Malaysian palm oil yields on alarming downtrend — expert

KUALA LUMPUR: Malaysian palm oil yields have been on an alarming declining trend for nine years, mainly due to mismanagement which led to lack of replanting, as well as rising labour and fertiliser costs, says an expert.

ISTA Mielke GmbH executive director Thomas Mielke said currently, 1.1 million to 1.2 million hectares, or about 20 per cent of the oil palms in Malaysia, are 20 years or older.

“There planting of 90,000 hectares of oil palms on average per year in Malaysia over the past five years was also not enough to improve the yield,” he said at a plenary session in conjunction with the threeday Palm and Lauric Oils Price Outlook Conference & Exhibition 2019 (POC2019) here yesterday.

Mielke said Malaysia would need to replant at least 250,000 hectares of oil palms yearly for the next five years to keep the palm oil industry attractive.

“The government could set up a task force comprised of experts to advise the smallholders on replanting issues,” he said, adding that a tax exemption could also be provided to industry players as a means to support them.

Mielke pointed out that the crude palm oil (CPO) futures on Bursa Malaysia are expected to improve to between RM2,350 to RM2,450 a tonne in four to six months, up from the benchmark May trading month’s value of RM2,152 per tonne, due to the strong demand worldwide.

“Global dependence on palm oil is rising in 2019, particularly with higher import needs from China and India,” he said.