted a progressive export duty structure. At current prices, the applicable export duty is USD93/T. Malaysia followed by reinstating an 8% duty on the export of CPO, approximately USD75/T at current prices. India, the largest consumer, and importer of palm oil, revised its import duty structure and introduced a new tax - the Infrastructure and Development cess (AIDC). making palm more competitive to soft oils. The outlook for 2021 is positive. Palm oil imports in 2020 declined by 24% to 7.51 million tons. Palm oil imports for the first half of 2021 are anticipated at 7 million MT. In China, oils, and fats demand in 2021 will see higher growth especially on Q1, 2021. compared to the first quarter of last year especially as the catering sector was badly disrupted in the same period last year.