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LIST OF ARTICLES

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Article Info

Vol 11 No.2 (2011) p1-12
Labour Requirements in the Malaysian Oil Palm Industry in 2010
Ramli Abdullah; Azman Ismail and Ayatollah Khomeini A Rahman

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Abstract


Labour Requirements in the Malaysian Oil Palm Industry in 2010

Malaysian oil palm industry is labour intensive especially in the oil palm plantations. This article estimated the total number of workforce in the Malaysian oil palm plantations in 2010 by carrying out a census in all the plantations. It is estimated that there were 446 368 workers in 2010. This number consists of mainly foreigners of about 69% and locals of about 31%. The small number of local participation indicates their lack of interest to work in the industry and this urged the industry to resort to employing foreigners. Foreign workers worked for various critical jobs which are labour intensive, particularly field jobs such as harvesting and collecting fruits, weeding work and other general work. Majority of them are Indonesians, in addition to other nationalities such as Bangladeshi, Thais, Myanmars, etc. The labour land ratio is 1:9.95 which means that one worker can cover about 10 ha. The study also shows that oil palm plantations in Sarawak and in Peninsular Malaysia appeared to face critical shortage of labour as compared to Sabah. As an ideal situation, the oil palm plantations as a whole would require a total of 493 512 workers for the 4.19 million hectares of planted areas under oil palm in 2010.

Keyword(s): LABOUR; HARVESTING; LABOUR LAND RATIO; OIL PALM PLANTATIONS-Malaysia

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Article Info

Vol 11 No.1 (2011) p28-41
A Study on the Malaysian Oil Palm Biomass Sector – Supply and Perception of Palm Oil Millers
Roslan Abas; Mohammad Fairuz Kamarudin; A Borhan A Nordin and Mohd Arif Simeh

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Abstract


A Study on the Malaysian Oil Palm Biomass Sector – Supply and Perception of Palm Oil Millers

From 379 palm oil mills in Malaysia that responded to the survey, about 30% or 120 of them were involved in utilising biomass [either empty fruit bunches (EFB) or palm oil mill effluent (POME)] by turning this biomass into EFB fibre, bio-fertiliser or biogas. Nevertheless, some of the millers who have not been involved in utilising biomass actually returned the EFB to plantation as mulching. Most of the millers agreed that policy related to biomass needs to be firm up. Environment sustainability is a concern of the millers. Study suggested that policy on biomass need to be provided as well as economic evaluation on biomass projects to the millers.

Keyword(s): OIL PALM; OIL PALM BIOMASS; PALM OIL MILLERS; EFB; POME; OIL PALM BIOMASS SECTOR-Malaysia; USES AND BY-PRODUCT UTILIZATIONS

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Article Info

Vol 11 No.1 (2011) p23-27
Socio-economic and Feasibility Study of Utilising Palm Oil Derived Biofuel in Malaysia
Muhammad Hanafi Asril Rajo Mantari; Mohammad Nazri Mohd Jaafar and Adrian Paul Raj

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Abstract


Socio-economic and Feasibility Study of Utilising Palm Oil Derived Biofuel in Malaysia

In May 2006, the Malaysian government introduced the National Biofuel Policy to reduce the nation’s dependence on non-renewable fossil fuels. This study was carried out to determine the feasibility of using palm oil derived biofuel (Envodiesel) in Malaysia in term of socioeconomic impact to both, the government and consumer. Among the parameters studied were the amounts of excess crude palm oil available for palm biofuel blending without affecting local and international consumption of palm oil and financial costing or government savings in term of subsidy from the use of palm biofuel blends (B5, B10, B15, B20, B25) in Malaysia. It is concluded that the supply of local palm oil is enough to cater biofuel usage up to B15 without disturbing supply for other used of palm oil. Furthermore, Malaysian government needed to subsidise nearly RM 4 billion annually in order to keep the price of biofuel remains at competitive level.

Keyword(s): PALM OIL; BIOFUEL; SOCIOECONOMIC IMPACT

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Article Info

Vol 11 No.1 (2011) p12-22
Strengthening the Malaysian Palm Oil-based Biodiesel Industry: Solving Current Issues and Impact on CPO Prices
Ayat K Ab Rahman; Ramli Abdullah; Mohd Arif Simeh; Faizah Mohd Shariff and Hamid Jaafar

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Abstract


Strengthening the Malaysian Palm Oil-based Biodiesel Industry: Solving Current Issues and Impact on CPO Prices

