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My Say: The AI revolution can transform the palm oil industry
calendar09-06-2025 | linkThe Edge Malaysia | Share This Post:

07/06/2025 (The Edge Malaysia), For decades, the palm oil industry has been perceived as a traditional, labour-intensive sector. However, the global push for sustainability, cost efficiency and technological progress is forcing a long overdue transformation. The question is no longer whether automation should play a role in palm oil, but how fast we are willing to implement it.

Breaking the mould — AI meets palm oil

Historically, the words “palm oil” and “technology” have rarely appeared in the same sentence. The industry, rooted in manual labour and conventional processing, has faced persistent challenges including labour shortages, rising operational costs, inefficiencies and environmental scrutiny. Artificial intelligence (AI) and automation now present an opportunity to rethink the way the industry operates.

Malaysia, as the world’s second-largest palm oil producer, responsible for nearly 30% of global exports, is uniquely positioned to lead this change. With more than 450 mills operating nationwide, the integration of intelligent automation could result in significant annual savings by improving efficiency, reducing dependence on manual labour and optimising resource use.

Recent examples of AI-powered control systems, predictive maintenance tools and advanced sensors are already demonstrating how these technologies can streamline processing, enhance real-time monitoring and reduce energy consumption while boosting productivity.

Moving towards smart, sustainable mills

One of the most pressing challenges facing the sector is its reliance on foreign labour, a model that is becoming increasingly unsustainable amid tightening regulations and rising wages. Early outcomes from AI-integrated facilities suggest that workforce requirements can be reduced by as much as a third. In fact, automation has already shown the potential to reduce labour needs by 33%, resulting in annual wage savings of RM1.1 million and annual operational cost reductions of RM1.6 million at certain mills.

These developments are not solely about economic benefits. They also pave the way for a more resilient and sustainable system that meets both global expectations and local needs.

Beyond efficiency — AI’s role in sustainability

Sustainability has long been a contentious issue for the palm oil sector. While progress has been made through certification schemes, AI offers a more robust and transparent approach to meeting environmental goals.

Smart systems, equipped with sensors and machine learning capabilities, can monitor fresh fruit bunch volumes, detect anomalies and improve processing efficiency. Predictive maintenance helps reduce machinery downtime, which in turn cuts down on energy use and greenhouse gas emissions.

These are not just technical upgrades. They reflect a broader shift towards responsible production and offer Malaysia a chance to redefine its global image in the sector.

The collective responsibility to advance

Despite the promise, AI adoption across the industry remains limited. Many stakeholders still view it as costly or disruptive. However, mounting evidence suggests that automation, when implemented strategically, delivers long-term cost savings, improves competitiveness and reduces vulnerability to labour constraints.

Wider adoption will require a collective effort. This includes supportive government policies, industry-led initiatives and platforms that encourage knowledge sharing and collaboration.

Looking to the future

Malaysia is not alone in pursuing digital transformation in palm oil. Other major producers such as Indonesia, Thailand, Colombia and Nigeria are also exploring AI-based solutions. The race is now on to set the global benchmark for smart and sustainable production.

Malaysia has the potential to lead. By accelerating AI integration, the country can not only strengthen its market position but also shape the future of palm oil as an industry rooted in innovation, sustainability and resilience.

Technology and tradition may once have appeared to be at odds. Today, they are proving to be the ideal partnership for an industry ready to evolve.

https://theedgemalaysia.com/node/757684