BY : NORIHAN HUSAIN,AYAT B A RAHMAN

MALAYSIAN OIL PALM INDUSTRY PERFORMANCE:

FIRST HALF 2015

MPOC POINTERS17-21 AUGUST 2015

1

OUTLINE OF PRESENTATION

INTRODUCTION

2MALAYSIAN OIL PALM INDUSTRY PERFORMANCE FIRST HALF 2015

3EXPECTED DEVELOPMENTS IN THE SECOND HALF OF 2015

4 CONCLUSION

2

3

INTRODUCTION

The Malaysian oil palm industry encounteredsome challenges in FH2015:

• Crude palm oil production was affected byheavy rainfalls at the beginning of the year

• High carry-over stocks, high imports and lowexport demand pushed palm oil stocks toabove 2 million tonnes

• Weak fundamentals further dampened palm oilprices, which contributed to relatively lowexport earnings.

4

PERFORMANCE OF THE MALAYSIAN OIL PALM INDUSTRY

IndicatorsJan-June

2015Jan- June

2014

Difference

%

PALM OIL:Volume (Tonnes):

Opening StockProductionImportExportClosing Stock

Export Revenue(RM Mil)Palm OilTotal Oil Palm Products

Price (RM/Ton):FFBCPOCPKO

2,015,7899,045,527464,606

7,833,8342,151,774

18,709.827,689.3

471.002,219.003,480.00

1,987,1539,064,352143,931

8,133,9651,656,756

22,292.731,856.9

581.002,605.004,000.50

1.4(0.2)

3-folds(3.7)29.9

(16.1)(13.1)

(18.9)(14.8)(13.0)

5Source : MPOB

6

OIL PALM PLANTED AREA

7

OIL PALM PLANTED AREA BY STATE(HECTARES)

State June 2015 June 2014Growth

%

JohorKedahKelantanMelakaNegeri SembilanPahangPerakPerlisP. PinangSelangorTerengganu

740,33487,090

150,15354,548

177,219724,116393,718

29414,344

138,595174,465

732,05985,489

144,75953,912

170,397721,444391,302

28913,967

137,066168,769

1.11.93.71.24.00.40.61.62.71.13.4

Pen. Malaysia 2,654,876 2,619,453 1.4

SabahSarawak

1,532,6331,384,959

1,497,7471,210,802

2.314.4

Sabah & Sarawak 2,917,592 2,708,549 7.7MALAYSIA 5,572,468 5,328,002 4.6

Source : MPOB

Expansion:• Sarawak :

174,157 ha• Sabah :

34,886 ha• Pen. Malaysia :

35,423 ha

Terengganu : 0.17 Mn HaPerak : 0.39 Mn Ha

Pahang : 0.72 Mn Ha

Selangor : 0.14 Mn Ha

Johor : 0.74 Mn Ha

Sabah : 1.53 Mn Ha

Sarawak : 1.38 Mn Ha

• Total Oil Palm Planted Area : 5.57 Mn Ha

• Sabah : 1.53 Mn Ha (27.5%)

• Sarawak : 1.38 Mn Ha (24.9%)

• Pen. Malaysia : 2.65 Mn Ha (47.6%)Kedah : 0.09 Mn Ha

Kelantan : 0.15 Mn Ha

N. Sembilan : 0.18 Mn Ha

DISTRIBUTION OF OIL PALM PLANTED AREA, JUNE 2015 (HECTARES)

8

Melaka : 0.05 Mn Ha

Perlis : 294 Ha

Penang : 0.01 Mn Ha

Source : MPOB

OIL PALM PLANTED AREA,JUNE 2015 (HECTARES)

9

Source : MPOB

87.3%

90.1%82.2%

86.8%

12.7%9.9% 17.8%

13.2%

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

P. Malaysia Sabah Sarawak Malaysia

Mature Immature

• Mature : 4,837,235 Ha

• Immature : 735,233 Ha

10

OIL PALM PLANTED AREA BY CATEGORY

Source : MPOB

Private Estates61.4%

FELDA12.7%

FELCRA3.1%

RISDA1.4%

Other Government

Agencies6.1%

Independent Smallholders

15.3%

June 2015 : 5.57 Mn. ha

11

OIL PALM PLANTED AREA BY CATEGORY (HECTARES)

