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LIST OF ARTICLES

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Article Info

Vol 15 No.1 (2015) p1-7
The Effects of Establishing Sustainable Oil Palm Growers’ Cooperatives on the Incomes of Oil Palm Smallholders
Azman, I and Nazirah, C J

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Abstract


The Effects of Establishing Sustainable Oil Palm Growers’ Cooperatives on the Incomes of Oil Palm Smallholders

This article attempts to study the impact of establishing Sustainable Oil Palm Growers Cooperatives (KPSM) on the incomes of oil palm smallholders in Malaysia. In the study, data on income were collected from members as well as non-members of KPSM in Saratok, Sarawak. The study found that the nett average fresh fruit bunch (FFB) price (after deducting transportation cost) obtained by KPSM Saratok members was higher than for non-members. For example, in July 2012, the average nett price obtained by KPSM members was RM 524.80/t compared with RM 414.60/t obtained by non-members. The price difference was RM 110.20. During this period, from July 2012 until April 2014, the average nett price obtained by members of KPSM Saratok was RM 410.80/t while non-members received a price of RM 345.50/t. The average price difference in that period was RM 65.30/t. Greater efforts have to be made to attract more independent smallholders to join the cooperatives as the cooperative is an institution that can help increase productivity and income of smallholders.

Keyword(s): cooperatives, oil palm smallholders, income, quality

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Article Info

Vol 14 No.2 (2014) p27-38
Impacts of the New CPO Export Tax Structure on the Malaysian Refining Industry
Khomeini Ab Rahman Ayatollah; Ramli Abdullah; N Balu; Norihan Husin; Nik Abdullah Nik Idris; Siti Mashani Ahmad and Norfadilah Hashim

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Abstract


Impacts of the New CPO Export Tax Structure on the Malaysian Refining Industry

The performance of the Malaysian palm oil refining industry had been greatly affected since Indonesia revised her palm oil export tax structure in 2012, which made her palm products more competitive in the world market. To improve the performance of the Malaysian refining industry, the government also revised its long-standing crude palm oil (CPO) export tax (operative since the 1970s) and implemented a new export tax structure, effective 1 January 2013. This is a proactive approach by the Malaysian government to increase competitiveness. As a result, the performance of the industry has been much better after the implementation, with exports of oil palm products increasing, stocks of palm oil declining, the price of CPO showing an upward trend and volatility reduced, refinery capacity utilisation rate increasing, purchases of CPO by refineries rising, processing of CPO growing, and production of finished products also expanding. Average capacity utilisation recorded a higher rate at 56.9%, or an increase by 10% after implementation of the new export tax structure as compared with the rate in 2012. The total volume of CPO purchased by refineries also increased to 12.62 million tonnes in 2013 from 11.49 million tonnes in 2012. Meanwhile, the total volume of CPO processed by refineries in 2013 had increased to 15.89 million tonnes compared with 14.07 million tonnes in 2012, or an increase of 12.9%. Production of finished products also recorded positive performance at 0.30 million tonnes in 2013 compared with 0.29 million tonnes in 2012. A survey carried out on refineries showed that the majority of them (71%) felt that the government should continue with the new CPO export tax structure.

Keyword(s): new CPO export tax structure, competitiveness, capacity utilisation rate

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Article Info

Vol 14 No.2 (2014) p16-26
Vintage Approach to Forecasting Palm Oil Production in Peninsular Malaysia
Ali Zulhusni Ali Nordin; Siti Mashani Ahmad; Fatimah Mohamed Arshad; Kusairi Mohd Noh; Zainal Abidin Mohamed; Emmy Farha Alias; Ng Keng Yap; Nurjihan Idris and Nur Alina Jabir

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Abstract


Vintage Approach to Forecasting Palm Oil Production in Peninsular Malaysia

Oil palm is an important crop to the Malaysian economy. Due to its strategic significance there is a need to have a reliable estimate of the production of the commodity to facilitate decision-making by policymakers and industry participants. The vintage approach has been shown to be more efficient in taking into account the age of palms and their yield profile when estimating production compared with other methods. The study utilised the vintage approach adapted from Smit (2010). The findings suggest that the vintage model developed is capable of projecting as well as simulating the impact on the palm oil sector if a change or shock is injected into the system.

