Malaysia MOP imports jump in April

MOP deliveries to Malaysia are accelerating from a slow start to the year, as restocking ramps up after a protracted MOP tender season. But the Covid-19 pandemic has restricted logistics, trade and food supply in Malaysia, and Argus expects a fall in MOP application overall this year, limiting any jump in 2020 imports.

January-April MOP deliveries were 526,000t, down from 553,000t, impacted by imports of just 74,000t in January, compared with 168,000t a year earlier.

But MOP deliveries to Malaysia were down by just 5pc in January-April, after being down by 23pc year on year in the first quarter. Deliveries accelerated in April to around 170,000t, from 92,000t in April 2019. Malaysia imported around 100,000t in both May and June last year, and Argus expects similar volumes for this year.

Canada exported the most MOP of any country, at 263,000t in the first four months of 2020, up by 18pc year on year. Jordan was the second-highest exporter of MOP to Malaysia, with 78,000t, up by 41pc on the year. Deliveries from Belarus and Lithuania, representing MOP from Belaruskali, were down by 54pc from 158,000t to 73,000t, while deliveries from Russia, representing Uralkali and Eurochem, were down by 51pc to 72,000t. Uzbekistan, which exported 4,550t in January-April last year, has delivered no MOP in the same period this year.

Southeast Asia was oversupplied with MOP in the first quarter, which slowed imports, including to Malaysia. Distributors reported high stocks in every country, and demand at 75-85pc of what they would expect in a typical year. But stocks in the region have to be rebuilt after the latest tender season, and palm oil prices are rising, so demand should recover in the second half of the year to levels similar to 2019.

Crude palm oil futures prices are improving plantation-owner sentiment. Front-month futures were at 2,526 ringgits/t ($591/t) as of 22 June, after reaching recent lows of 2,020 ringgits/t cfr on 12 May. The price has been broadly higher since May.

Malaysia's imports of MOP dropped to a 10-year low in 2019 to 1.13mn t, the lowest level since 2009, when MOP imports collapsed to just 642,000t in the aftermath of the global financial crisis.

By Ewan Thomson