POINTERS: Malaysian Palm Oil Industry Performance and What’s in Store for 2023

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Questions & Answers (15) :

Anthony Yap

1 year ago

May i know current export tax and local sales tax for Crude Palm Kernel Oil for Sabah and Sarawak? Thanks

Kuay

1 year ago

Can we have the breakdown of Palm Kernel to which Malaysia Ports and the Major countries of Exporting Palm Kernel to Malaysia for 2022? Thanks

Kuay

1 year ago

May i know the statistic for importation of Palm Kernel into Malaysia for 2022? Thanks

Monica

1 year ago

Which are the major exported countries Crude Palm Kernel Oil (CPKO) to Malaysia and to which Malaysia Ports?

POINTERS Secretariat:
Posted on behalf of Datuk Dr Ahmad Parveez: MPOB cannot provide the information as such information is confidential.
1 year ago

Monica

1 year ago

Can you provide the Crude Palm Kernel Oil (CPKO) importation of Malaysia in value and figures been imported 2021 vs 2022?

POINTERS Secretariat:
Posted on behalf of Datuk Dr Ahmad Parveez: For January-October 2022, exports of CPKO amounted 190,920 tonnes, lower by 69,606 tonnes (26.7%) from 260,526 tonnes recorded in January-October 2021. The decline in CPKO exports was due to a lower uptake from the European Union by 36.7% (or 61,151 tonnes) to 105,477 tonnes from 166,628 tonnes. Exports to India also decreased by 34.5% (20,741 tonnes) to 39,442 tonnes from 60,183 tonnes during the period under review. Meanwhile, export value of CPKO increased slightly by 2.1% or RM30.61 million to RM1.47 billion from RM1.44 billion earned during the same period in 2021, attributed to higher prices of palm oil products traded in the global vegetable oils market.
1 year ago

Muhammad Fahmi bin Fauzi

1 year ago

Is it possible for Malaysian Palm Oil Industry reduce the dependency on foreign labour?

POINTERS Secretariat:
Posted on behalf of Datuk Dr Ahmad Parveez: The high-dependency on foreign labour has been a longstanding issue in palm oil sector in Malaysia. The Malaysian Government has been continuously putting efforts in reducing the dependency on foreign labour in the sector. The establishment of Pusat Latihan Sawit Malaysia (Plasma) testified the Government's commitment in producing local workers specifically for oil palm plantation sector, thus help reducing dependency on foreign workers. Aside promoting this sector to the locals, efforts in improving the usage of mechanisation have also been placed. Mechanisation is one of the keys to enhance the productivity in ensuring a sustainable supply of palm oil to the world and to reduce dependency on manual labour especially foreign workers. Besides that, the higher adoption of mechanisation and automation in the oil palm plantations would encourage local workers to join the plantations as it helps ease the burden on workers.
1 year ago

muhammad orlando

1 year ago

It seems that the large market drivers have also a problem to adopt latest technologies that will give higher yield for their production. Reason being due to their tight schedule for supply and heavy industrial machinery which may not enable them to make any modifications especially for refiners, The new back equipment can help with rapid quality test compare to the conventional. The reason being is maybe they cannot have any disruption in the production flow, if they are to meet their deadlines schedule. In addition to this, the 3MCPD contaminant factor, which tends to create rumors on the health aspect for consumers. For smaller scale refineries are able to adapt to this changes as they have the flexibility and and compatible machinery lines, and their machineries are upgradable for modifications and inclusion of new technolgies. The cost to unisntall the large machinery is too high, then to reinstall and commissioning will also disrupt their supply flow hence the global supply for the global consumer market, can the midrange refineries be given any support to penetrate the market? They do not compete with the giants, but also have many solutions that they can offer to buyers and distributors from the international market segment. Solutions we are talking about are in relations to Sustainable Best Practices. As sustainability has not fixed definition, it is rather a voluntary act to carry out business activities with focus on the socioeconomic and environmental factor, these solutions give us the upper hand to compete especially in the fragmented market segment of the palm oil industry. Maybe we at the SME level can get the same kind of support as the smallholders in the plantation sector gets. We can also work together with them as the production range are the same. Which can actually leave the large drivers to continue their focus to lead the export sector as the largest exporter around the globe. The reason we ask is that we have done our feasibilities studies from researches carried your esteemed organization recognized experts and compiled into finding solutions for market penetration whilst support to improvise on the MSPO and RSPO certified requirements. We hope that MPOB can look into our welfare and support mid-level refiners as we know that small refining line are not permitted to continue, we also would like to suggest your quick consideration into supporting this level because we are also subjected to meet the same standards of distribution from the quality performance of our finished products and help reduce cost for distribution tremendously, energy cost, tremendous reduction of GHG emissions and reduce waste tremendously if given the opportunity to be inclusive in our countries' agriculture no.1 GDP contributor.

