New Straits Times (29/12/2025) - KUALA LUMPUR: With no room left for land expansion, productivity in Malaysia's palm oil industry must now come from technology, automation and artificial intelligence (AI), Malaysian Palm Oil Board (MPOB) said.

Director-general Datuk Dr Ahmad Parveez Ghulam Kadir said the sector can no longer rely on "business-as-usual" practices, as stricter sustainability requirements have effectively closed off any further expansion of planted areas.

This comes amid decades of structural constraints, including stagnant yields, ageing trees and chronic labour shortages, leaving the industry with little choice but to accelerate technology adoption to sustain long-term growth.

"With Malaysian Sustainable Palm Oil 2.0 and the European Union Deforestation Regulation, there is no room to open new land," he said.

"Productivity must now come from technology, mechanisation and better planting material," Parveez said in a group interview during the International Palm Oil Congress and Exhibition (PIPOC) 2025.

Malaysia's oil palm yields have remained largely flat for nearly two decades, compounded by slow replanting and a rising proportion of ageing trees.

Although crude palm oil (CPO) output may reach 19.5 million tonnes this year, Parveez said sustaining long-term growth will require fundamental change.

"Our trees are now in their fourth generation after more than 100 years of planting. Yield has stagnated, and replanting has been slow," he said.

"With no new land available, increasing productivity is the only way forward."

Higher palm oil prices in recent years have prompted plantation companies to invest more heavily in automation, particularly during the pandemic when labour shortages became acute.

As companies realised they either had to innovate or face escalating losses, many began adopting AI, drones, satellite imaging and mechanisation to manage estates more efficiently, Parveez said.

Examples include the use of satellite data by Kuala Lumpur Kepong Bhd to plan replanting, assess terrain and soil conditions, and determine suitable planting materials and fertiliser regimes.

Firms are also using drones and imaging technology to detect pests such as bagworms, mealybugs and rhinoceros beetles before they spread.

MPOB itself established the Mechanisation and Automation Research Consortium of Oil Palm in 2021 to accelerate industry-wide adoption of such technologies.

Parveez said these tools will be essential as global demand for vegetable oils continues to grow, while major producers such as Indonesia increasingly divert palm oil to non-food uses, including biodiesel mandates moving toward B50.

"If Indonesia channels more oil into non-food applications, we must be ready to fill the remaining market. But with no land expansion possible, we must optimise what we have," he said.

"This means better genetics, replanting with the right materials, and using technology to ensure every hectare is maximised."

COUNTERING NEGATIVE NARRATIVES

Malaysia's push for higher productivity also comes amid persistent negative narratives against palm oil in Western markets, particularly on deforestation and biodiversity loss.

MPOB chairman Datuk Mohamad Helmy Othman Basha said Malaysia is not suited to emulate Indonesia's approach of absorbing more palm oil into domestic consumption, as the two countries have fundamentally different market structures.

He said Indonesia's large population allows it to divert significant volumes of palm oil into biodiesel without jeopardising its export capacity, reducing almost four million tonnes from the global market when it increased its domestic blending mandates.

"Malaysia's position is different. We rely heavily on exports because our population is much smaller," he said.

Helmy also rejected claims that Malaysia's palm oil expansion has driven large-scale deforestation, saying that the crop occupies only 8.5 per cent of global oilseed farmland.

This represents about 28 million hectares, compared with 288 million hectares planted with soybean, rapeseed, sunflower and other oil crops.

Despite using a fraction of the land, palm oil accounts for 37 per cent of global vegetable oil supply.

Helmy said claims around wildlife loss also overlook the fact that palm plantations occupy just 0.6 per cent of the world's 4.8 billion hectares of land.

"Palm oil remains the most efficient and productive vegetable oil, rich in tocotrienols and vitamin E, and continues to replace petrochemical-derived ingredients in industries such as cosmetics," he added.

Read more at https://www.nst.com.my/business/economy/2025/12/1346111/no-land-left-palm-oil-bets-technology-growth