29/09/2012 (Bernama) - Malaysia's crude palm oil (CPO) output this year will fall by 2.5 per cent to 18.44 million tonnes from 18.91 million tonnes last year despite an increase in planted and matured areas.

Palm kernel oil production is expected to decline by three per cent to 2.08 million tonnes from 2.15 million tonnes in 2011, according to the 2012/2013 Economic Report released by the Ministry of Finance.

The areas planted with oil palm in Malaysia are estimated to grow to 5.11 million hectares this year, up from five million hectares last year, it said.

The matured areas are expected to grow to 4.38 million ha from 4.28 million ha last year, but fresh fruit bunches yield is estimated to drop to 18 tonnes per ha compared with 19.7 tonnes previously, it said.

The report said as at end-June, 117,806 ha of low-yielding oil palm areas have been planted.

The government's objective is to replant 365,414 ha of low-yielding oil palm areas by plantation companies and smallholders across Malaysia within three years.

On rubber, the report said, the planted areas are expected to expand to 1.03 million ha this year from 1.02 million ha in 2011, following the opening of new areas in Sabah and Sarawak.

It said total production will reach one million tonnes from 996,000 tonnes last year.

To ensure adequate supply of rubber and latex for downstream activities, the government has embarked on replanting programmes to expand rubber planted areas to 1.2 million ha by 2020, said the report.

Towards this end, 40,000 ha will be replanted annually and to further support rubber production by smallholders, the annual replanting grant per ha has been increased to RM9,230 in Peninsular Malaysia, RM13,500 in Sarawak and RM14,000 in Sabah, it said.