Required Report - public distribution

**Date:** 3/30/2004

**GAIN Report Number:** MY4014

MY4014

**Malaysia**

**Oilseeds and Products**

**Updates (March)**

**2004**

**Approved by:**

![](media/image1.wmf)Bonnie Borris

U.S. Embassy, Kuala Lumpur

**Prepared by:**

Raymond Hoh

**Report Highlights:**

Malaysia\'s CPO production dropped by 1.6 percent to 862 TMT in February
2004. Carry-over levels at end of February also dropped to 988 TMT. PO
exports rose to 940 TMT in February. Average local CPO price rose from
US\$504/MT in February to US\$526/MT in March.

Includes PSD Changes: No

Includes Trade Matrix: No

Unscheduled Report

Kuala Lumpur \[MY1\]

\[MY\]

Table of Contents

[Executive Summary 3](#executive-summary)

[Annual Situation 4](#annual-situation)

[Quarterly Outlook for Palm Oil 5](#quarterly-outlook-for-palm-oil)

[Production 6](#production)

[Prices 7](#prices)

[Stock 8](#stock)

# Executive Summary

Production

The Malaysian Palm Oil Board (MPOB) reported that total crude palm oil
(CPO) production dropped by 1.6 percent to 862 TMT in February 2004. CPO
output in the Peninsula rose 6.1 percent in February while East
Malaysia's production was down by 11.4 percent. Compared to February
2003, output during February 2004 was 12.7 percent higher. CPO output
experienced a seasonal low production in Jnauary/February period and a
turn-around is anticipated in April. Post expects CPO production to
increase to 3.5 MMT during the Apr-Jun quarter.

Price

In line with the global soy oil prices, local PO prices recorded a big
increase during the month of March. The monthly average CPO price rose
from US\$504/MT in February to US\$526/MT in March 2004. For comparison,
the average CPO price for March 2004 was US\$396/MT. The RBD Palm Oil
FOB average price also rose from US\$513/MT in February to US\$544/MT in
March.

Stocks

A decline in domestic CPO output and stronger PO exports resulted in the
PO stock level dropping to 988 TMT at the end of February. Strong
overseas demand is expected to consume much of the increase in CPO
output in the Apr - Jun quarter. Post expects a small increase in the
carry-over stocks to around 1 MMT by the end of June.

Trade

Preliminary official PO exports rose from 910 TMT in January to 940 TMT
in February.

# Annual Situation

PS&D table for palm oil remains unchanged since the submission of
MY4013.

+--------------------+--------------+----------------+-----------------+
|                    | Revised      | Prelim         | Forecast        |
|                    |              |                |                 |
|                    | 2002/03      | 2003/04        | 2004/05         |
+--------------------+--------------+----------------+-----------------+
| (1,000 tons)       |              |                |                 |
+--------------------+--------------+----------------+-----------------+
| Beg Stock          | 1,149        | 975            | 900             |
+--------------------+--------------+----------------+-----------------+
| Production         | 13,181       | 13,700         | 13,800          |
+--------------------+--------------+----------------+-----------------+
| Imports            | 341          | 400            | 500             |
+--------------------+--------------+----------------+-----------------+
| Total Supply       | 14,671       | 15,075         | 15,200          |
+--------------------+--------------+----------------+-----------------+
| Exports            | 12,077       | 12,200         | 12,300          |
+--------------------+--------------+----------------+-----------------+
| Domestic Use       | 1,619        | 1,975          | 1,900           |
+--------------------+--------------+----------------+-----------------+
| Ending Stock       | 975          | 900            | 1,000           |
+--------------------+--------------+----------------+-----------------+

# Quarterly Outlook for Palm Oil

  ------------------------- ----------- ----------- ----------- ------------
                            2003 1/     2004 1/     2003 1/     2004 1/

                            Jan-Mar     Jan-Mar     Apr-Jun     Apr-Jun

                            (1,000                              
                            tons)                               

  Beg Stocks 3/             1136        1165        1011        980

  Prod- Pen. Mal            1590        1655        2151        2180

  \- East Mal               1024        1185        1331        1340

  \- Total                  2614        2840        3482        3520

  Imports                   162         190         71          150

  Total Supply              3912        4195        4564        4650

  Exports 4/                2450        2850        3068        3250

  Dom Disap 5/              451         365         501         400

  End Stocks                1011        980         995         1000
  ------------------------- ----------- ----------- ----------- ------------

1/ Revised;

2/ Forecast;

3/ Stocks including crude and refined for all Malaysia;

4/ Exports exclude shipments of fatty acid oil distillate

and all intra-Malaysia trade;