The palm oil-based biodiesel industry can be considered as a ‘golden egg’ of the Malaysian palm oil supply chain. This is due to the role it plays in improving price scenario of crude palm oil (CPO) as well as creating value addition for palm oil products. This benefits all subsectors in the Malaysian palm oil supply chain. Based on the last four years scenario, total additional income received by oil palm growers was RM 20.835 billion. This scenario adds up another RM 61.50/t or 16% in support of fresh fruit bunch (FFB) prices. Meanwhile, under the Bx implementation programme, price of CPO is estimated to increase by RM 13/t if B1 programme implemented were to be. If the production of palm methyl ester (PME) increased to 0.3 million tonnes (B3) the price of CPO is expected to increase by RM 55/t. The aggressive implementation of biodiesel blending at 5% (B5) would result in the price of CPO to increase by RM 120/t.
However, although still at infancy stage, the palm oil-based biodiesel industry has already faced a few challenges. These challenges can be either within the oil palm industry itself or outside the industry. The analysis on cost of PME production in 2009 shows that biodiesel industry is still not viable as producers cannot fully recover depreciation in their operation due to the problem of overcapacity. Meanwhile, the main challenge is the implementation of the Bx programme for the local market. It can be a ’key‘ to the success of the Malaysian biodiesel industry in particular and the whole industry in general. Meanwhile, the challenge from outside the market is beyond the control of the industry as it is difficult to be solved. The challenge is related to rules and regulations from importing countries in order to protect their own products. Meanwhile, palm oil industry itself should always produce palm oil products in a sustainable manner at all levels of production to ensure this industry can sustain in the future.

Keyword(s): PALM OIL; BIODIESEL; BIODIESEL INDUSTRY-Malaysia; PALM METHYL ESTERS(PME); USES AND BY-PRODUCT UTILIZATIONS

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Article Info

Vol 11 No.1 (2011) p1-11
RSPO P&C – The Challenge of Making the Principles and Criteria Operational
Carl Traeholt and Christian Schriver

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Abstract


RSPO P&C – The Challenge of Making the Principles and Criteria Operational

The Round-table on Sustainable Palm Oil (RSPO) Principle and Criteria(P&C) took effect in 2007. Since then, 5% of the RSPO oil has been certified as ‘sustainably produced’. Nevertheless, deforestation continues at an alarming rate, leading to intensified criticism of the palm oil industry’s practices. This study assesses members’ capacity to comply with the RSPO P&C beyond the moment of certification. Thirty-six companies operating 4.25 million hectares of oil palm plantations generate USD 3 billion in net profit but only two have set up in-house capacity to implement the RSPO P&C. Limited understanding of the RSPO P&C at conceptual level, rather than lack of commitment, is a key weakness amongst the industry stakeholders. Concurrently, environmental NGO often give technical criticism rather than offer broad operational support to the industry, which reduces the general perception of the RSPO P&C to specific regulations that require reactive measures instead of adopting and integrating it conceptually in a proactive manner at the earliest planning stages of the operations. Finally, ambiguous HCV-evaluation and assessments, and lack of a common standard add to the confusion and often leave industry players in unreasonable and costly management situations.

Keyword(s): ROUND-TABLE ON SUSTAINABLE PALM OIL(RSPO); PRINCIPLE AND CRITERIA; CERTIFICATION

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Article Info

Vol 10 No.2 (2010) p29-38
Accelerated Oil Palm Replanting: The Way Forward for a Sustainable and Competitive Industry
Mohd Basri Wahid and Mohd Arif Simeh

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Abstract


Accelerated Oil Palm Replanting: The Way Forward for a Sustainable and Competitive Industry

Accelerated replanting of old and unproductive oil palm is part of the government’s National Key Economic Area (NKEA) Transformation Programme. It will enable changes to be made within the oil palm supply chain, as the driver of the national high income strategy. Despite its vast potentials, the industry, however, is burgeoned by the issue of stagnating fresh fruit bunches (FFB) yield. Increasing prevalence of old palms resulted from low rate of replanting at only 1.18% per annum was attributed mainly to the economic reason of higher FFB prices. If this trend continues, there would be a likely situation of ‘the rush to replant’, which could affect the overall supply chain, starting from the demand for seeds/seedlings, and subsequently affecting the milling and refining sectors, culminating in the export sector. This article, in highlighting the significance of replanting, has elucidated that the country requires continued accelerated replanting at the rate of at least 155 000 ha/yr.

Keyword(s): OIL PALM REPLANTING; NATIONAL KEY ECONOMIC AREA(NKEA); OIL PALM SUPPLY CHAIN

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Article Info

Vol 10 No.2 (2010) p23-28
Regional Comparative Advantage and Competitiveness of Malaysian Palm Oil Products
Behrooz Hassanpour and Mohd Mansor Ismail

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Abstract


Regional Comparative Advantage and Competitiveness of Malaysian Palm Oil Products

This article examines the competitiveness of Malaysian palm oil products compared to other industrial plantation products (cocoa products, coconut, tea and pepper) in selected ASEAN countries (Indonesia, Philippines, Singapore and Thailand) and in China by using the revealed comparative advantage (RCA) and the revealed symmetric comparative advantage (RSCA) indices. The export data for seven groups of products based on the standard commodity categories as defined in the harmonized tariff system (HTS) at the four-digit level were employed. The results indicate that Malaysia has a comparative advantage in six products: palm oil (HS 1511), coconut (copra) and palm kernel oil (HS 1513), cocoa butter (HS 1804), cocoa powder (HS 1805), cocoa paste (HS 1803) and pepper (HS 0904), but a comparative disadvantage in tea (HS 0902). Based on the competitiveness position, Indonesia ranked first while Malaysia ranked second in oil palm products.

