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LIST OF ARTICLES

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Article Info

Vol 13 No.1 (2013) p22-34
Measuring Performance Efficiency of Oil Palm Plantations using Window Analysis
Fazeeda Mohamad; Razman Mat Tahar; Cheng Jack Kie and Ahmad Borhan Ahmad Nordin

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Abstract


Measuring Performance Efficiency of Oil Palm Plantations using Window Analysis

Performance of a unit or an organisation is among the issues discussed as a way of helping the decision-making process. This study was aimed at determining and evaluating performance efficiency trends in the
management of selected plantations in the oil palm industry. It took into account the input and output factors using data envelopment analysis (DEA). Relative efficiency was identified to set the benchmark in this case study, and as a way to improve the overall activities related to the use of input as resources by the least efficient plantation. The DEA method was used to calculate the efficiency trend score. Data collected were from the years 2001-2010 for five input and one output variables. Analysis was conducted using the Window Analysis, DEA Solver. The overall result shows significant correlations among the variables and
that the average efficiency score determines efficiency trend. Two out of three plantations studied had highest average efficiency scores while the other one was the less efficient.


Keyword(s): -

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Article Info

Vol 13 No.1 (2013) p14-21
Economic Feasibility Study on Establishing an Oil Palm Biogas Plant in Malaysia
Roslan Abas; Ramli Abdullah and Yahaya Hawari

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Abstract


Economic Feasibility Study on Establishing an Oil Palm Biogas Plant in Malaysia

The processing of oil palm fresh fruit bunch (FFB) primarily for palm oil results in the production of large amount of wastes, particularly in the form of palm oil mill effluent (POME). Production of POME can be estimated at almost three times the quantity of crude palm oil (CPO) produced. It can pollute the environment through the production of biogas which can be captured through a biogas-capturing system in a biogas plant. After capturing, the biogas can be utilised either for fueling the mill boiler, electricity generation, flaring or as cooking gas. This current study was carried out with the objective of assessing the economics of establishing an oil palm biogas plant based on the four different utilisation methods of the biogas. The results indicate that utilising biogas for the boiler gives higher economic returns compared with the other three options, given certain conditions. This study finally concludes with some issues that have an impact on any interested investor in a biogas project.

Keyword(s): -

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Article Info

Vol 13 No.1 (2013) p1-13
Impact of Palm Oil Supply and Demand on Palm Oil Price Behaviour
Ayat K Ab Rahman; N Balu and Faizah Mohd Shariff

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Abstract


Impact of Palm Oil Supply and Demand on Palm Oil Price Behaviour

The article will highlight the impact of supply and demand and market sentiment factors on the Malaysian palm oil price behaviour, and will examine their impact in 2013. The price of crude palm oil (CPO) is dependent on many factors that vary from time to time, such as fundamental factors, i.e. both supply and demand factors in the world market and unpredictable market sentiments, e.g. extreme weather phenomenon, political crisis, new policies or regulations, and impact of natural disasters. The CPO price in 2012 is a good example where it was affected negatively by a combination of both supply and demand factors. From the supply perspective, the CPO stock build-up arising from high carry-over stocks at the beginning of the year and an increase in CPO production had contributed to its bearishness in 2012. From the demand side, it is a weaker export demand from major importing countries, like China, P R and Pakistan. The introduction of Malaysia’s new CPO export tax structure effective 1 January 2013 is likely to result in an increase in palm oil exports and, thus, indirectly to a reduction in the high palm oil stock levels in the country. Moreover, the B5 programme which is to be expanded throughout Malaysia in 2013/2014 will also reduce the level of palm oil stock availability in the country. Besides that, the Malaysian palm oil supply growth in 2013 is expected to increase moderately due to the introduction of the oil palm replanting scheme with a government allocation of RM 100 million for this purpose. The scheme is expected to see the replanting of 100 000 ha of unproductive palms and palms over the age of 25 years. These scenarios will indeed be a positive indication of the firming up of CPO prices in the market place in 2013. The article will also incorporate the use of an econometric modeling method for an analysis of the factors affecting CPO price behaviour.

Keyword(s): -

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Article Info

Vol 12 No.2 (2012) p36-43
An Analysis of Crude Palm Oil Production in Malaysia
Ramli Abdullah

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Abstract


An Analysis of Crude Palm Oil Production in Malaysia

Palm oil is a very important commodity in Malaysia, and as such, it has become one of the 12 economic sectors under the National Key Economic Areas (NKEA) to realise the country’s vision towards attaining a high income nation status in 2020. However, land is a limited resource for future oil palm expansion, thus, land productivity is pivotal in achieving the target of the NKEA. This can also affect future production of palm oil. Thus, it is the objective of this article to understand its behaviour in the past in order to determine its trend in the future. Based on historical data, palm oil production behaviour can be characterised by four components, namely trend, cyclical, seasonal and irregular components. The cyclical component is less obvious due to the nature of the data which is on monthly basis. However, this monthly data is suitable for exhibiting the seasonal and trend components. The seasonal component produces significant monthly indices which show performance of monthly production in a year. The trend component shows that production of palm oil is generally on the uptrend. The last irregular component indicates the production behaviour which is not described by the other three components and is considered a totally random error. Having understood the production pattern which consists of the four components, various key factors (mostly biological in nature) which affect and determine the movement of the palm oil production were also discussed in this article. These factors include rainfall (which affects more on the fresh fruit bunches yield), matured areas and fertiliser application. Coupled with the four components, they give a clearer picture of the production pattern of crude palm oil production in Malaysia.


