NEW DELHI: A better replanting rate of older oil palm areas can increase Malaysia’s annual palm oil output by 2.5 million tonnes, Plantation and Commodities Minister Datuk Seri Johari Abdul Ghani said.
Johari has raised concern about the low rate of replanting by independent smallholders, who number about 450,000 and have 1.5 million hectares under cultivation.
“Our replanting has dropped significantly. Based on industry standards, we should replant 4-5 per cent, but our national average is only about 1.8 per cent,” the minister said at a press conference in New Delhi on Thursday.
Increasing the replanting rate to industry standards will add more than 2.5 million tonnes to the total palm oil production, he said.
As Malaysia follows sustainable palm oil standards, it will not open up new areas for plantations and will instead focus on higher yield on the current harvested area of 5.7 million hectares, Johari said.
Malaysia’s forest cover, which is 54 per cent at present, cannot drop below 50 per cent as part of the country’s climate commitments.
Johari said Malaysia is working on a number of initiatives such as greater focus on research and development, more replanting and consolidation of smallholdings to grow output.
Malaysia produced 18.6 million tonnes of palm oil in 2023 compared with about 20 million tonnes a decade ago.
Meanwhile, Malaysia and India discussed ways to increase cooperation in the palm oil sector.
Johari and Indian Agriculture Minister Shivraj Singh Chouhan met on Thursday to explore opportunities in the agriculture field, including collaboration on the Indian initiative known as “the National Mission on Edible Oils—Oil Palm”.
Under the scheme launched in 2021, India aims to expand its oil palm cultivation area manifold as part of its efforts to reduce dependence on imported edible oil.
“In this endeavour, Malaysia can provide expertise in improving crop yields, converting underutilised land into productive oil palm plantations, and nurturing the growth of oil palm cultivation,” Johari earlier told an industry conference.
Meanwhile, the crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives closed higher on Thursday, driven by positive export sentiments that lifted market dynamics, said palm oil trader David Ng.
He said the favourable export conditions, marked by strong demand and optimistic trade forecasts, continued to bolster investor confidence and supported an upward trajectory in CPO futures prices.
“We see support at RM3,850 and resistance at RM4,000,” he told Bernama.
At the close, the spot month August 2024 contract increased RM8 to RM3,985 a tonne, September 2024 rose RM6 to RM3,959 a tonne and October 2024 climbed RM5 to RM3,937.
November 2024 gained RM3 to RM3,924 a tonne, while December 2024 and January 2025 rose RM4 to RM3,925 and RM3,934 a tonne respectively.
Total volume dropped to 58,517 lots from Wednesday’s 59,127 lots while open interest improved to 221,883 contracts from 218,883 contracts previously.
The physical CPO price for July South was RM10 higher at RM4,040 per tonne.