5/ residual

# Production

+---------------+----------+----------+---------+----------+---------+
|               | 2003     | 2003     | 2004    | 2004     | 2004    |
+---------------+----------+----------+---------+----------+---------+
|               | Feb      | Jan-Feb  | Jan 1/  | Feb      | Jan-Feb |
+---------------+----------+----------+---------+----------+---------+
| (In 1,000 MT) |          |          |         |          |         |
+---------------+----------+----------+---------+----------+---------+
| CPO:          |          |          |         |          |         |
+---------------+----------+----------+---------+----------+---------+
| Pen. Malaysia | 471      | 969      | 492     | 522      | 1014    |
+---------------+----------+----------+---------+----------+---------+
| East Malaysia | 295      | 660      | 385     | 341      | 726     |
+---------------+----------+----------+---------+----------+---------+
| \- Total /1   | 766      | 1629     | 877     | 863      | 1740    |
+---------------+----------+----------+---------+----------+---------+
|               |          |          |         |          |         |
+---------------+----------+----------+---------+----------+---------+
| Palm Kernel : | 215      | 457      | 239     | 239      | 478     |
|               |          |          |         |          |         |
| Malaysia      |          |          |         |          |         |
+---------------+----------+----------+---------+----------+---------+
|               |          |          |         |          |         |
+---------------+----------+----------+---------+----------+---------+
| Palm Kernel   | 99       | 217      | 112     | 116      | 228     |
| Oil:          |          |          |         |          |         |
|               |          |          |         |          |         |
| Malaysia      |          |          |         |          |         |
+---------------+----------+----------+---------+----------+---------+
|               |          |          |         |          |         |
+---------------+----------+----------+---------+----------+---------+
| Palm Kernel   | 116      | 254      | 130     | 133      | 263     |
|               |          |          |         |          |         |
| Meal:         |          |          |         |          |         |
|               |          |          |         |          |         |
| Malaysia      |          |          |         |          |         |
+---------------+----------+----------+---------+----------+---------+

1/ Revised

# Prices

(Crude delivered basis; RBD Oils in Bulk, FOB Malaysia)

+------------------+-----------+-----------+-------------+-----------+
|                  | Local     | RBD Palm  | RBD Olein   | RBD       |
|                  | Crude     | Oil       |             | Stearin   |
+------------------+-----------+-----------+-------------+-----------+
|                  | RM/MT     | US\$/MT   | US\$/MT     | US\$/MT   |
+------------------+-----------+-----------+-------------+-----------+
| Mar 2003         | 1503      | 410       | 421         | 372       |
+------------------+-----------+-----------+-------------+-----------+
| Apr              | 1460      | 400       | 415         | 355       |
+------------------+-----------+-----------+-------------+-----------+
| May              | 1480      | 402       | 424         | 339       |
+------------------+-----------+-----------+-------------+-----------+
| Jun              | 1513      | 416       | 441         | 342       |
+------------------+-----------+-----------+-------------+-----------+
| Jul              | 1500      | 414       | 442         | 338       |
+------------------+-----------+-----------+-------------+-----------+
| Aug              | 1393      | 393       | 420         | 317       |
+------------------+-----------+-----------+-------------+-----------+
| Sep              | 1439      | 400       | 427         | 320       |
+------------------+-----------+-----------+-------------+-----------+
| ######## Oct     | 1663      | 455       | 472         | 408       |
+------------------+-----------+-----------+-------------+-----------+
| ######## Nov     | 1855      | 501       | 526         | 457       |
+------------------+-----------+-----------+-------------+-----------+
| ######## Dec     | 1829      | 501       | 513         | 458       |
+------------------+-----------+-----------+-------------+-----------+
| ######## Jan     | 1790      | 481       | 493         | 464       |
+------------------+-----------+-----------+-------------+-----------+
| ######## Feb 1/  | 1917      | 513       | 529         | 468       |
+------------------+-----------+-----------+-------------+-----------+
| ######## M       | 2000      | 544       | 557         | 484       |
| ar 2004(till 29) |           |           |             |           |
+------------------+-----------+-----------+-------------+-----------+

1/ Revised

Exchange Rate: Pegged at RM3.799 to US\$1.00 since 1998

# Stock

  ------------------------ ----------- ----------- ------------ -----------
                           2003        2003        2003         2004

                           Feb         Dec         Jan 1/       Feb

  (In 1,000 MT)                                                 

  Crude P. Oil             494         594         538          466

  Processed PO             597         572         539          522

  \- Total PO              1091        1166        1077         988

                                                                

  Palm Kernel              99          112         104          84

  P. Kernel Oil            254         170         164          162
  ------------------------ ----------- ----------- ------------ -----------