Keyword(s): PALM OIL; CRUDE PALM OIL PRODUCTION - Malaysia; TRENDS; PRODUCTION PATTERN; BIOLOGICAL FACTORS

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Article Info

Vol 12 No.2 (2012) p22-35
The Economic Impact of the North-east Monsoon and La Niña on Oil Palm Production in Malaysia
Ayat K Ab Rahman*; Ramli Abdullah* and Faizah Mohd Shariff

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Abstract


The Economic Impact of the North-east Monsoon and La Niña on Oil Palm Production in Malaysia

La Niña, which occurs during the north-east monsoon season, normally brings higher rainfall than during normal weather in Malaysia. This study shows that La Niña had caused flooding in some oil palm planted areas in the past. The floods in effect disrupted harvesting and collecting activities and fresh fruit bunches (FFB) on the oil palm left overripe or become rotten. Crude palm oil (CPO) production declined and reduced income of oil palm growers. The potential losses of FFB by oil palm estates during La Niña in 2010 and 2011 were estimated to be about 239 181 t and 224 776 t respectively. In term of potential income losses, they were estimated at RM 155.10 million and RM 168.22 million during the two years. One of the reasons for the increase in the cost of FFB production was the damage of infield roads during floods. Hence, floods affected estates had spent RM 25.80 million and RM 26.48 million to repair the roads in 2010 and 2011 respectively. This study also showed that CPO production depends negatively with a dummy variable used to proxy La Niña. In the absence of La Niña, CPO production in 2010 should have been around 17.60 million tonnes when the actual CPO production during the year registered at only 16.99 million tonnes. The total potential CPO production loss was estimated to decline by 3.5% and 2.2%, as compared to production without La Niña in 2010 and 2011 respectively.


Keyword(s): OIL PALM; OIL PALM PRODUCTION - Malaysia; LA NINA;

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Article Info

Vol 12 No.2 (2012) p14-21
Supply and Demand Performance for the Oils and Fats Industry in Malaysia
Ahmad Borhan A Nordin; Faizah Mohd Shariff; N Balu and Nik Abdullah Nik Idris

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Abstract


Supply and Demand Performance for the Oils and Fats Industry in Malaysia

Malaysia was the world’s second largest palm oil producer, but it was the leading exporter of the oil in 2011. The country had exported nearly 18 million tonnes of palm oil, 3.4 million tonnes of palm kernel oil, 2.2 million tonnes of oleochemicals, 0.4 million tonnes of finished products and nearly 0.3 million tonnes of other palm-based products. Meanwhile, the imports of edible oils and fats, including palm oil had nearly doubled from 1.1 million tonnes in 2005 to 2.1 million tonnes in 2011. Imports of palm oil had grown from 26% in 2005 to 61% in 2011, while imports of palm kernel oil had tripled over the same period. Imports of soyabean, canola/rapeseed and sunflower oils had increased, with their total combined volume increasing to 0.26 million tonnes in 2011 from 0.16 million tonnes in 2005. Only the import of coconut oil had declined from 0.24 million tonnes in 2005 to 0.16 million tonnes in 2011. This scenario indicated that palm oil still played a major role in the demand performance of edible oils and fats in Malaysia. However, arising from higher disposable income and traditional taste preference for premium soft oils, the demand for soyabean, canola/rapeseed and sunflower oils have seen increases in their consumption patterns in recent years.

Keyword(s): OILS AND FATS; SUPPLY; DEMAND; PALM OIL INDUSTRY - Malaysia

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Article Info

Vol 12 No.2 (2012) p1-13
The Growth and Prospects for the Oil Palm Plantation Industry in Indonesia
Helena Varkkey

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Abstract


The Growth and Prospects for the Oil Palm Plantation Industry in Indonesia

This article provides a historical political economy perspective of the Indonesian oil palm plantation sector. It aims to shed light on the process of how Indonesia took over from Malaysia in becoming the world’s current largest producer of palm oil. This article argues that the regional trend of state-led development that relied on agribusiness as a major sector played a major role in the development of oil palm as an important crop in the region, especially in Malaysia and Indonesia. Indonesia specifically promoted and encouraged the expansion of oil palm as a way to fulfill state developmental aims; identifying it as a lucrative source of revenue, foreign exchange, and rural employment. With oil palm playing such an important role in the Indonesian economy, the state has outlined plans for rapid area expansion, to maintain its world dominance in the sector. Malaysian and Singaporean companies are currently major players in the Indonesian oil palm plantation sector, and continue to reap the benefits of this lucrative crop alongside local firms.

