1. GLOBOIL INDIA 2019 A Presentation on Global Palm Oil Market DynamicsBy
Nakul Rastogi Trading Director
Pacific Inter-Link Sdn. Bhd. Kuala Lumpur
Malaysia

2. Palm Oil Production MT
Source : MPOB

3. All Figures in MT
Source : Oilworld

4. All Figures in MT
Source : Oilworld

5. % Change in Production
Production in Million MT
Source : Oilworld

6. % Change in Imports
Imports in MT
Source : Oilworld

7. BMD 3rd Month CPO in RM
Brent Crude USD per Barrel
Source : Reuters

8. CPO Local prices Average for Peninsular Malaysia in RM/MT
Source : MPOB & MPOC

9. CPO Local prices Average for Peninsular Malaysia in RM/MT
Source : MPOB & MPOC

10. MT Source : MPOB, MPOC & GAPKI
CPO Local prices Average for Peninsular Malaysia in RM/MT MT
Source : MPOB, MPOC & GAPKI

11. MT
Source : MPOB

12. Source : MPOB

13. Malaysia CPO Production Trend 2014 To 2018 and Expected 2019
2014
2015
2016
2017
2018
2019
Jan
1,508,980
1,160,687
1,129,747
1,276,849
1,586,653
1,737,461
Feb
1,277,999
1,121,628
1,042,904
1,258,539
1,342,805
1,544,518
Mar
1,497,145
1,495,151
1,219,449
1,464,021
1,573,957
1,672,058
Apr
1,555,777
1,693,425
1,301,291
1,548,026
1,558,331
1,649,368
May
1,656,970
1,810,530
1,364,583
1,654,494
1,525,405
1,671,467
Jun
1,569,788
1,763,667
1,532,613
1,514,165
1,332,704
1,518,239
9,068,673
9,047,103
7,592,603
8,718,111
8,921,873
9,795,130
46%
45%
44%
Jul
1,665,612
1,815,634
1,585,341
1,826,828
1,503,220
1,740,759
Aug
2,031,754
2,051,000
1,701,833
1,810,551
1,620,605
1,821,548
Sep
1,896,899
1,959,064
1,715,085
1,779,918
1,853,602
Oct
1,892,996
2,037,466
1,677,873
2,008,838
1,964,954
Nov
1,750,567
1,653,946
1,574,938
1,942,847
1,845,222
Dec
1,364,797
1,399,383
1,473,717
1,834,165
1,808,038
10,602,625
10,916,493
9,728,787
11,203,147
10,595,641
3,562,307
54%
55%
56%
19,671,298
19,963,596
17,321,390
19,921,258
19,517,514
13,357,437
Source : MPOB

14. Malysian CPO Production Trend 2014 To 2018 and Expected 2019
2019
Jan
1,737,461
Feb
1,544,518
Mar
1,672,058
Apr
1,649,368
May
1,671,467
Jun
1,518,239
9,795,130
46%
45%
44%
Jul
1,740,759
Aug
1,821,548
Sep
2,035,454
2,080,686
2,127,975
Oct
2,115,429
2,162,438
2,211,584
Nov
1,937,219
1,980,268
2,025,274
Dec
1,743,142
1,781,878
1,822,375
11,393,550
11,567,577
11,749,515
9,900,211
10,199,378
10,512,144
21,293,761
21,766,956
22,261,659
Final 2019
21,188,680
21,362,707
21,544,645
Source : MPOB

15. Malaysia CPO production 2014 to 2018 and Expected 2019 (MT)
2014 %
2015
2016
2017
2018
AVG %
2019
Jan
1,508,980 8%
1,160,687 6%
1,129,747 7%
1,276,849
1,586,653
6.91%
1,737,461
8.20%
Feb
1,277,999
1,121,628
1,042,904
1,258,539
1,342,805
6.27%
1,544,518
7.29%
Mar
1,497,145
1,495,151
1,219,449
1,464,021
1,573,957
7.51%
1,672,058
7.89%
Apr
1,555,777
1,693,425
1,301,291
1,548,026
1,558,331
7.93%
1,649,368
7.78%
May
1,656,970
1,810,530 9%
1,364,583
1,654,494
1,525,405
8.30%
1,671,467
Jun
1,569,788
1,763,667
1,532,613
1,514,165
1,332,704
8.02%
1,518,239
7.17%
Jul
1,665,612
1,815,634
1,585,341
1,826,828
1,503,220
8.72%
1,740,759
8.22%
Aug
2,031,754
10%
2,051,000
1,701,833
1,810,551
1,620,605
9.56%
1,821,548
8.60%
Sep
1,896,899
1,959,064
1,715,085
1,779,918
1,853,602
2,035,454
9.61%
Oct
1,892,996
2,037,466
1,677,873
2,008,838
1,964,954
9.93%
2,115,429
9.98%
Nov
1,750,567
1,653,946
1,574,938
1,942,847
1,845,222
9.10%
1,937,219
9.14%
Dec
1,364,797
1,399,383
1,473,717
1,834,165
1,808,038
8.19%
1,743,142
8.23%
19,669,284
19,961,581
17,319,374
19,919,241
19,515,496
21,186,661
Source : MPOB

