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LIST OF ARTICLES

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Article Info

Vol 4 No.1 (2004) p 1-10
Palm Oil: The Driving Force of World Oils and Fats Economy
Yusof Basiron; N Balu and D Chandramohan

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Abstract


Palm Oil: The Driving Force of World Oils and Fats Economy

Palm oil accounts for 21% and 47% of the global oil and fats production and trade respectively. Both Malaysia and Indonesia together are the world’s largest producers and exporters of palm oil with 84% and 90% share of world palm oil production and export, respectively. The paper outlines the increasingly dominant role that palm oil has played in the world oils and fats supply and demand equation during the past 40 years. The ascent of palm oil as a powerhouse in the global oils and
fats market has been achieved by leveraging upon the techno-economic advantages of palm oil vis-à-vis competing oils as well as positive developments arising from consumer concerns on health, environment and food security. In efforts to maintain continued market growth, the future direction of the industry relating to improving competitiveness, widening the uses of palm oil, eliminating trade barriers and exploring new innovative marketing approaches will be discussed. These positive
developments augur well for palm oil in its role as the driving force of the world oils and fats economy.

Keyword(s): PALM OIL & OIL PALM INDUSTRY ; OILS & FATS INDUSTRY ; MARKET DEVELOPMENT ; RESEARCH & DEVELOPMENT ; FUTURE PROSPECTS ; MPOB PUBLICATIONS

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Article Info

Vol 3 No.2 (2003) p32-39
Economics of Higher Planting Density in Oil Palm Plantations
Jusoh Latif; M Mohd Noor; Mohd Tayeb Dolmat and Ahmad Kushairi Din

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Abstract


Economics of Higher Planting Density in Oil Palm Plantations

The aim of this paper was to study the financial returns from oil palm planted at different densities on mineral and peat soils in Malaysia. The method of analysis to achieve the mentioned objective was by the cost benefit analysis approach. Data for the analysis was obtained from oil palm planting density experiments at MPOB research stations at Hulu Paka in Terengganu and Teluk Intan in Perak.
The analysis indicated that maximum income could be obtained from a planting density of 148 palms/ha, contrary to the conventional practice of 136-148 palms/ha. On peat soil, income is still on the increase when the density is at 200 palms/ha. It is recommended that on peat higher than the conventional planting density of 136-148 palms/ha is adopted in order to maximize net present value (NPV).

Keyword(s): OIL PALM-Production ; HIGH DENSITY PLANTING ; FFB YIELDS ; PALM OIL & OIL PALM INDUSTRY ; PRODUCTION FORECAST ; MPOB PUBLICATIONS

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Article Info

Vol 3 No.2 (2003) p21-31
Palm Oil Products Exports, Prices and Export Duties: Malaysia and Indonesia Compared
Mohd Nasir Amiruddin

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Abstract


Palm Oil Products Exports, Prices and Export Duties: Malaysia and Indonesia Compared

Malaysia and Indonesia are the largest and second largest producers and exporters of palm oil products in the world where together they contribute 83.5% of production and 89.6% of palm oil trade in the world. Both countries export crude palm oil (CPO) and processed palm oil(PPO). The trend in exports indicates Malaysia exporting increasing quantities of CPO in the new millennium when exports of CPO increased from 0.4 million tonnes to 1.3 million tonnes in 2000 and 2001, respectively, while exports of Indonesian CPO increased from 1.8 to 2.0 million tonnes. PPO contributed to the larger share of palm products exports of both countries. Monthly FOB prices for Malaysian CPO and PPO in 2001 and 2002 were lower than those of Indonesia but prices for the latter were lower in the international market indicating price competition. Tariffs are imposed on exports of palm products by both countries with the objective initially of raising revenue. In the case of Malaysia, the objective later shifted to that of encouraging downstream processing while for Indonesia, it reflected a goal of keeping cooking oil prices to consumers down during periods of high oils and
fats prices. An evaluation of taxes imposed on exports of both countries indicated that there is a difference in the way the export duty payable in the two countries computed. The different manners of computing led to high duty payable in the case of CPO exports by Malaysia when compared to that of Indonesia. There is no duty on exports of PPO from Malaysia while Indonesian duty is very low.

