03/04/2012 (Bernama) - The government will remain committed to improving the country's palm oil sector this year, said the Performance Management and Delivery Unit (Pemandu) in the Economic Transformation Programme (ETP) Annual Report 2011 released today.

Under the Palm Oil National Key Economic Area, Malaysia's most important commodity is expected to contribute RM178 billion to Gross National Income by 2020, with the government's focus on Eight Entry Point Projects (EPPs).

The eight EPPs have been outlined by the government with two strategic thrust which are aimed at not only ensuring the sustainability and improvement of the productivity of the upstream sector, but also the development of the downstream sector.

This year, through the Malaysian Palm Oil Board (MPOB), the government will pay attention to increasing the national Oil Extraction Rate (OER) to 21.05 per cent following the achievement recorded last year.

In 2011, the OER improved from a three year low of 19.70 per cent in January, to end with an average of 20.35 per cent. This EPP has seen a significant improvement in the OER with successful reversal of downward trends traditionally observed in two periods, February-March and June-August, the report said.

MPOB is also targeting a total of 140,000 hectares for replanting and new planting area this year in order to spur the stability of crop supply with higher average yield level of 26.2 tonnes per hectare per year by 2020.

This is expected to involve RM980 million in investments from both the private and public sector, the report said.

MPOB is likely to continue using the motorised sickle Cantas to harvest oil palm fruits to improve the productivity of workers.

The adaption of Cantas by plantation companies and smallholders over the year has tremendously improved the harvesting coverage area as well as the productivity of harvesting by at least 50 per cent.

MPOB will also identify mills with completed biogas plants that are suitable for grid connections together with Tenaga Nasional Bhd to accelerate the use of green energy in Malaysia.

This collaboration underlines the nation's commitment to renewable sources of energy from the oil palm industry, Pemandu said in the report.