POINTERS 2014 MPOC
Palm Oil Internet Seminar
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ASSESSING 2022: MANAGING OPPORTUNITIES AND RISKS:
Malaysian Palm Oil Industry Outlook and Performance
By: Datuk Dr. Ahmad Parveez Hj. Ghulam Kadir

Datuk Dr. Ahmad Parveez is currently the Director General of Malaysian Palm Oil Board (MPOB). He was appointed as Fellow of Academy Science Malaysia in 2016 and Member of National Biosafety Board (2018 – 2022). In July 2021, he was appointed as a Member of the Science Council of Malaysian Agricultural Research & Development Institute (MARDI). He sits on various other Boards; Board of Trustee of Malaysian Palm Oil Council (MPOC, 2019 -2022), Board of Trustee of Malaysian Palm Oil Certification Council (MPOCC, 2019 - 2023) and Board of Trustee of Institute of Malaysian Plantation and Commodities (IMPAC). Datuk Dr. Ahmad Parveez was previously the Chairman of Genetic Modification Advisory Committee under the National Biosafety Board (GMAC, 2010 – 2018). Recently, Datuk Dr. Ahmad Parveez was appointed as an Adjunct Professor in the Department of Biological and Agricultural Engineering, Faculty of Engineering, University Putra Malaysia (UPM). He is also very active in various professional societies including as the President of International Society for Oil Palm Breeders (ISOPB), Chairperson for the Asian Section of American Oil Chemists’ Society (AOCS) and Board Member of The International Society of Biocatalysis and Agricultural Biotechnology (ISBAB).

Datuk Dr. Ahmad Parveez was born in Taiping, Perak and obtained his secondary education at Sekolah Menengah King Edward VII, Taiping. He graduated with Bachelor of Science (UKM) in Genetics, Master of Science (UKM) in Molecular Genetics and a PhD (UPM) in Plant Genetic Engineering. He has 32 years of experience in Plant Molecular Biology, Genetic Engineering and Biosafety. He developed world first transgenic oil palm in 1997. His interest is in genetic modification of oil palm, biosafety of living modified organisms and oil palm sustainability.

He has obtained a number of prestigious awards both locally and internationally. He has 17 patents filed and six of them have been granted. He has authored and co-authored almost 100 papers in refereed journals and more than 250 conference papers.


VIEW PROFILE
The Malaysian palm oil industry experienced mixed performance in 2021. CPO production declined by 5.3% to 18.12 million tonnes as against 19.14 million tonnes in 2020. The slowdown in CPO production has limited the capacity of the country to export palm oil and other palm-based products despite stable demand from importing countries. Subsequently, exports of palm oil down by 10.5% to 15.57 million tonnes from 17.39 million tonnes in 2020. This supply-demand disparity has caused palm oil stocks in the first seven months of 2021 to be lower as compared to the corresponding period in 2020. However, the improvement in CPO production in the fourth quarter of 2021 has witnessed the closing stocks for December 2021 stood higher by 26.8% to 1.61 million tonnes vis-à-vis 1.27 million tonnes in December 2020. The low supply situation arising from the low CPO production in 2021, coupled with other contributing factors have led the CPO price in 2021 to reach the highest record in the palm oil history. Oil palm products were traded higher in 2021 as against 2020 with local CPO price increased by 64.1% to RM4,407.00 per tonne as compared to RM2,685.50 per tonne in 2020. The record high prices have also influenced total export revenue to reach the highest level despite lower exports. Total export revenue of palm products increased by 48.0% to RM108.52 billion from RM73.33 billion in 2020. With the improved Malaysian palm oil industry performance especially towards the end of 2021, the year 2022 is expected to bring a brighter prospect for the Malaysian palm oil industry primarily driven by the expected stable palm oil prices and better palm oil production and demand to keep the high export revenue for the palm oil industry in 2022.


