Tuesday, June 17 2003 - THE Government wants local palm oil producersto double their per hectare crude palm oil (CPO) yield by 2020 to keep upwith competition from other edible oils.

Primary Industries Minister Datuk Seri Dr Lim Keng Yaik said Malaysianproducers should produce eight tonnes of oil per ha per year, anachievable target compared to the current 3.5 tonnes, by using new clones.

There is plenty of room for the commodity to grow because, to date, palmoil produced by Malaysia, Indonesia and other countries only accounts for20 per cent of the edible oils traded in the world market, Dr Lim said.

The world’s edible oils and fats market has a total consumption of 135million tonnes a year, of which palm oil constitutes about 30 milliontonnes.

There will always be a market for palm oil and its products becausecountries such as India needs vegetable oil which its domestic productioncannot produce enough, he said.

Dr Lim had earlier officiated at the fourth International Plantersconference.

He said Europe also used to consume one million tonnes of palm oil twoyears ago but now it needs 3.5 million tonnes.

The market is highly competitive as oils are replaceable and the marketcan change from one oil to another. Should there be a shortage in otheroils such as rapeseed, palm oil must be there to meet the shortage, headded.

Dr Lim also said that estates managed by big companies have produced up tofive million tonnes of CPO per ha a year, adding that what needs to beaddressed is individual smallholders who produce less than 3.5 tonnes peryear.

He said the smallholders are managed by the Federal Land DevelopmentAuthority, the Rubber Industry Smallholders Development Authority and theFederal Land Consolidation and Rehabilitation Authority.

The Rural Development Ministry and the Land and Cooperative Ministry mustimprove smallholders’ performance by using good agronomic practices, newhigh yielding clones and good fertilisation.

Dr Lim said based on a CPO price of RM1,500 per tonne, the smallholdershad already lost RM7.5 billion in earnings because they were unable toincrease their yield to five tonnes per ha a year.

“Malaysia’s oil palm trees planted on a 3.8 million ha can doubleproduction to 24 million tonnes by using new clones. There is need to opennew land, he said.

Dr Lim said the industry is continuously faced by various challenges suchas the palm oil smear campaign launched by the American SoyabeanAssociation in the 1980s.

Lately, the industry is accused of clearing its oil palm trees byEurope-based non-governmental organisations at the expense of the orangutans.

Even though the clearing of land takes place in Indonesia, Malaysia isinadvertently affected because uninformed exporters and consumers alsoassociate palm oil with Malaysia.

Dr Lim also said that palm oil produced by Malaysia should not competewith that of Indonesia, which is known to undercut Malaysia by sellingevery tonne of palm oil at US$10 (US$1 = RM3.80) lower.

Palm oil from both countries partly account for the 20 per cent of theworld’s traded edible oils. We still have 80 per cent more.

So, Malaysia and Indonesia should not compete with each other. I hopeefforts made towards this with our Indonesian friends at this and otherseminars in the future can foster closer cooperation, and new strategiescan be developed,” he said.

Dr Lim also called on India to lower its tariffs on palm oil because byslapping them, domestic users are using cooking oil double the pricecompared to those used in the US and Europe.

On the ban of the use of paraquat by the Agriculture Ministry’s PesticidesBoard to curb suicide cases, Dr Lim said the matter has been raised inCabinet and the board has been instructed to hold another dialogue withthe industry.

The ban was made without consulting the industry widely enough. It is notwise to ban pesticides because they are very useful in killing weedswithout killing the planted crop, he said.

On the merger of plantation companies, Dr Lim said the initiative willonly be good if the merged entity go international and use its size to itsadvantage.

If the size is too big and the management cannot control its plantationsto its advantage then the effort is of no use.

The merged entity must work out an overall management system to manageindividual estates. With the compliment in size, it can build synergies tobecome a world player in palm oil, he added.