Malaysia Agribusiness

Report
Executive Summary
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Malaysia Agribusiness Report

Table of contents
BMI Industry View

Published Date: 01 Jan 2016

SWOT

10

Agribusiness

10

Operational Risk

12

Industry Forecast

14

Palm Oil Outlook

14

Table: Palm Oil Production & Consumption (Malaysia 2014-2019)

15

Table: Palm Oil Production & Consumption (Malaysia 2009-2014)

23

Sugar Outlook

25

Table: Sugar Production & Consumption (Malaysia 2014-2019)

25

Table: Sugar Production & Consumption (Malaysia 2009-2014)

30

Cocoa Outlook

32

Table: Cocoa Production & Consumption (Malaysia 2013-2019)

33

Table: Cocoa Production & Consumption (Malaysia 2009-2014)

38

Livestock Outlook

39

Table: Beef Production & Consumption (Malaysia 2014-2019)

40

Table: Pork Production & Consumption (Malaysia 2014-2019)

40

Table: Poultry Production & Consumption (Malaysia 2014-2019)

40

Table: Beef Production & Consumption (Malaysia 2009-2014)

43

Table: Pork Production & Consumption (Malaysia 2009-2014)

44

Table: Poultry Production & Consumption (Malaysia 2009-2014)

44

Commodity Price Analysis

46

Monthly Grains Update

46

Commodity Strategy

50

Upstream Analysis

56

Asia GM Outlook

56

Table: Selected Countries - GM Crops Use

58

Asia Machinery Outlook

59

Table: Select Countries - Average Size Of Farms, Hectares

63

Asia Fertiliser Outlook

67

Downstream Analysis

72

Food

72

Table: Food Consumption Indicators - Historical Data & Forecasts (Malaysia 2012-2019)

74

Confectionery

74

Table: Confectionery Value/Volume Sales, Production & Trade - Historical Data & Forecasts (Malaysia 2012-2019)

75

Fish

75

Oils And Fats

76

Dairy

77

Table: Dairy Volume Sales, Production & Trade - Historical Data & Forecasts (Malaysia 2014-2019)

77

Drink

78

Hot Drinks

78

Table: Hot Drink Value/Volume Sales, Production & Trade - Historical Data & Forecasts (Malaysia 2014-2019)

79

Alcoholic Drinks

80

Table: Alcoholic Drinks Value/Volume Sales, Production & Trade - Historical Data & Forecasts (Malaysia 2014-2019)

81

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Soft Drinks

82

Table: Soft Drinks Sales, Production & Trade (Malaysia 2014-2019)

83

Mass Grocery Retail

85

Table: Mass Grocery Retail Sales By Format - Historical Data & Forecasts (Malaysia 2014-2019)

87

Table: Grocery Retail Sales By Type, Historical Data & Forecast (%)

87

Regional Overview

88

Table: Impact Of El Ni-o On Crops

92

Competitive Landscape

94

Table: Main Agribusiness Players

94

Demographic Forecast

96

Table: Population Headline Indicators (Malaysia 1990-2025)

97

Table: Key Population Ratios (Malaysia 1990-2025)

97

Table: Urban/Rural Population & Life Expectancy (Malaysia 1990-2025)

98

Table: Population By Age Group (Malaysia 1990-2025)

98

Table: Population By Age Group % (Malaysia 1990-2025)

99

Methodology

101

Industry Forecast Methodology

101

Sector-Specific Methodology

102

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Malaysia Agribusiness Report

Published Date: 01 Jan 2016

BMI View: Malaysia's agribusiness sector is experiencing challenging times, as its most emblematic sector, the
palm oil industry, is undermined by low prices and growing structural challenges. The cocoa sector is in an even worse
position, suffering a severe decline after the stellar performance of the 1990s . The cocoa processing sector is facing
increasing competition from Indonesia and is losing market share at a fast pace. The medium term outlook is brighter,
amidst strong growth prospects in the poultry sector and opportunities for value added palm based oleochemical
exports. Malaysia will have to remain ahead of its biggest competitor, Indonesia, if it s agribusiness sector is to stay
afloat. As such, the next challenge for the country resides in the economic integration of ASEAN. The ASEAN Economic
Community will present so me opportunities, for example for poultry exports. However, it also poses risks to the future
of the sugar refining sector.
Key Forecasts

Palm oil production growth to 2018/19: 8.1% to 21.8mn tonnes. Growth will be supported as companies
replant mature estates and yields improve on the back of better technology.
Poultry production growth to 2018/19: 18.2% to 1.6mn tonnes. After a decade of strong growth, we forecast
poultry meat production to grow at a moderate pace in the coming years, as rising production costs are
undermining the development of the sector. Malaysia will maintain a fragile self-sufficiency in poultry.
Cocoa consumption growth to 2019: -16.4% to 217,000 tonnes. Cocoa processing in Malaysia is on the
decline, due to the drop in domestic cocoa bean supply and increased grinding competition from Indonesia,
which has emerged as a leading processed cocoa exporter at the expense of Malaysia.
2016 BMI universe agribusiness market value: USD30.0bn, up 6.8% y-o-y, forecast to grow by 5.9% annually
from 2015 to 2019.
2016 real GDP growth: 4.5% (down from 4.7% expected in 2015, forecast to average 4.6% from 2015 to
2019).
2016 consumer price inflation: 2.9% (down from 3.1% expected in 2015, forecast to average 2.4% from 2015
to 2019).
Palm Oil, King Commodity
Malaysia - BMI Agribusiness Market Value By Commodity (% of total)

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e/f = BMI estimate/forecast. Source: FAO, BMI

Key Developments
After several years of strong production and earnings growth for palm oil producers, Malaysia's palm oil
sector is going through challenging times. Although El Nino-related dry weather and the Indonesian
'haze crisis' have sent palm oil prices higher in H215, prices remain below historical averages. Apart
from price and profitability issues, structural challenges are growing in the industry. These include growing
hurdles to plantation expansion, stagnating tree and milling yields, steady increases in production costs and
low availability of labour. In light of the downturn in the sector, palm oil companies are adjusting their
strategies towards much-needed efficiency gains. Companies will also look at acquiring small and young
plantations, leading to consolidation in the sector, as well moving into the oleochemical segment.
In November 2015, Barry Callebaut decided to cut cocoa processing capacity in Malaysia with immediate effect.
This is the latest sign that Malaysia's cocoa sector is slowly losing its shine. We have revised down our
cocoa consumption forecasts and expect grinding to remain on the decline as chocolate demand in Asia slows
and Malaysia's cocoa processing sector continues to lose market share to Indonesia.
Malaysia's sugar sector is also undergoing changes, as the government is partially liberalising prices and
has started easing restrictions on refined sugar imports. In light of limited growth prospects in the local market,
refiners are adjusting their strategies and looking towards diversification, both in terms of geography and
products. Malaysia's largest sugar refiner, MSM Malaysia, indicated it is planning to expand its upstream
activities (sugar plantations) in South East Asia and said it is in 'advanced' negotiations to acquire
two Indonesia-based firms operating in this segment.

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Malaysia Agribusiness Report

Published Date: 01 Jan 2016

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help your company or to discuss your specific information needs please contact one of our experts on
+44 (0)20 7246 5170

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