Keyword(s): vintage approach, CPO forecast, Peninsular Malaysia, agricultural policy, NKEA replanting policy

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Article Info

Vol 14 No.2 (2014) p8-15
Decomposition of Productivity Growth of the Malaysian Palm Oil Mill Sector
Norhidayu, A; Azman Hassan; Ramli Abdullah; Azman, I and Nur Asmani Che Dir

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Abstract


Decomposition of Productivity Growth of the Malaysian Palm Oil Mill Sector

This study investigates total factor productivity (TFP) growth in the Malaysian palm oil mill sector over the period 2005-2010, using a Stochastic Frontier Approach (SFA) model. TFP growth was decomposed into three components, namely, technical efficiency (TE), technical progress (TP) and scale components (SEC). The empirical results show that productivity growth was driven mainly by TE for all palm oil mills, followed by TP. However, a change in the scale components had a negative effect on productivity growth. Overall, the study suggests that there are opportunities to improve productivity growth in the Malaysian palm oil mill sector.

Keyword(s): Malaysian palm oil mill, total factor productivity, technical progress, technical efficiency, scale components

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Article Info

Vol 14 No.2 (2014) p1-7
Workforce in the Malaysian Oil Palm Nursery
Azman, I and Zuraihan, S

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Abstract


Workforce in the Malaysian Oil Palm Nursery

This article attempts to estimate workforce, labour shortage as well as land to labour ratio by job category in oil palm nursery sector in Malaysia since labour is a major concerns in the oil palm industry especially in oil palm nursery and plantation. Survey technique was used for data collection. Questionnaires were designed and distributed to 739 oil palm nurseries in Malaysia which registered with MPOB. Total labour requirement and shortage according to job categories namely manager, assistant manager, clerk, supervisor, operator and general worker were identified. Operator with the job scopes of planting seedlings in polybags, spraying insecticide, fertilising and watering the plant was the highest labour required by oil palm nursery. The second highest number of workers required falls under the general worker such as driver, co-driver and others. In Peninsular Malaysia and Sabah, operators and general worker were dominated by foreign workers, meanwhile in Sarawak only job category as operator is dominated by foreign workers. As in oil palm plantation sector, oil palm nursery also faces labour shortage problem especially for job category such as operator and general worker

Keyword(s): oil palm nursery, labour, shortage, land-labour ratio

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Article Info

Vol 14 No.1 (2014) p34-41
The Impact of Palm Oil Mills’ Capacity on Technical Efficiency of Palm Oil Millers in Malaysia
Azman, I

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Abstract


The Impact of Palm Oil Mills’ Capacity on Technical Efficiency of Palm Oil Millers in Malaysia

The general purpose of this study is to evaluate technical efficiency of palm oil mills in Malaysia. Specifically, the study attempts to examine if large mills are more efficient than small mills as well as to compare technical efficiency between integrated and non-integrated mills. In order to fulfill the objectives, econometric approach was used whereby crude palm oil production function was estimated by using OLS least squared technique. The Cobb-Douglas production model was used and the model is satisfactory in terms of goodness of fit. This is shown by the values of R2 (0.89) as well as F statistic (358.03). From the study, it was found that palm oil mills in Malaysia are technically efficient. In terms of processing capacity, large mills which have processing capacity more than 20 t/hr are more efficient than small mills. Integrated mills are also technically efficient as compare to non-integrated mills.

Keyword(s): palm oil, technical efficiency, FFB, processing, capacity

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Article Info

Vol 14 No.1 (2014) p24-33
Malaysian Palm Oil – Moving Ahead to Sustainable Production Growth
Kamalrudin, M S and Ramli Abdullah

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Abstract


Malaysian Palm Oil – Moving Ahead to Sustainable Production Growth

Malaysian palm oil production has surged in recent decades and the palm oil industry has been transformed to become Malaysia’s key socioeconomic driver. Plans are underway to ensure palm oil continues to be a major growth engine and its production remains sustainable in the future. While undergoing the process of transformation, the industry faces such major issues as labour and land availability that can hinder the sustainability of production growth. This article highlights the continuous efforts made to sustain production growth in Malaysia in the future, focusing on increasing land productivity, replanting, promoting mechanisation and upgrading labour skills. In addition, the article also forecasts long-term palm oil production until 2020, the year targeted for the transformation of Malaysia into a high income economy.

