The Star (21/1/2025) - AS ONE of the world’s top palm oil producers and exporters, Malaysia has long relied on the industry as a cornerstone of its economy.

Since the 1960s, this golden crop has fuelled national growth, contributing over RM100mil in revenue in 2024 alone.

In recent years, the sector has undergone a transformative shift, emphasising sustainability, transparency and traceability as the foundation of its supply chains.

Leading this evolution is FGV Holdings Berhad, a key player in the agribusiness landscape and one of the largest producers of Crude Palm Oil (CPO) in the world.

As early as 2010, FGV became one of the first agricultural companies to achieve the Roundtable on Sustainable Palm Oil (RSPO) mill certification and made history by organising the world’s first smallholder group to secure the RSPO Fresh Fruit Bunch (FFB) certification.

On Jan 7, 2025, FGV etched another milestone in its storied journey, signing a historic Memorandum of Collaboration (MoC) with the Malaysian Palm Oil Board (MPOB).

The event, graced by Plantation and Commodities Minister Datuk Seri Johari Abdul Ghani, Felda chairman Datuk Sri Ahmad Shabery Cheek and MPOB director-general Datuk Dr Suzana Idayu Wati Osman, marked a pivotal step forward in public-private partnerships, reaffirming their shared commitment to advancing Malaysia’s palm oil sector.

FGV chairman Tan Sri Rastam Mohd Isa articulated the transformative vision behind the MoC.

“This MoC represents more than a mere symbol of collaboration. It encompasses three key pillars of transformation aimed at empowering smallholders, ensuring compliance with sustainability standards and revolutionising the palm oil industry through technological advancements,” he said.

Supporting smallholders

Smallholders, who account for 30-40% of palm oil cultivation in Malaysia, are integral to the sector’s sustainability.

A significant portion – 70% – of FGV’s Fresh Fruit Bunch (FFB) supply originates from smallholders, including Felda settlers.

“Smallholders are the true heroes of this industry, playing a vital role in sustaining the palm oil sector despite various ongoing challenges,” Rastam remarked, adding that in 2024 alone, 4.5 million metric tons of FFB procured by FGV came from independent smallholders and external suppliers.

To support these vital contributors, FGV and MPOB are launching joint initiatives to raise awareness and guide smallholders toward compliance with Malaysian Sustainable Palm Oil (MSPO) standards and the European Union Deforestation Regulation (EUDR).

As of November last year, Rastam said as many as 1,500 smallholders have participated in FGV’s sustainability awareness programmes.

“In 2025, we are committed to supporting smallholders in achieving compliance with certification standards, including EUDR, to facilitate access to premium markets, and providing technical training and guidance on best agricultural practices to boost their yields and productivity,” he added.

Compliance with these frameworks is critical, as the European Union forms 7.1% of Malaysia’s export market, and failing to meet these standards could result in substantial losses.

Improving livelihoods

The collaboration between FGV and MPOB will also introduce the “Kebun Angkat” programme, a mentorship initiative offering technical assistance and agricultural best practices to selected smallholders, helping them boost yields and competitiveness in premium markets.

The partnership’s primary aim of supporting smallholders is commendable, but its true impact shines in the opportunities it creates for them to boost productivity, ultimately elevating their standard of living and improving their livelihoods.

Through this partnership and its strategic objectives, Rastam explained, both parties will continue to reshape the future of Malaysia’s palm oil sector, strengthening both the economy and global standing.

“This is a significant step in our journey towards a sustainable and transparent palm oil industry in Malaysia.

“Aligned with FGV’s sustainability framework, we are deeply committed to uplifting the livelihoods of smallholders, who form the backbone of our nation’s palm oil industry.”

Revolutionising tech

Central to the partnership is the enhancement of digital tools like MPOB’s GeoPALM platform, which integrates geospatial data to improve transparency, compliance and efficiency.

By leveraging advanced mapping and data analysis, stakeholders can address environmental risks, optimise crop yields and meet global standards.

Additionally, MPOB’s Sawit Intelligent Management System (SIMS) will streamline regulatory compliance, reduce operational costs and enhance traceability within the palm oil supply chain, fostering greater accountability and productivity.

Brighter future for all

This collaboration represents a bold step towards a sustainable and inclusive future for Malaysia’s palm oil industry.

As Rastam concluded, “Palm oil is more than a commodity; it is a lifeline for hundreds of thousands of smallholders across the nation.

“By collaborating with MPOB, we are not only advancing traceability systems to meet global standards but also equipping smallholders with the tools and knowledge needed to thrive in an increasingly competitive market.

“Together, we are forging a more inclusive, sustainable, and resilient palm oil sector,” said Rastam, who added that the partnership strengthens not only Malaysia’s economy but her global standing as a leader in sustainable palm oil production.

Read more at https://www.thestar.com.my/news/nation/2025/01/21/fgv-mpob-redefine-malaysias-palm-oil-industry