Keyword(s): PALM OIL ; PALM OIL & OIL PALM INDUSTRY-Malaysia ; PALM OIL & OIL PALM INDUSTRY-Indonesia ; PRICES ; EXPORT DUTIES ; PALM OIL PRODUCTS ; MPOB PUBLICATIONS

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Article Info

Vol 3 No.2 (2003) p 15-20
Empty Fruit Bunches Evaluation: Mulch in Plantation vs. Fuel for Electricity Generation
N Ravi Menon; Zulkifli Ab Rahman and Nasrin Abu Bakar

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Abstract


Empty Fruit Bunches Evaluation: Mulch in Plantation vs. Fuel for Electricity Generation

There are compelling reasons for supporting the use of empty fruit bunches (EFB) as a source of fuelfor renewable energy (RE) power generation. Although the current use of EFB as a mulch does have financial benefits, there are better financial gains, with a number of other advantages when used as a fuel for RE power generation. The rapid depletion of fossil fuel needs an alternative replacement and
most developed nations are pursuing the development of biomass as an alternative method of power generation. In Malaysia, fortunately the country has a ready source of biomass in EFB. It is conveniently collected and available for exploitation in all palm oil mills. All that needs to be done is to convert the energy in the fuel in the most efficient manner and the country is well on the way to pursue this most important and sustainable renewable source of energy for the future. As the country has to meet the target of achieving 5% of its grid connected electrical energy from
this source by the year 2005, it has to move fast. The main achievement will be the reduction in greenhouse gas emissions (GHG) if biomass-based RE power generation is used where there is a gain of substantial volume of carbon credits. This factor alone is a compelling reason to pursue. A deeper insight into the mechanism of EFB utilization with the financial analysis, if used as a mulch or fuel, is presented in this paper, without taking into account the capital investment involved in the RE power project.

Keyword(s): EMPTY FRUIT BUNCHES ; MULCHING ; OIL PALM BIOMASS ; PALM OIL MILLS ; ENERGY SOURCES ; ELECTRICITY-Generation ; MPOB PUBLICATIONS

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Article Info

Vol 3 No.2 (2003) p1-14
Evolution of the Latin American Oil Palm Sector During the Last Decade (1991 - 2001)
Eden C Bolivar and Marisol Cuellar - Mejia

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Abstract


Evolution of the Latin American Oil Palm Sector During the Last Decade (1991 - 2001)

In the last decade, the oil palm planted area in Latin America has grown consistently, spurring the development of this sector during this period and making oil palm into one of the principal crops cultivated in this region. This dynamic performance can be attributed to the technical characteristics of palm oil, allowing its wide utilization in diverse industrial processes and its market to grow robustly. This document presents an overview of the development of the oil palm agro-industry in the world and subsequently analyses its behaviour in Latin America. It also looks at the economic and social situation of the major oil palm producing countries in the Latin American region. Likewise, the importance of palm oil within the total production and the consumption of oils and fats as well as the evolution of exports and imports of oils and fats in these countries are analysed. This is followed by a brief analysis of the potential market for palm oil in the whole American continent. Finally, Colombia’s vision for its oil palm sector up to the year 2020 is discussed.

Keyword(s): OIL PALM-Production ; OILS & FATS INDUSTRY-Latin America ; PRODUCTION FORECASTS ; MPOB PUBLICATIONS

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Article Info

Vol 3 No. 1 (2003) p32 - 36
Short-Term and Long-Term Projection of Malaysian Palm Oil Production
Ramli Abdullah

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Abstract


Short-Term and Long-Term Projection of Malaysian Palm Oil Production

Forecasting is of fundamental importance in all of the sciences, including economics. As such, its accuracy is of obvious importance as the forecasts generated are normally being used as inputs to a
decision-making process. Knowing this fact, most forecasters have been hard pressed to prepare the most realistic and accurate projections utilizing a variety of quantitative and subjective methodologies. Besides this concern and although it is extremely important to do their best to improve forecast accuracy, we must learn to accept the fact that forecast error is an unavoidable
occurrence. Faced with this reality, the forecasters need to effectively capture, measure, report and utilize forecast error to its benefit. They will also keep on reviewing their models from which the forecasts are based on due to the ever changing environment and improving forecast accuracy through a variety of qualitative and quantitative techniques.

Keyword(s): PALM OIL & OIL PALM INDUSTRY-Malaysia ; OIL PALM-Production ; PRODUCTION STATISTICS ; PRODUCTION FORECASTS ; MPOB PUBLICATIONS

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Article Info

Vol 3 No. 1 (2003) p25 - 31
An Economic Perspective of Oil Extraction Rate in the Oil Palm Industry of Malaysia
Chang, L C; Abdul Rahim Abdullah Sani and Zainon Basran

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Abstract


An Economic Perspective of Oil Extraction Rate in the Oil Palm Industry of Malaysia

