Malaysian Palm Oil Export Trends: ARDL Evidence from Main and Emerging Markets

The agriculture sector of Malaysia's economy contributing 6.30% to the Gross Domestic Product (GDP) in 2024. Within this sector, agri-commodities played a significant role, contributing RM64.61 billion to the GDP, with the palm oil industry standing out as the largest contributor, accounting for nearly 36.5% (RM34.4 billion) of the agricultural GDP (Ministry of Plantation and Commodities, 2024). Malaysia is one of the world's leading producers and exporters of palm oil, after Indonesia. Malaysia's seven main palm oil export destinations are India, China, the European Union (EU), Turkey, Kenya, Pakistan, and the Philippines. All these seven markets comprise almost 62.2% (9.68 million tons) of Malaysia's total palm oil exports. However, Malaysia's palm oil export landscape is shifting, with emerging markets helping offset declines from main exporters. In 2023, exports to Central Asia rose 25.5%, driven by zero import duties and improved logistics. The MENA region accounted for 16% of total exports, supported by trade initiatives. Sub-Saharan Africa, particularly Tanzania, saw a 29% increase due to economic recovery. In the Asia-Pacific, Vietnam and South Korea recorded growth of 46.31% and 12.54% respectively, fueled by rising food sector demand and the cost advantage of palm oil. JEL Codes: Keywords: ARDL, Emerging market, Export trends, Main market and Palm oil