POINTERS Secretariat:
Posted on behalf of Datuk Dr Ahmad Parveez: Nearly RM50 million have been allocated for the development of palm-based value-added food and feed products by the small and medium enterprises (SME) in the 11th and 12th Malaysia Plan (RMK-11 and RMK-12). This fund has benefitted ten (10) small and medium enterprises (SMEs) in the RMK-11 and expected to assist another ten (10) SMEs in the RMK-12. The High Impact Development Project Grant provided under the RMK10 & 11 has also successfully attracted some oleochemical companies to produce oleo derivatives instead of concentrating on basic oleochemicals. Some small medium sized enterprises (SMEs) also benefitted from this programme and produce oleochemical downstream products. Product marketing capital fund incentives in the form of advertising and certification were also offered to eligible SMEs. The MSPO Incentive Fund is also extended to processing factories, apart from plantation smallholders (private and organized). A total of 30% is reduced from the audit cost estimated at approximately RM3,600/unit. MPOB continues to assist in terms of financing and business knowledge to smallholders especially through cooperative structure to commercialise suitable downstream products. For SMEs, the strategies include develop technology based on industry or market needs and demand; impose Technology Readiness Level (TRL) standard for each technology produced; collaborate to develop technology with industry players; set new commercialisation strategy; provide commercialisation grant or assist in getting funding from the agencies which provides grant such as SME Corp, MOSTI, MTDC, etc; produce a product that can replace the existing material using palm-based material; promote palm-based technology to the targeted SME's; and have more engagement with SME's through collaboration with SME Corp.
1 year ago

MEGAT SYAZWAN SHAH

1 year ago

Good day Datuk, As an industry player, I believe our production could be better if we have enough supply of workers if not suitable machine. I believe MPOB has mechanization in the R&D pipelines. When can we actually implement this fully in our plantations? To date i haven't see any suitable machines to do harvesting especially for mature palm-tree

POINTERS Secretariat:
Posted on behalf of Datuk Dr Ahmad Parveez: The issue of the rapid increase of foreign workers in oil palm plantations has been debated for decades. However, due to the labour-intensive nature of the oil palm plantations, the employment of foreign workers is unavoidable. This issue was further aggravated when the Covid-19 pandemic affected people movement globally and reduced foreign workers supply to plantations. Despite the high dependency on foreign workers, MPOB has been continuously finding ways to innovate and attract locals to participate in this industry. One of the strategies to overcome labour shortage in plantations is through mechanisation. In this regard, MPOB has consistently focused on research and collaborations to develop new inventions, many of which have been commercialised. MPOB develops and innovates various type of machines used for collection, harvesting and maintenance activities in plantations. Inventions such as the Grabber, harvesting tools (Cantas and Cantas Electro), Motorcycle Trailer, Hybrid Powered Sprayer, and FFB Mobile Lifter have been commercialised and some have been adopted well in the plantation environment while others have been tested, modified, or are awaiting potential users. Mechanising harvesting operation remains a great challenge for the industry, especially for tall palms. MPOB is currently embarking efforts on high-tech R&D projects. These include laser technology, ultrasonic transducers, radio coordinating (RC), robotics, exploring advanced materials, and various harvesting technologies. With expertise and resources from both MPOB and the industry, this collaboration will contribute to further advances in research and enhance the technologies in mechanisation. In terms of timeline, we have developed a roadmap for short (1-3 years), medium (3-5 years) and long-term (more than 5 years) strategies to develop efficient and economically viable technologies for oil palm fruit harvesting.
1 year ago

WONG YQ

1 year ago

Thank you for the fruitful summary on overall palm oil performance. Any latest update India 's oil palm plantation planting performance? Since they are the top importing palm oil country, will they reduce the importation in next few years ?

POINTERS Secretariat:
Posted on behalf of Datuk Dr Ahmad Parveez: India is the largest importer of oils and fats in 2021. The country totally depending on import to meet more than 60% of its annual need. Based on statistic from Oil World, in 2021, India produced 300,000 tonnes of palm oil, higher by 7.1% from 280,000 tonnes attained in 2020. As a result of the low production, the country still depends on import to fulfil the higher domestic demand. In 2021, India imported 8.51 million tonnes of palm oil, increased by 13.2% from 7.51 tonnes in 2020. In order to overcome the higher import of vegetable oils, India’s National Mission on Edible Oils - Oil Palm (NMEO-OP) policy set a target of 1 million hectares of oil palm plantation by 2025/26 and 2.79 million hectares by 2029/2030.For the fiscal year 2021/2022, approximately 350,000 hectares were under oil palm cultivation, with an annual production of approximately 300,000 tonnes of Crude Palm Oil (CPO). CPO production in India is projected to reach 1.12 million tonnes by 2025-2026 and 2.8 million tonnes by 2029-2030. According to Trade Promotion Council of India, import of vegetable oils is projected to reach 20 million tonnes by 2030, given India’s increasing disposable income and shifting food habits. India is expected to continue importing large quantities of vegetable oils, including palm oil in the coming years. The success of their NMEO-OP policy will determine how this affects our exports to the country in the future.
1 year ago

