Required Report - public distribution

**Date:** 3/1/2004

**GAIN Report Number:** MY4009

MY4009

**Malaysia**

**Oilseeds and Products**

**Update (February)**

**2004**

**Approved by:**

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

U.S. Embassy, Kuala Lumpur

**Prepared by:**

Raymond Hoh

**Report Highlights:**

Malaysia\'s CPO production dropped 22.7 percent to 876 TMT in January
2003. Carry-over stock level at the end of January also dropped to 1.1
MMT. PO exports rose to 910 TMT in January. Average local CPO price rose
from US\$471/MT in January to US\$503/MT in February.

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 22.7 percent to 876 TMT in January 2003.
Output in the Peninsula declined by 25 percent in January while East
Malaysia's production is down 19 percent. Compared to January 2003,
output during January 2004 was 1.5 percent higher.

Price

Local PO prices basically rose in tandem with the global soy oil prices
during the month of February. The monthly average CPO price rose from
US\$471/MT in January to US\$503/MT in February 2004. For comparison,
the average CPO price for February 2002 was US\$426/MT. The RBD Palm Oil
FOB average price also rose from US\$481/MT in January to US\$513/MT in
February.

Stocks

A sharp decrease in domestic CPO output and stronger PO exports resulted
in the PO stock level dropping to 1.1 MMT at the end of January. With
the anticipation of further decline in PO output in the next few months,
Post expects carry-over stock levels to drop to around 1.0 MMT by the
end of Jan--Mar quarter.

Trade

Preliminary official PO exports rose from 870 TMT in December to 910 TMT
in January.

# Annual Situation

PS&D table for palm oil remains unchanged since the submission of
MY3058.

+--------------------+--------------+----------------+-----------------+
|                    | Revised      | Prelim         | Forecast        |
|                    |              |                |                 |
|                    | 2001/02      | 2002/03        | 2003/04         |
+--------------------+--------------+----------------+-----------------+
| (1,000 tons)       |              |                |                 |
+--------------------+--------------+----------------+-----------------+
| Beg Stock          | 1,216        | 1,149          | 975             |
+--------------------+--------------+----------------+-----------------+
| Production         | 11,858       | 13,180         | 13,700          |
+--------------------+--------------+----------------+-----------------+
| Imports            | 325          | 436            | 350             |
+--------------------+--------------+----------------+-----------------+
| Total Supply       | 13,399       | 14,765         | 15,025          |
+--------------------+--------------+----------------+-----------------+
| Exports            | 10,163       | 12,076         | 11,500          |
+--------------------+--------------+----------------+-----------------+
| Domestic Use       | 2,087        | 1,714          | 2,425           |
+--------------------+--------------+----------------+-----------------+
| Ending Stock       | 1,149        | 975            | 1,100           |
+--------------------+--------------+----------------+-----------------+

# Quarterly Outlook for Palm Oil

  ------------------------- ----------- ----------- ----------- ------------
                            2002 1/     2003 2/     2003 1/     2004 1/

                            Oct-Dec     Oct-Dec     Jan-Mar     Jan-Mar

                            (1,000                              
                            tons)                               

  Beg Stocks 3/             1149        975         1136        1165

  Prod- Pen. Mal            1811        1876        1590        1655

  \- East Mal               1395        1504        1024        1245

  \- Total                  3206        3380        2614        2900

  Imports                   139         161         147         150

  Total Supply              4494        4516        3897        4215

  Exports 4/                2925        3040        2504        2790

  Dom Disap 5/              433         311         382         425

  End Stocks                1136        1165        1011        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

+-------------+----------+----------+----------+----------+----------+
|             | 2002     | 2003     | 2003     | 2003 1/  | 2004     |
+-------------+----------+----------+----------+----------+----------+
|             | Jan-Dec  | Jan      | Jan-Dec  | Dec      | Jan      |
+-------------+----------+----------+----------+----------+----------+
| (In 1,000   |          |          |          |          |          |
| MT)         |          |          |          |          |          |
+-------------+----------+----------+----------+----------+----------+
| CPO:        |          |          |          |          |          |
+-------------+----------+----------+----------+----------+----------+
| Pen.        | 7017     | 498      | 7944     | 655      | 492      |
| Malaysia    |          |          |          |          |          |
+-------------+----------+----------+----------+----------+----------+
| East        | 4890     | 365      | 5409     | 477      | 384      |
| Malaysia    |          |          |          |          |          |
+-------------+----------+----------+----------+----------+----------+
| \- Total /1 | 11907    | 863      | 13353    | 1132     | 876      |
+-------------+----------+----------+----------+----------+----------+
|             |          |          |          |          |          |
+-------------+----------+----------+----------+----------+----------+
| Palm Kernel | 3267     | 242      | 3626     | 309      | 239      |
| :           |          |          |          |          |          |
|             |          |          |          |          |          |
| Malaysia    |          |          |          |          |          |
+-------------+----------+----------+----------+----------+----------+
|             |          |          |          |          |          |
+-------------+----------+----------+----------+----------+----------+
| Palm Kernel | 1472     | 118      | 1535     | 138      | 112      |
| Oil:        |          |          |          |          |          |
|             |          |          |          |          |          |
| Malaysia    |          |          |          |          |          |
+-------------+----------+----------+----------+----------+----------+
|             |          |          |          |          |          |
+-------------+----------+----------+----------+----------+----------+
| Palm Kernel | 1715     | 138      | 1910     | 161      | 130      |
|             |          |          |          |          |          |
| Meal:       |          |          |          |          |          |
|             |          |          |          |          |          |
| Malaysia    |          |          |          |          |          |
+-------------+----------+----------+----------+----------+----------+

1/ Revised

# Prices

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

+-----------------+----------+--------------+-----------+-------------+
|                 | Local    | RBD Palm Oil | RBD Olein | RBD Stearin |
|                 | Crude    |              |           |             |
+-----------------+----------+--------------+-----------+-------------+
|                 | RM/MT    | US\$/MT      | US\$/MT   | US\$/MT     |
+-----------------+----------+--------------+-----------+-------------+
| Feb 2003        | 1617     | 434          | 449       | 395         |
+-----------------+----------+--------------+-----------+-------------+
| Mar             | 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 1/ | 1790     | 481          | 493       | 464         |
+-----------------+----------+--------------+-----------+-------------+
| ######## Fe     | 1910     | 513          | 528       | 467         |
| b 2004(till 27) |          |              |           |             |
+-----------------+----------+--------------+-----------+-------------+

1/ Revised

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

# Stock

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

                           Jan         Nov         Dec 1/        Jan

  (In 1,000 MT)                                                  

  Crude P. Oil             529         464         594           537

  Processed PO             571         456         572           537

  \- Total PO              1100        920         1166          1074

                                                                 

  Palm Kernel              107         109         112           103

  P. Kernel Oil            279         168         170           164
  ------------------------ ----------- ----------- ------------- -----------