16. MT Source : MPOB & SEA Dec 18 No Levy in Indon. Nov 14 7.5% & 15%
CPO Local prices Average for Peninsular Malaysia in RM/MT MT
Dec 18
No Levy in Indon.
March’18 44% & 54%
Nov % & 15%
Sept 18 0 Export tax in Mal.
Source : MPOB & SEA

17. Indonesia Biodiesel Mandatory Targets Set in Year 2015
Indonesia started Biodiesel program in Year 2006 by establishing a National Biofuel Development Team.
First biodiesel mandate through Ministry of Energy and Mineral Resource (MEMR) Bodiesel implementation by 5% from total demand of fuel transportation in 2015, 10% in 2020, and 20% in 2025.
2015 Establishment of Mandatory Targets :
Indonesia Biodiesel Mandatory Targets Set in Year 2015
Sector
Year
2016
2020
2025
Transportation, Public Service Obligation (PSO)
20%
30%
Transportation, Non-PSO
Industry
Electricity
Source: MEMR Regulation 12/2015

18. 2015 – Establishment of Palm Plantation Fund Management Agency (BPDPKS). Funds are collected from a palm oil export levy to offset price gap between biodiesel and fossil diesel.
2016 – Launch of B20 mandate in the PSO transportation sector.
September 2018, extension of B20 mandate into Non-PSO.
2018- Producers were appointed to deliver biodiesel to distribution points across the country.
Fine of IDR 6000 per liter if they are unable to deliver Biodiesel on schedule. Same penalty on fuel retailers if they sell unblended regular diesel.

19. 2018 - Biodiesel consumption increased to 3.95 billion liters.
From the BPDPKS fund collected USD 3.3 billion (IDR trillion). Through November 2018 the fund had disbursed USD1.9 billion (IDR trillion) for biodiesel incentives.
In December 2018, GOI changed the levy structure from a fixed rate to a price-based structure. Since the levy structure change went into effect, BPDPKS has not collected any levy funds.
2019-GOI set the 2019 biodiesel allocation to 6.19 billion liters for both PSO and Non-PSO.

20. 2019 consumption will likely reach 6.2 billion liters.
B30 implementation for Non-PSO transport to begin in Jan 2020.
Although CPO Fund balance can support the biodiesel mandate program throughout 2019, there is a risk of depleting the fund, should the spread increase. No funds have been collected since December 2018.
It is expected that Indonesia biodiesel production will increase to 8 billion liters in 2019 on the full expansion of B20 mandate into the non-PSO sector and continued high demand from overseas markets.
The production facilities have grown substantially and are capable of meeting B30 mandate.
Biodiesel consumption in electricity sector is limited due to the cost advantage of coal-fired power plants.

21. Indonesia, along with Argentina, are the largest exporters of biodiesel. The EU, United States and occasionally China have been their largest overseas markets.
During , exports were sharply lower than previous years mainly because the EU limited imports by imposing high duties that were overturned in 2018.
Indonesia biodiesel exports reached billion liters in 2018, jumping from 187 million liters the previous year. About half of all shipments were to EU country destinations, followed by China. Other exports destinations include Peru, India and South Korea.
Exports continued to be good in year 2019 but on 14th August 2019, The European Commission imposed countervailing duties of 8% to 18% on imports of subsidized biodiesel from Indonesia, saying the move aimed to restore a level playing field for European Union producers.
This move could again slowdown the exports to Europe.

22. Source : MEMR and GAIN Reports
All figures in Million Liters

23. Source : MEMR and GAIN Reports

24. Price Outlook
As for the prices for the reminder of this year and next year, I think prices will move in RM price band this year. For next year I think prices will be higher not only because of the lower rains in last few months (and resultant Haze) but also due to reduction in use of fertilizers by most plantations when prices were lower.
One must also keep eyes open to B30 use in Indonesia and B10 rollout in Malaysia.
Thank you and good luck.