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Questions & Answers (8) :
Logan Toh
3 months ago
Dear Datuk, Due to the sustainability issues, we are no longer allowed to clear new area for palm oil planting starting year 2018 and thus this means that the planted area for palm oil will not be increasing much starting 2018. Besides, the old palm tree will need to go into replanting cycle as well after a cycle. In the case when old palm tree go into replanting cycle and there is no new planted area to cover up the loss in production from these old palm tree, will this cause the shortage on global palm oil supply since the demand for palm oil had been increasing recently? Is this possible to happen in the near term?
MOHD RAFIZAN BIN SAMIAN
3 months ago
Dear Datuk, I'm not sure if my question is posted on the correct platform. However, I would appreciate your input on this. The labor issue is still haunting planters and mechanisation is one of the ways out. Would MPOB suggest to the government to introduce any scheme of incentives to assist planters in transitioning to gear and tyre?
POINTERS Secretariat:
In gearing up mechanisation and automation adoption in oil palm plantation, Government through MPIC and MPOB had established Mechanisation and Automation Research Consortium for Oil Palm (MARCOP). The main objective of MARCOP is to produce a technical and economic viable technology, especially in the harvesting of fresh fruit bunch that could be adopted by the industry. MARCOP is funded through a government contribution of RM 30 million and a matching fund from a special cess collection from the industry amounted to another RM 30 million. The MARCOP is led by an industry representative and comprised of government agencies like MPIC, MoF, MOSTI, MITI and as well MPOB. It is anticipated that the main outcome of MARCOP could be realised within the targeted time frame of up to 5-years.
3 months ago
Peng Kong Law
3 months ago
Dear Datuk, For the first time, the oil palm area is decreasing based on your presentation. The area is 100,000 hectares which is a large area. Can you please enlighten us on:- 1) This large drop in area has been converted to what type of land use? 2) OR the large drop in area is a reflection of the oil palm area obtained by more accurate mapping (area count) and there was no really large conversion of oil palm to other land use. Thanks.
POINTERS Secretariat:
The decline in planted areas in 2021 was mainly due to MPOB’s data clearance on smallholder’s area.
3 months ago
HCLeow
3 months ago
Dear Datuk, The dropped in the oil palm planted areas in 2021 due mainly to replanting or losing more land for other purposes such as infra and property projects? What was the replanted areas fr 2021? 2022 production forecast of 19.0m tonnes has this take into consideration of the late arrival of new workers? thank you.
POINTERS Secretariat:
The decline in planted areas in 2021 was mainly due to MPOB’s data clearance on smallholder’s area. The replanted oil palm area in 2021 was at 0.11 million hectares. The 2022 CPO production forecast of 19 million tonnes already took into consideration the arrival of foreign workers in the second half of the year.
3 months ago
Raymond Cheow
3 months ago
With lower palm oil production and its derivatives in 2021, the country generated a much higher revenue. Isn't it a given and proven economic sense to focus and maintain the growth of the present less than 6 mil sustainable hectarage in the country , further expansion into peatlands and possible deforestation will not only alarm the green activists but also affects our country in achieving UN climate change goals ?
POINTERS Secretariat:
Malaysia is ensuring that our palm oil activities are in-line with the UN sustainable development goals. As such, Malaysia committed to adhere to its pledge in preserving its forest by not converting it into oil palm cultivation. Malaysia is not focusing on the area expansion, indeed the oil palm planted area has been plateaued. With the limited area for oil palm cultivation, Malaysia is now concentrating on improving its oil palm productivity through high yielding planting materials and better oil palm management.
3 months ago
Raymond Cheow:
Great...Research shows that expansion of industrial plantations and forest loss is closely correlated with palm oil prices.
3 months ago
William Yap
3 months ago
Dear Datuk Dr. Ahmad Parveez, As we have seen the positive performances of most areas including export volumes , export revenues, CPO prices and production stocks, however the yield of FFB per hectare are in decreasing trend, what are the main factor/s contributing to this and how to overcome this decline when the cpo price moderates.
POINTERS Secretariat:
The low FFB yield in 2021 was mainly due to the labour shortage arising from the temporary suspension of foreign workers recruitment so as to contain the spread of COVID-19. The suspension has significantly affected the FFB production since the FFB harvesting activity is dominated by foreign workers. In addressing this issue, the Malaysian Government have engaged with several source countries in the efforts to bring in foreign workers to the oil palm plantation sector. In reducing the dependency on foreign workers, the Malaysian Government had established a Mechanisation and Automation Research Consortium of Oil Palm (MARCOP) to produce a technical and economic viable technology, especially in the harvesting of fresh fruit bunch that can enhance the work process in the oil palm plantation, thus increasing the FFB productivity.
3 months ago
VS LEE
3 months ago
Dear Datuk, The cost of managing an oil palm plantation has risen rapidly ranging from workers' pay, compliance cost, fertilizer to herbicide costs. Such costs increase are absorbed seamlessly due to current high CPO prices. However, when CPO production increases towards the peak season, prices would normally soften. Besides the additional foreign workers coming in, what are the other measures mooted to help to lower the production cost? Thank you.
POINTERS Secretariat:
For the workers’ pay, MPOB foresee that the arrival of foreign workers after the temporary suspension in 2020 and 2021 is expected to soften the cost for workers as the bargaining power of the workers reduce in view of the improvement in the labour supply. Meanwhile for the fertilizer cost, MPOB expect that the current high crude oil prices which is the main input for fertilizer production is not going to sustain and are expected to revert the normal average level. Thus, MPOB is expecting the similar trend would apply for the fertilizer price. In managing the rising cost of production, plantation players should re-strategize its financial management including reviewing their capital expenditure and focusing on the item that will directly improve the productivity of the company.
3 months ago
George Teh
3 months ago
Dear Datuk Dr. Ahmad Parveez It's encouraging to see that you have forecast all-round increases in 2022 across production, stock, and export metrics. However, I'm curious if you could explain the drivers behind this optimism, as the only positive driver seem to be OER improvement, but OER improvement appears marginal in comparison to decreases in planted area and FFB yield. Thank you.
POINTERS Secretariat:
The driving force behind the optimism is the expected recovery in CPO production driven by the improvement in FFB yield. MPOB foresee that FFB yield to recover on the basis that the labour situation going to be improved later this year. This will consequently help to improve the current tight palm oil stock level, hence, provide greater capacity for Malaysia to export. With palm oil demand is expected to remain strong, especially from major importing countries, palm oil exports are expected to recover.
3 months ago
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