MARKET DEVELOPMENT
Palm Oil Industry Poised For Greater Growth
Palm Oil Industry Poised For Greater Growth
18/05/2017 (The Star) - The Fourth Industrial Revolution is set to transform the palm oil industry.
Back in April 1917, Frenchman Henri Fauconnier planted the first oil palm commercially, laying down the groundwork that would for the next 100 years, grow into a vibrant industry.
It was the award-winning writer’s bid to replace an unsuccessful coffee plantation at the Tenna-maram Estate in Batang Berjuntai, now known as Bestari Jaya.
Today, Malaysia is so dominant in the palm oil industry that it accounts for 39% of world production and 44% of world exports.
It is estimated that the livelihood of some 2.5 million people depends on the industry, said Plantation Industries and Commodities Minister Datuk Seri Mah Siew Keong. It directly employs more than 570,000 people with another 290,000 people employed downstream.
The palm oil industry took off when the Federal Land Develop-ment Authority (Felda) introduced oil palm cultivation at its Taib Andak scheme in 1961 to address rural poverty by providing “land for the landless, and jobs for the jobless”, said Mah. “It lifted a few hundred thousand people out of poverty.”
Since then, the cash crop has been a source of income for many Malaysian families.
“Last year, Malaysia exported RM64.58bil worth of palm oil products,” said Mah.
Mah’s focus now as captain of the industry is on raising productivity of the estates, while taking into account the issue of limited land.
In the past, palm oil production managed to increase due to expansion of lands and the planting of new cultivated areas.
“Now, because new lands are limited, the future of palm oil expansion is through increasing yields,” Mah noted.
The yield is about 3.8 tonnes of palm oil per hectare but this has stagnated for the past 20 years. In the same period, the yield for other vegetable oils such as soybean, rapeseed and sunflower increased by 50%, said Mah.
“But research has shown that with good agricultural practices and a better system, we can actually touch 7 tonnes per hectare. This means we can increase production by close to 50% without increasing land,” said Mah.
To produce high yielding oil palms on existing lands, the Malaysian Palm Oil Board (MPOB) has gone into experimenting with tissue culture and the planting of genome select oil palm. Selective breeding means more robust, higher yielding crops and also dwarf oil palm trees which are easier to harvest.
“We hope that in six or seven years, these seedlings which are planted on a small scale by Sime Darby Plantation, will be available for commercialisation to smallholders, that’s the target,” said Mah.
Oil palm plantations accounted for about 73% or nearly 5.7 million hectares of agricultural land in Malaysia.
Other than increasing yields, Mah said water management is another way forward.
“One area we are looking at seriously and hope the industry would invest in is water management and irrigation facilities,” he said.
The El Nino phenomenon that affected Malaysia last year saw oil palm crops decrease by 16%.
“We are facing global warming and don’t know when drought will hit. We must look into investments in water irrigation and facilities. It is one very promising area,” he said.
Mah said as the country marches towards the Fourth Industrial Revolution, there is a need to ensure that big estates and smallholders are heading in the same direction.
The ministry is pushing for mechanisation of labour, innovation, and diversification of output.
“We are the champions of the world in palm oil. That is why we should further go into the industry to see how we can diversify from palm oil to pharmaceuticals, oleochemicals, better nutrition, biomass, chips, and pellets,” he said.
With mechanisation and robotisation, the future is bright, said Mah.
“So to me, the Fourth Industrial Revolution will transform the whole palm oil industry and it comes with challenges. But we will be part of the revolution,” he added.
Back in April 1917, Frenchman Henri Fauconnier planted the first oil palm commercially, laying down the groundwork that would for the next 100 years, grow into a vibrant industry.
It was the award-winning writer’s bid to replace an unsuccessful coffee plantation at the Tenna-maram Estate in Batang Berjuntai, now known as Bestari Jaya.
Today, Malaysia is so dominant in the palm oil industry that it accounts for 39% of world production and 44% of world exports.
It is estimated that the livelihood of some 2.5 million people depends on the industry, said Plantation Industries and Commodities Minister Datuk Seri Mah Siew Keong. It directly employs more than 570,000 people with another 290,000 people employed downstream.
The palm oil industry took off when the Federal Land Develop-ment Authority (Felda) introduced oil palm cultivation at its Taib Andak scheme in 1961 to address rural poverty by providing “land for the landless, and jobs for the jobless”, said Mah. “It lifted a few hundred thousand people out of poverty.”
Since then, the cash crop has been a source of income for many Malaysian families.
“Last year, Malaysia exported RM64.58bil worth of palm oil products,” said Mah.
Mah’s focus now as captain of the industry is on raising productivity of the estates, while taking into account the issue of limited land.
In the past, palm oil production managed to increase due to expansion of lands and the planting of new cultivated areas.
“Now, because new lands are limited, the future of palm oil expansion is through increasing yields,” Mah noted.
The yield is about 3.8 tonnes of palm oil per hectare but this has stagnated for the past 20 years. In the same period, the yield for other vegetable oils such as soybean, rapeseed and sunflower increased by 50%, said Mah.
“But research has shown that with good agricultural practices and a better system, we can actually touch 7 tonnes per hectare. This means we can increase production by close to 50% without increasing land,” said Mah.
To produce high yielding oil palms on existing lands, the Malaysian Palm Oil Board (MPOB) has gone into experimenting with tissue culture and the planting of genome select oil palm. Selective breeding means more robust, higher yielding crops and also dwarf oil palm trees which are easier to harvest.
“We hope that in six or seven years, these seedlings which are planted on a small scale by Sime Darby Plantation, will be available for commercialisation to smallholders, that’s the target,” said Mah.
Oil palm plantations accounted for about 73% or nearly 5.7 million hectares of agricultural land in Malaysia.
Other than increasing yields, Mah said water management is another way forward.
“One area we are looking at seriously and hope the industry would invest in is water management and irrigation facilities,” he said.
The El Nino phenomenon that affected Malaysia last year saw oil palm crops decrease by 16%.
“We are facing global warming and don’t know when drought will hit. We must look into investments in water irrigation and facilities. It is one very promising area,” he said.
Mah said as the country marches towards the Fourth Industrial Revolution, there is a need to ensure that big estates and smallholders are heading in the same direction.
The ministry is pushing for mechanisation of labour, innovation, and diversification of output.
“We are the champions of the world in palm oil. That is why we should further go into the industry to see how we can diversify from palm oil to pharmaceuticals, oleochemicals, better nutrition, biomass, chips, and pellets,” he said.
With mechanisation and robotisation, the future is bright, said Mah.
“So to me, the Fourth Industrial Revolution will transform the whole palm oil industry and it comes with challenges. But we will be part of the revolution,” he added.