Keyword(s):

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Article Info

Vol 12 No.1 (2012) p24-30
Economic Impact of Ganoderma Incidence on Malaysian Oil Palm Plantation – A Case Study in Johor
Roslan Abas and Idris Abu Seman

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Abstract


Economic Impact of Ganoderma Incidence on Malaysian Oil Palm Plantation – A Case Study in Johor

Crop losses due to pest and disease infestations are major threats to agricultural development. For export oriented commodities such as palm oil, the problem of pests and diseases (P&D) cannot be viewed in isolation because it can affect international cost competitiveness as well as revenue losses. The objective of this article is to estimate revenue losses due to FFB yield reduction as a result of Ganoderma attack. From the study, it was found that Ganoderma attack can lead to fresh fruit bunches (FFB) yield reduction between 0.04 t and 4.34 t/ha on 10 years to 22 years of planting respectively. Based on annual growth of Ganoderma incidence rate, it was estimated that in 2020, a total of 400 thousand hectares could be affected.

Keyword(s): OIL PALM PLANTATIONS-Malaysia; GANODERMA; ECONOMIC IMPACT; PESTS AND DISEASES

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Article Info

Vol 12 No.1 (2012) p14-23
The Impact of Renewable Fuel Standard (RFS2) on Palm Biodiesel’s Market Access to the United States of America
Rosidah Radzian

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Abstract


The Impact of Renewable Fuel Standard (RFS2) on Palm Biodiesel’s Market Access to the United States of America

On 26 March 2010, the Environmental Protection Agency (EPA) published final changes to the RFS2 programme as required by the Energy Independence and Security Act (EISA) of 2007. EISA has targeted 117 million tonnes (36 billion gallons) of renewable fuel to be blended into transportation by 2022. The Act also introduced new eligibility of volume requirements for the four categories of renewable fuel. The most significant aspect of the RFS2 programme is the inclusion of life cycle analysis for greenhouse gas (GHG) emissions to qualify as a renewable fuel. The life cycle analysis of GHG emissions must be lower than the 2005 baseline average for gasoline or diesel fuel that it replaces. Four different levels of reductions are required for the four different renewable fuel standards. These include 20% for conventional renewable fuels, 50% for advanced biofuel, 50% for biomass-based diesel and 60% for cellulosic biofuels. RFS2 regulation came into effect on 1 July 2010. For 2012, the statutory volume requirement is 3.25 million tonnes (1.0 billion gallons) and a minimum of 3.25 million tonnes/year (1.0 billion gallons) of biomass-based diesel is targeted from 2013 through 2022. The proposed volume for 2013 is 4.02 million tonnes (1.238 billion gallons). Currently, feedstocks for biodiesel already approved by EPA included soyabean oil, algal oil, biogenic waste oils/fats/yellow grease, corn oil from DGS and canola oil. Palm-based biodiesel, wood pulp ethanol and grain sorghum ethanol are still under review by EPA. Notice of Data Availability (NODA) for palm oil was published on 27 January 2012. Based on EPA’s analysis, palm-based biodiesel fails to meet the minimum requirement of GHG emission saving of 20%, thus, does not qualify as renewable biofuel under RFS2; palm-based biodiesel and renewable diesel only reduce GHG emission by 17% and 11% respectively. For palm-based biodiesel to be categorised under biomass-based diesel (D4 RIN), it must comply with 50% GHG saving compared to 2005 baseline of petroleum diesel. Malaysian government and other interested parties must submit their comments during the rule-making process to influence EPA on their modeling of palm pathway. Only one pathway will be approved for palm-based biodiesel regardless of its origin in the final rule-making process. If palm NODA is approved by EPA in the final rule-making process, the future for palm-based biodiesel and renewable diesel in the US renewable energy market are non-existence. The reinstatement of USD 1/gallon tax credit for 2011 has given a boost for the biodiesel industry in the US and the production of biodiesel in 2011 exceeded 3.25 million tonnes (1.0 billion gallons). The extension of biodiesel tax credit for 2012 is being debated after it expired on 31 December 2011 and the prospect of US biodiesel industry in 2012 will be more challenging without the extension of the tax credit.

Keyword(s): PALM BIODIESEL; ENVIRONMENTAL PROTECTION AGENCY (EPA); RENEWABLE FUEL STANDARD (RFS2); MARKET ACCESS-United States of America

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Article Info

Vol 12 No.1 (2012) p8-13
Internationalisation of Malaysian Palm Oil-based Multinationals
Anuar Md Nor

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Abstract


Internationalisation of Malaysian Palm Oil-based Multinationals

This article highlights the internationalisation strategies of selected Malaysian palm oil firms. These Malaysian palm oil multinationals which we call palm oil-based multinationals (POB MNE) are undertaking foreign direct investments (FDI) in developing as well as developed countries. The motives of their FDI are explained using the internationalisation theory. The internationalisation of POB MNE will require new roles for key institutions supporting the Malaysian palm oil industry. This is especially in the case of MPOB which undertakes research activities which are funded from cess levied on the palm oil industry.

Keyword(s): OIL PALM INDUSTRY-Malaysia; INTERNATIONALISATION; FOREIGN DIRECT INVESTMENTS (FDI)

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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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