Keyword(s): palm oil, sustainable production, production growth, production forecast

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Article Info

Vol 14 No.1 (2014) p9-23
The Co-operative Benefits of Malaysia and Indonesia in Palm Oil
Mohamed Rizwan Habeeb Rahuman

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Abstract


The Co-operative Benefits of Malaysia and Indonesia in Palm Oil

The article has argued that the rising competition between Malaysia and Indonesia is affecting the palm oil industry in totality. The recent phenomenon of palm oil playing a role in Chinese shadow banking has also contributed to the depression in palm oil prices, particularly in 2013. With these in mind, and through the use of Prisoner’s Dilemma game theory, the article argues for both Malaysia and Indonesia to institutionalise co-operation, rather than compete strongly, through the setting up of a palm oil producing and exporting countries organisation (POPEC). This is aimed at better management of the supply and inventory of palm oil in the global market in line with global demand conditions.

Keyword(s): palm oil, competition, Malaysia, Indonesia, game theory,comparative advantage, downstream, upstream, shadow banking

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Article Info

Vol 14 No.1 (2014) p1-8
The Effect of Progressive Export Tax on Indonesian Palm Oil Industry
Amzul Rifin

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Abstract


The Effect of Progressive Export Tax on Indonesian Palm Oil Industry

The government of Indonesia imposed export tax on crude palm oil (CPO) and its derivatives since September 1994 and in September 2007, the progressive export tax was implemented. This policy has two objectives, first is to guarantee the availability of domestic CPO as the main raw material of cooking oil which is one of the staple products of Indonesia. Secondly, is to develop the downstream industry of the palm oil industry which has higher value-added compared to CPO. By limiting CPO export, hopefully the CPO will be utilised to produce higher value-added product. The objective of this article is to analyse the effect of export tax
on Indonesian palm oil industry. The results indicate that export tax will decrease domestic CPO price, production, export and competitiveness. The policy will make producers worse off while consumers and cooking oil producers will be better off. On the other hand, the policy is able to increase the refined palm oil export and stabilise the cooking oil price.

Keyword(s): export tax, crude palm oil, Indonesian palm oil industry

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Article Info

Vol 13 No.2 (2013) p38-51
The Impact of La Niña and El Niño Events on Crude Palm Oil Prices: An Econometric Analysis
Ayat K Ab Rahman; Ramli Abdullah; N Balu and Faizah Mohd Shariff

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Abstract


The Impact of La Niña and El Niño Events on Crude Palm Oil Prices: An Econometric Analysis

Both the La Niña and El Niño events are deemed as being strong market sentiments issues that supported crude palm oil (CPO) prices in an upward trend. An analysis carried out was shown that both events have a positive relationship with CPO price movements in the market. This study also reveals that the effect of the La Niña event on CPO prices is greater than that of the El Niño event. Production will normally decline as heavy rainfall usually brings floods that could disrupt harvesting and the collection of fruits in low lying oil palm areas. Palm oil stock levels could also decline due to lower supply availability. In contrast, the effect of the El Niño event is seen on a long-term basis. Hot weather conditions during El Niño could result in less rainfall and have a stress effect on oil palm. This could bring down the yield of fresh fruit bunch (FFB) production in the future. The study revealed that past El Niño events (at lagged 8 to 22 months) can also affect current CPO production. With the incorporation of these two phenomena into the model (La Niña and El Niño events) developed for this study, it was found that the CPO price can be forecast more accurately. By using the model, the direct and indirect impact of La Niña and El Niño events on CPO prices can be determined. The results also showed that when La Niña and El Niño events occur, CPO production in a year will decline by 3.37%, palm oil stock level will decline by 2.5%, while the CPO price is likely to be higher by 10.2% as compared to a situation when the phenomenon did not occur.

Keyword(s): -

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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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