kwyap

1 year ago

Datuk Dr. Ahmad Parveez Hj. Ghulam Kadir, Malaysia has been still relying on same downstream sectors to take up CPO supply. What are the new initiatives by MPOB or Government to set up new downstream industries , for example the bio jet fuel and others ?

POINTERS Secretariat:
Posted on behalf of Datuk Dr Ahmad Parveez : The Government continues to promote its downstream industry investment program by putting in place various incentives such as tax holiday, exploring new markets through G-to-G bilateral negotiation, or even providing matching grant if necessary. The strategy is to provide a grant with a maximum level of 40% of the total project cost for eligible Malaysian companies to build a palm-based phytonutrient products factory. This is parallel to increase production as well as exportation of high-value-added palm-based products at the international level. There should be the focus on enhanced commercialisation on high value-added products such as palm-based designer fats and nutraceutical supplements which are being developed for various food applications and functionalities. An interspecific hybrid species of oil palm (Elaeis oleifera x Elaeis guineensis) dubbed 'tropical equivalent of olive oil' containing a high percentage of oleic acid, carotenes and tocochromanols which has favourable effects on cardiovascular health could be the new oil that the industry could focus on, particularly for functional foods. The downstream sector is also encouraged to move towards palm-based animal feed to reduce the dependency on imported expensive raw ingredients for poultry feed production as well as to increase utilisation of oil palm-based products in the poultry feed industry. MPOB, through its Advanced Oleochemical Technology Division, focuses on research to produce more downstream products than basic oleochemicals. MPOB has also provided a one-stop centre such as pilot plant facilities and international quality analyses and quality labs to help SME companies and industry which are interested in investing in downstream palm products. MPOB also provides technical advisory services to ensure technology transferred to SMEs or industry is successfully commercialized. Another prospective market for palm biofuel is hydrotreated vegetable oil (HVO), as there are rising demands in various nations, including Europe. In addition to the other palm oil products, it can be manufactured using our waste and off-spec oils or by-products that support the industry's holistic waste-to-wealth approach (CPO, RBD palm olein or RBD palm stearin). The HVO is capable of producing Sustainable Aviation Fuels (SAF), also referred to as biojet fuels. CPO has been listed as one of the eligible feedstocks for sustainable aviation fuel production under the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), which carbon dioxide emission values depend on whether biogas is captured. In this regard, MPOB has also been working with potential producers of biojet fuel and encouraging the use of CPO as one of the feedstock mixes. Converting CPO into other green products, such as lubricant base oil and other high-value products, is also in the pipeline. With the support from the industry, we believe we could expand more usage of CPO in the future.
1 year ago

HCLeow

1 year ago

Dear Datuk Dr. Ahmad Parveez Since the uplift on the temporary suspension of foreign workers hiring, how many workers have arrived Malaysia as at end-Oct 2022? How many workers are expected to arrived in total for 2022? The approval of 30k plus workers given for palm oil sector, are these only for Pen Msia or include Sabah & Sarawak as well? Does MPOB track the application of fertiliser for the sector? How is the application like since 2018? thank you.

POINTERS Secretariat:
Posted on behalf of Datuk Dr Ahmad Parveez : Matters related to the intake of foreign workers are under the purview of the Ministry of Human Resources (MOHR), thus, MPOB has no information on foreign workers hiring. In relation to fertilizer application, based on the monitoring of fertilizer prices and estates’ spending on fertilizer input, it was found that fertilizer application was reduced significantly in 2019 as compared to 2018, mainly due to low CPO prices. The situation had shown no improvement in 2020. However, in 2021, the high CPO prices have motivated estates to significantly increased their fertilizer application as compared to 2019 and 2020.
1 year ago

VS LEE

1 year ago

Does Malaysia government has any Strategic Palm Oil Reserve that works to stabilize supply and prices? It is similar to the US Strategic Petroleum Reserve where it releases supply in time of high prices and builds reserve at lower prices?