CategoryJune2015

June2014

Growth%

Private Estates

Federal Land Schemes:FELDAFELCRARISDA

Other Government AgenciesIndependent Smallholders

3,424,203

709,925172,33776,193

337,351852,459

3,277,950

702,880171,78277,360

325,630772,400

4.5

1.00.3-1.5

3.610.4

TOTAL 5,572,468 5,328,002 4.6Source : MPOB

12

PRODUCTIONPERFORMANCE

13

FRESH FRUIT BUNCH (FFB) YIELD,(TONNES/ HECTARE)

RegionJan-June

2015Jan-June

2014Difference

(%)

P. MalaysiaSabahSarawak

8.639.296.94

8.2810.047.07

4.2(7.5)(1.8)

MALAYSIA 8.40 8.50 (1.2)

Source : MPOB

14

MONTHLY FRESH FRUIT BUNCH (FFB) YIELD

Source : MPOB

1.00

1.10

1.20

1.30

1.40

1.50

1.60

1.70

Jan Feb Mar Apr May Jun

Tonn

es/H

a

2014 2015

FH 2015 : 8.40 t/ha (-1.2%)FH 2014 : 8.50 t/ha

15

OIL EXTRACTION RATE (OER) (%)

Source : MPOB

RegionJan-June

2015

Jan-June

2014

Difference

( %)

P. MalaysiaSabahSarawak

19.6921.2820.09

20.2321.3420.43

(2.7)(0.3)(1.7)

MALAYSIA 20.20 20.60 (1.9)

16

MONTHLY OIL EXTRACTION RATE (OER)

Source : MPOB

19.60

19.80

20.00

20.20

20.40

20.60

20.80

21.00

Jan Feb Mar Apr May Jun

OE

R (

%)

2014 2015

FH 2015 : 20.20% (-1.9%)FH 2014 : 20.60%

17

CPO PRODUCTION

Source : MPOB

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

1.80

2.00

Jan Feb Mar Apr May Jun

Mn

Tonn

es

2014 2015

Low CPO production in 1Q 2015 due to low FFB yield and OER

FH 2015 : 9.05 Mn T (-0.2%)FH 2014 : 9.06 Mn T

18

EXPORT PERFORMANCE

19

EXPORTS OF OIL PALM PRODUCTS

Source : MPOB

ProductJan-June 2015 Jan-June 2014 Difference Difference

Tonnes RM Mil Tonnes RM Mil Tonnes % RM Mil %

Palm Oil 7,833,834 18,709.8 8,133,965 22,292.7 (300,131) (3.7) (3,582.9) (16.1)

Palm Kernel Oil

504,945 1,952.9 500,213 2,057.3 4,732 0.9 (104.4) (5.1)

Palm Kernel Cake

1,124,219 406.5 1,273,681 708.7 (149,462) (11.7) (302.2) (42.6)

Oleochemicals

1,369,343 5,480.2 1,369,572 5,728.0 (229) (0.0) (247.8) (4.3)

Finished Products

203,029 784.3 188,555 761.6 14,474 7.7 22.7 3.0

Biodiesel 63,277 182.9 38,495 117.9 24,782 64.4 65.0 55.1

Others 289,274 172.7 289,993 190.7 (719) (0.2) (18.0) (9.4)

TOTAL 11,387,921 27,689.3 11,794,474 31,856.9 (406,553) (3.4) (4,167.6) (13.1)

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EXPORTS OF PALM OIL

Source : MPOB

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

1.80

Jan Feb Mar Apr May Jun

Mn

Tonn

es

2014 2015

FH 2015 : 7.83 Mn T (-3.7%)FH 2014 : 8.13 Mn T

Low export demand from major importing countries esp in 1Q2015

21

EXPORTS OF PALM OIL TOMAJOR DESTINATION (TONNES)

Source : MPOB

CountriesJan-June Difference

2015 2014 Tonnes %

India 1,547,614 1,156,308 391,306 33.8

China, P.R 1,280,044 1,493,251 (213,207) (14.3)

EU 1,036,160 1,141,072 (104,912) (9.2)

Pakistan 343,732 412,927 (69,195) (16.8)

USA 333,221 414,295 (81,074) (19.6)

Vietnam 323,960 277,248 46,712 16.8

Philippines 301,398 221,666 79,732 36.0

Japan 268,972 248,701 20,271 8.2

Others 2,398,733 2,768,497 (369,764) (13.4)

TOTAL 7,833,834 8,133,965 (300,131) (3.7)