The national average oil extraction rates (OER) in Malaysia since 1980 until 2002, have fluctuated from a low of 18.48% in 1982 to a high of 19.87% in 1987/1988, although many individual mills
have obtained more than 20% OER.
In times of low prices of crude palm oil (CPO) as seen in the recent period of 2000/2001 and low yield productivity, producers are challenged to improve the performance of OER as this measurement is a management tool in assessing the profitability of a plantation enterprise.
Historical OERs for the past 10 years are used to estimate at the macro level, the quantity and value of CPO loss or gain, arising from the annual change of OER. The differentials of the annual
OERs and the 20% benchmark OER are also used to estimate the loss in revenue, since until now, the benchmark OER of 20% has not been attained. The highest loss of CPO revenue amounted to about RM 255 million in 1999 arising from an annual change of minus 0.31% OER, whilst that arising from the differential of the OER in 1999 and the benchmark 20% OER, or a drop of 1.4%, amounted to an astounding RM 1.15 billion in a single year based on an average CPO price of RM 1449.50 in 1999.
If CPO is considered in the downstream processing, value adding that could have been achieved ranged from RM 21.53 to RM 54.66/t in the five-year period of 1997-2001.

Keyword(s): PALM OIL & OIL PALM INDUSTRY-Malaysia ; OIL EXTRACTION RATE (OER) ; ECONOMIC ANALYSIS ; PRODUCTION FORECASTS ; MPOB PUBLICATIONS

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Article Info

Vol 3 No. 1 (2003) p16 - 24
Zero Burning Techniques in Oil Palm Cultivation: an Economic Perspective
M Mohd Noor

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Abstract


Zero Burning Techniques in Oil Palm Cultivation: an Economic Perspective

Land clearing for oil palm cultivation used to be undertaken by the clean clearing method, which included burning and re-burning of biomass. The method pollutes the air and is costly to the society. The government of Malaysia had imposed a ban on open burning in 1998. A financial and economic analysis of various zero burning techniques of land clearing for oil palm cultivation indicated that the techniques bring higher return compared to the clean burn method. The benefits of
the zero burning techniques, in addition to cost saving from pollution related problems, include faster returns, and savings in fertilizer input from nutrient recycling and soil preservation. Hence, in addition to abiding with the law, zero burning technique of land clearing earns additional financial and economic benefits.

Keyword(s): ZERO BURNING TECHNIQUES ; OIL PALM-Replanting ; LAND CLEARING ; OIL PALM-Cultivation ; ENVIRONMENTAL PROTECTION ; MPOB PUBLICATIONS

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Article Info

Vol 3 No. 1 (2003) p8 - 15
The Indonesian Palm Industry
Colin Barlow; Zahari Zen and Ria Gondowarsito

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Abstract


The Indonesian Palm Industry

This paper reviews the past development and prospects in the 2000s of Indonesian oil palm production, noting the rapid expansion of the sector up to the late 1990s and fast growth of private estates and smallholdings. It examines the organization, performance and constraints of chief
sub-sectors, indicating relatively low costs of production on estates and even lower costs on smallholdings. It considers the nucleus estate and plasma smallholding development as unexpectedly successful, despite needs for further improvement.
The paper views the main current constraints as scarce development capital, inefficient deployment of labour and other resources, poor technological levels, and problems over land acquisition and security. It nonetheless sees a slow improvement occurring, where this could be accelerated by government support with credit and extension, especially for smallholdings. Given such help, the industry should renew its expansion and become the worldís leading oil palm producer.

Keyword(s): PALM OIL AND OIL PALM INDUSTRY-Indonesia ; OIL PALM-Productions ; FORECASTs ; LABOUR ; MPOB PUBLICATIONS

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Article Info

Vol 3 No. 1 (2003) p1-7
The Production Cost of Oil Palm Fresh Fruit Bunches: the Case of Independent Smallholders in Johor
Azman Ismail; Mohd Arif Simeh and M Mohd Noor

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Abstract


The Production Cost of Oil Palm Fresh Fruit Bunches: the Case of Independent Smallholders in Johor

Like in other perennial crops, the Malaysian oil palm smallholding sector can be broadly categorized into organized and independent smallholders. Despite the overall decline in oil palm smallholdings
recently, there has been an expansion of the independent smallholdersí land from 287 000 ha in 1999 to 320 000 ha in 2000. However, due to the unorganized nature of the latter, updated data and information pertaining to the performance of such smallholdings are limited. This paper attempts to overview the economic performance of these smallholders based on a survey in Johor, which has the largest number of independent smallholders (45%) and the largest independent smallholdings (40%) in the country. The paper also discusses the production cost structures of the independent smallholders compared to their counterparts in the organized smallholder sector as well as with estates.

Keyword(s): PALM OIL AND OIL PALM INDUSTRY-Malaysia ; FFB YIELDS ; PRODUCTION COSTS ; OIL PALM SMALLHOLDERS ; MPOB PUBLICATIONS

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© Malaysian Palm Oil Board (MPOB). All Rights reserved.
No part of this publication may be reproduced, stored in a retrieval system,
in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without prior written permission of the publisher.

This online publication is electronically compiled by Palm Information Centre, Malaysian Palm Oil Board (MPOB)
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