POINTERS Secretariat:
Posted on behalf of Datuk Dr Ahmad Parveez : Malaysia does not have strategic palm oil reserve similar to the US Strategic Petroleum Reserve. The nature of edible oils including palm oil which deteriorate over time, inhibits the implementation of strategic reserve to provide effective control over supply and demand. Being a perennial crop, oil palm will continuously produce fresh fruit bunches (FFB) that need to be harvested and processed immediately into crude palm oil (CPO) to prevent degradation of fruits that leads to poor quality of CPO produced. Prolonged storage of CPO will only deteriorate the quality further, raising food safety and food quality concerns. Therefore, until the industry has the technology to address such issues, the idea of strategic palm oil reserve for price control may not be workable.
1 year ago

George Teh

1 year ago

YB Datuk Could you please enlighten on an interesting phenomenon: Palm oil millers processed higher FFB hence raising CPO production (slide #12), but Jan-Sep 2022 OER is lower due to lower proportion of ripe FFB processed by the millers. I suspect this was motivated by market price, is this the underlying reasons? Do you see this phenomenon becoming the new normal? Is it a healthy development? Thank you.

POINTERS Secretariat:
Posted on behalf of Datuk Dr Ahmad Parveez : The OER performance is mainly influenced by the quality of fresh fruit bunches (FFB) processed by palm oil mills. The quality bunches refer to FFB that is of good quality and has a high oil content, which is normally found in ripe FFB. During January - September 2022, the OER performance declined due to a lower proportion of ripe FFB processed by the millers. Market price is believed not to be the significant driving factor to the event. It is believed that this phenomenon is primarily driven by the issue of acute labour shortage which affect the harvesting round of the oil palm plantation which ultimately result in higher proportion of overripe, underripe and unripe FFB sent to and then processed by palm oil mill. This situation is expected to improve as labour situation in the oil palm plantation is now improving.
1 year ago

JENNY FOO

1 year ago

Y.Bhg.Datuk, Malaysia is losing market share of palm oil to Indonesia (powerpoint 26) globally. As the custodian of Malaysian palm oll industry, what are the strategies and plans to counter this? Thank you.

POINTERS Secretariat:
Posted on behalf of Datuk Dr Ahmad Parveez : Malaysia is losing market share to Indonesia because Malaysia is unable to meet the increasing market demand as production has stagnated between 17.0-19.9 million tonnes per year while world palm oil demand has increased from 46.41 million tonnes in 2010 to 76.62 million tonnes in 2021, up by 65.0%. Accordingly, the additional demand has been fulfilled by Indonesian palm oil resulting in lower Malaysian palm oil market share. In terms of quantity, Malaysia does not have competitiveness issues in exporting its palm oil globally and always maintains healthy palm oil stocks. The Malaysian palm oil industry has always been adhering to requirements of importing countries. As such, the country is committed to produce sustainable palm oil that meets the international and national standards and legislation. The Malaysian Sustainable Palm Oil (MSPO) certification scheme that has been made mandatory is implementing 3P sustainability principle of enhancing the balance between People, Planet and Profit. Through MSPO, continuous improvements have been made via structured sustainability practices. The implementation of MSPO scheme which has strengthened the traceability of palm oil along the supply chain has increased the confidence of the international consumers towards Malaysian palm oil and further enhance the acceptance of Malaysian palm oil in the global market, as well as building trust in local industry players. The newly revised version of MSPO standard namely MSPO 2.0 has addressed the fundamental concerns challenging Malaysian palm oil business. The most notable amendments namely include introducing the cut-off date to exclude deforested land from being certified, high conservation value, social impact assessment, greenhouse gas (GHG) calculator, addressing forced and child labour issues and implementation of triangular employment arrangement. The MSPO 2.0, with enhanced standards, supports the Sustainable Development Goals (SDG) 2030 as well as addressing the challenges facing by Malaysian palm oil industry. The scheme also addresses the anti-palm oil campaigns by non-governmental organisations on food safety issue, the management of Malaysian oil palm plantations as well as negative perceptions on environment and labour treatment.
1 year ago

sharath T

1 year ago

Why MPOB FFB Yield does not match CPO production/ Planted Area (general formula for yield) ?

POINTERS Secretariat:
Posted on behalf of Datuk Dr Ahmad Parveez : The FFB yield published by MPOB refers to the average FFB yield of oil palm estates in Malaysia, sourced from monthly reporting by MPOB’s estate licensees. In this regard, MPOB does not use the formula of CPO production divided by planted area, as it does not represent FFB yield. The monthly estate’s FFB yield data published by MPOB are computed using the total monthly estate’s FFB productions divided by the total harvested areas of the estate. Meanwhile, for annual data on the estate’s FFB yield, it was derived from the accumulation of the estate’s monthly FFB yield during January to December of the particular year.
1 year ago