22

EXPORTS OF PALM OIL TOMAJOR DESTINATION

Source : MPOB

India19.8%

China, P.R16.3%

EU13.2%Pakistan

4.4%USA4.3%

Vietnam4.1%

Philippines3.8%

Japan3.4%

Others30.6%

Jan-June 2015 : 7.83 million tonnes

23

IMPORT PERFORMANCE

24

IMPORT PERFORMANCE (TONNES)

Source : MPOB

ProductJan-June

2015Jan-June

2014Difference

%

Palm Oil 464,606 143,931 3-folds

Palm Kernel Oil 153,708 53,896 3- folds

Palm Kernel 3,360 13,740 (75.5)

TOTAL 621,674 211,567 3-folds

25

STOCK PERFORMANCE

26

PALM OIL CLOSING STOCK

Source : MPOB

0.00

0.50

1.00

1.50

2.00

2.50

Jan Feb Mar Apr May Jun

Mn

Tonn

es

2014 2015

FH 2015 : 2.15 Mn T (+29.9%)FH 2014 : 1.66 Mn T

27

PRICE PERFORMANCE

28

PRICES OF OIL PALM PRODUCTS (RM/TONNE)

Source : MPOB

ProductJan-June

2015Jan-June

2014

Difference

RM/Tonne %

Fresh Fruits Bunch (Mill Gate)Crude Palm Oil (Lcl Dld)Palm Kernel (Ex-mill)Crude Palm Kernel Oil (Lcl Dld)RBD Palm Oil (FOB)RBD Palm Olein (FOB)RBD Palm Stearin (FOB)PFAD (FOB)

471.002219.001650.503480.002300.502298.002227.502095.00

581.002605.002010.504000.502719.002706.502620.002494.00

(110.00)(386.00)(360.00)(520.50)(418.50)(408.50)(392.50)(399.00)

(18.9)(14.8)(17.9)(13.0)(15.4)(15.1)(15.0)(16.0)

CRUDE PALM OIL PRICE JAN 2014 – JUNE 2015

3,000

3,100

3,200

3,300

3,400

3,500

3,600

Jun 2

011

RM/TO

NNE

Crude Palm Oil Price Trends : May - July 2011 (RM/MT)

1,800

2,000

2,200

2,400

2,600

2,800

3,000

Jan 2

014

Feb Mar

Apr

May

Jun Jul

Aug

Sep

Oct

Nov

Dec

Jan 2

015

Feb Mar

Apr

May

Jun

29

FH 2015 : RM 2,219.00 (-14.8%)FH 2014 : RM 2,605.00

Source : MPOB

2000.00

2200.00

2400.00

2600.00

2800.00

3000.00

Jan Feb Mar Apr May Jun

RM

Ton

ne

2014 2015

CRUDE PALM OIL PRICE

30

FH 2015 : RM 2,219.00 (-14.8%)FH 2014 : RM 2,605.00

Source : MPOB

31

EXPECTED DEVELOPMENTS IN THE SECOND HALF OF 2015

CPO PRODUCTION

0.00

0.50

1.00

1.50

2.00

2.50

Jan Feb Mac Apr May Jun Jul Aug Sep Oct Nov Dec

Mn T

2014 2015

32

Source : MPOB

FH2015: 9.05 MnT SH2015*: 10.81MnT 2015* :19.86 MnT* forecast

EXPORT OF PALM OIL

33

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

1.80

Jan Feb Mac Apr May Jun Jul Aug Sep Oct Nov Dec

Mn T

2014 2015

Source : MPOB

FH2015 : 7.83 MnT SH2015*: 9.97 MnT 2015*: 17.80MnT * forecast

STOCKS OF PALM OIL

34

0.00

0.50

1.00

1.50

2.00

2.50

Jan Feb Mac Apr May Jun Jul Aug Sep Oct Nov Dec

Mn T

2014 2015

Source : MPOB

Avg 2015*: 2.01 MnT. Dec 2015*: 1.97 Mn T * forecast

35

CONCLUSIONFor the FH2015, the Malaysian oil palm industry witnessed lower CPOproduction, exports and prices of palm oil products vis-à-vis FH2014.

SH2015 is expected to show recovery in CPO production and exportperformance.

CPO production in 2015 is expected to increase marginally to 19.86 Mn Tfrom 19.67 Mn T in 2014, and export of palm oil expected to be higher by2.9% to reach 17.80 Mn T from 17.31 Mn T in 2014. Marginal increase in CPOproduction and higher exports in SH2015 will drawdown stocks to below 2.0Mn T. The average price of CPO for 2015 is projected to be lower comparedto 2014.

THANK YOU

36