In response to COVID-19 the government introduced its Movement Control Order (MCO) on 17 March, which had a significant impact on consumer movements, while also limiting foodservice to takeaway. Although restrictions were eased in May with the introduction Conditional Movement Control Order (CMCO) social distancing and the mandatory wearing of masks remains in place at the time of writing.
Palm oil dominates sales of edible oils in Malaysia, with the country being the second-largest producer of palm oil in the world. Local manufacturers can produce palm oil at a low cost thanks to government subsidies, with this resulting in palm oil being by far the cheapest option in terms of edible oils.
Due to its high price olive oil remains one of the smaller categories within edible oils. Nevertheless, with COVID-19 pushing consumers to focus more on health and wellness the demand for olive oil has spiked in 2020.
As restrictions are lifted and foodservice outlets begin to return to operate again it is likely that the dynamic growth seen in 2020 will stabilise to similar levels seen during the review period. Many consumers will be keen to eat out again once this is permitted, which will likely result in a slight drop in home cooking as compared to 2020.
Concerned by a potential second wave of COVID-19, some key export markets for palm oil such as India, China and the EU have started buying up stocks of Malaysian palm oil, with exports exceeding production. The decision to exempt palm oil from export tax has also made Malaysian palm oil more competitive with rival Indonesian palm oil, which should continue to drive demand in the export market.
While palm oil is set to retain its dominant position, among mid- and high-income households there is expected to be a growing demand for olive oil. COVID-19 has served to place an even greater focus on the importance of a healthy diet and this should benefit olive oil which is known for a range of health benefits.
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Understand the latest market trends and future growth opportunities for the Edible Oils industry in Malaysia with research from Euromonitor International's team of in-country analysts – experts by industry and geographic specialisation.
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This report originates from Passport, our Edible Oils research and analysis database.
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