6/3/07 (Bernama) - UNITED Plantations Bhd (UPB) aims to exceed its yield target of 6 tonnes of crude palm oil (CPO) per hectare this year, after touching 5.9 tonnes previously.

Its vice chairman/executive director, Carl Bek-Nielsen, said the company is looking at increasing its yield by an average of 1.5 per cent yearly because it is difficult to make drastic changes overnight in the agricultural industry.

He said land, which is becoming scarce in Malaysia, is of great value nowadays and palm oil firms have to focus more diligently on increasing yields in existing areas to boost earnings.

"Malaysia can do a lot because our average CPO yield is only around 3.85 tonnes per hectare per year," he said in an interview.

"If the Malaysian industry just increases its yield by an average of 0.5 tonne per hectare, or around 11-12 per cent, that will result in Malaysia producing an extra 1.9 million tonnes of CPO in the same area, and that will actually add up to more than RM3.5 billion extra for the government," said Bek- Nielsen.

He said there is no doubt prices of local commodities, whether palm oil or timber, are going to remain firm in 2007.

"The estimates will be that it is going to be another robust and strong growth within the commodity sector of Malaysia.

"Plantations are going to have a favourable year, particularly so when you look at the outlook of prices going forward, most indications appear to be in favour of more bullish prices, and that will definitely going to be more beneficial to the plantation sector, in particular the palm oil sector," he said.

Bek-Nielsen said UPB will continue to focus on increasing its yields, primarily via disciplined management and better planting materials, coupled with improved agricultural and sustainable practices.

"Planting materials are the key here. Oil palm 20 years ago may have given yield of 26-27 tonnes of fresh fruit bunches (FFB) per hectare and maybe oil extraction rate of 19-20 per cent.

"But the existing materials which are available in the market will give a yield in excess of 30 tonnes of FFB per hectare per year, and with oil extraction rate of 23-24 per cent," he said. - Bernama