6 Mar 2019 (The Edge Markets MY) KUALA LUMPUR : The palm oil industry still has ample ways of boosting production despite the proposed cap on total oil palm planted area at about 6.5 million hectares, said industry expert Tan Sri Yusof Basiron.
For a start, the industry should re-focus on boosting crude palm oil yields, said the former chief executive officer of the Malaysian Palm Oil Council.
"Over the years, our yields have deteriorated instead of going up," he told Bernama on the sidelines of the Palm and Lauric Oils Conference and Exhibition: Price Outlook 2019/2020 (POC 2019) here today.
He said the industry should undertake the right agronomic practices by looking at the needs of oil palm plantations again; then the yields could increase and eventually the production.
Earlier at the conference, leading vegetable oils analyst Thomas Mielke had said that Malaysian palm oil yields had 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.
He said Malaysia would need to replant at least 250,000 hectares of oil palm yearly for the next five years to keep the palm oil industry attractive.
Echoing that, Yusof said the industry should take advantage of the positive outlook for the palm oil.
“The outlook in the next five years (based on what was discussed at the conference) is that the demand for palm oil will surpass supply, which would result in strengthening of the commodity’s price.
"So it is to our advantage to start planning to rehabilitate oil palm because the demand in the future will still be strong," he explained.
Besides replanting and rehabilitation of oil palm trees, such cap could also result in the conversion of land planted with other crops like cocoa or rubber to oil palm plantations if the soil is suitable.
Hence, the proposed cap would not mean the industry cannot expand or increase production; it depends on the approach that industry players take, he added.
Yesterday, Primary Industries Minister Teresa Kok said her Ministry would present a proposal to the Cabinet this month to cap oil palm plantation areas in the country at about 6.5 million hectares from 5.85 million hectares recorded at end 2018.
She said this was expected to be achieved by 2023 based on the average annual expansion of plantation from 2013 to 2018.
Kok said the move was made as oil palm plantations had been accused of causing deforestation.