23/09/2005 BANGI (Bernama) -- Favorable weather coupled with improvedyields and increased areas of matured palms are likely to see a bumpercrop for crude palm oil (CPO) in Malaysia this year to 15.3 million tonnesfrom 13.98 million in 2004.

"Compared year-on-year, it will be a 9.5 percent increase, the highestlevel in Malaysian palm oil history," said the director general of theMalaysian Palm Oil Board (MPOB), Tan Sri Dr Yusof Basiron.

The higher production will be mainly due to higher yields in the firsthalf of 2005 as the second half year is usually seasonally lower.

In 2003, production of CPO was 13.35 million while the oil extraction rate(OER) in 2003 and 2004 was 19.75 percent and 20.03 percent respectively.

In 2004, production jumped by 4.7 percent compared with the previous year.

For 2006, Dr Yusof expects production of CPO to expand by five percent.

"We keep expanding every year, in terms of hectarage and replanting. Ournormal growth has been five percent. It is safe to have such aprojection."

The Malaysian government had encouraged the replanting of oil palm throughthe Oil Palm Replanting Incentive Scheme which started in 2001. In thosedays, the replanting initiative was basically to reduce production andimprove the CPO price which was then in the doldrums.

"Now the CPO price is already very good, all the trees replanted then arecurrently in good production and enjoying good returns," said Dr Yusof.

The allocated fund of RM200 million in 2001 for the replanting of 200,000hectares and the RM28 million to smallholders to replant 56,000 hectaresof oil palm in 2003 had been very encouraging.

At the end of 2003, RM172.2 million had already been paid for 172,188hectares of old oil palms felled under the replanting scheme.

A total of RM23.6 million had been used to pay smallholders to fell oldpalms covering 47,100 hectares.

In 2004, a total of 54,276 hectares were replanted with oil palm whileanother 26,476 hectares were new plantings.

Dr Yusof said 150,000 hectares were expected to go for replanting thisyear while another 70,000 hectares would see new plantings.

Asked whether the replanting scheme was still on, Dr Yusofsaid,"Replanting is on-going, but not sponsored by MPOB or the government(anymore). They (planters and smallholders) do it on their own accord."

The total area under oil palm cultivation in Malaysia in 2004 was 3.88million hectares, an increase of 73,287 hectares in 2003. This is expectedto rise to 3.98 million hectares at the end of 2005.

Peninsular Malaysia accounted for 56.8 percent of the total area planted.

On a state-by-state basis, Sabah still has the largest area under oil palmwith 30.1 percent of the total area, followed by Johor with 17.2 percent.

Sabah and Sarawak are expected to experience the largest increase in newoil palm areas, particularly the Interior and Eastern Regions of Sabah.

Dr Yusof said the one million hectares target under oil palm by 2010 setby the Sarawak state government was progressing well to achieve it.