Keyword(s): PALM OIL PRODUCTS; REVEALED COMPARATIVE ADVANTAGE(RCA); REVEALED SYMMETRIC COMPARATIVE ADVANTAGE(RSCA)

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Article Info

Vol 10 No.2 (2010) p17-22
New Revenue Opportunities Arising from the Waste Streams of the Oil Palm Industry
David Milroy

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Abstract


New Revenue Opportunities Arising from the Waste Streams of the Oil Palm Industry

Pure Power owns an innovative lignocellulosic conversion technology, which enables lignochemicals to be extracted from non-food based feedstocks and biomass. It can be deployed across a broad spectrum of feedstock resources in plantation forests in the Americas, throughout Asia, and more specifically, in Malaysia and New Zealand. Suitable feedstocks include wood chips from eucalyptus, poplar, mesquite and willow, and especially empty fruit bunches from oil palm. The company’s technology produces new and profitable products for plantation owners, without disrupting the existing and proven methods for growing, harvesting and processing oil palm. The technology allows for the generation of multiple lignochemicals from oil palm waste, enabling owners and operators to diversify their revenue streams. Pure Power’s technology targets the global petrochemical market in providing substitute products based on renewable sources of lignocellulosic biomass, using a proprietary extraction process to produce high value lignochemicals from oil palm waste. Pure Power’s approach is founded on the simple principle of processing hardwood gently, leaving the long polymer molecules intact so that they can be used as chemical building blocks for high value applications.

Keyword(s): BIOMASS; OIL PALM WASTE; REVENUE OPPORTUNITIES; LIGNOCHEMICALS; USES AND BY-PRODUCT UTILIZATIONS

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Article Info

Vol 10 No.2 (2010) p1-16
India’s Oils and Fats Policy: Production of Oilseeds towards Self-sustaining Level
Punia MS

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Abstract


India’s Oils and Fats Policy: Production of Oilseeds towards Self-sustaining Level

India is one of the largest producers of oilseeds in the world with a wide range of oilseed crops grown in different climatic zones. India accounts for an estimated production of about 28 million tonnes of nine cultivated oilseeds during the year 2007/2008, contributing about 6%-7% of the
world’s oilseed production. Domestic vegetable oil production is about 8.2 million tonnes, which is not sufficient to meet local requirements because domestic consumption of edible oils is about 12.5 million tonnes. The deficit is met through imports, mainly refined, bleached and deodorized (RBD) palm oil from Malaysia and Indonesia. The surge in edible oil consumption is due to the increased purchasing power of the middle class, and the removal of the import duty. India has been the biggest driver of consumption growth this year. After the removal of import duty, we can state that the Indian vegetable oil market has integrated with the world market. Vegetable oil imports increased sharply due to a fall in prices of edible oils worldwide, while the zero import duty has encouraged the vegetable oil importers. Importers and traders imported oils in large quantity in anticipation that the government may re-impose the import duty at about 20% from zero percent, perhaps building up stocks with a view to making quick profits. Groundnut, rapeseed/mustard, sesame, safflower, linseed, niger and castor are the major traditionally cultivated oilseeds. Soyabean and sunflower have also assumed importance in recent years. Coconut is the most important amongst the plantation crops. Efforts are being made to grow oil palm in some of the states. Among the non-conventional oils, rice bran oil and cottonseed oil are the most important. In addition, oilseeds of tree and forest origin, which grow mostly in tribal inhabited areas, are also a significant source of vegetable oils.

Keyword(s): OILSEEDS; OILS AND FATS INDUSTRY-India; IMPORT DUTY; SELF-SUSTAINING

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Article Info

Vol 10 No.1 (2010) p35-42
An Analysis of Indonesia’s Palm Oil Position in the World Market: A Two-stage Demand Approach
Amzul Rifin

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Abstract


An Analysis of Indonesia’s Palm Oil Position in the World Market: A Two-stage Demand Approach

Indonesia and Malaysia are the major producers of palm oil in the world. Together they contribute almost 87% of the world production in 2007, while in the export market, they contribute 91% of the world palm oil export. This article analyses Indonesia’s palm oil position in the world market. A two-stage demand equation was constructed. The first equation analysed the world demand without considering the source of the product. Meanwhile, the second equation considered the source of the product using the almost ideal demand system (AIDS) approach. Considering the stationarity of the data, the error correction mechanism (ECM) was employed. The result shows that the increase in the world demand for palm oil is mostly contributed by the increase in world income. In addition, palm oil products from Indonesia and Malaysia are complementary to each other rather than competing.
Therefore, both countries should co-operate in order to increase the world demand for palm oil in the future.

Keyword(s): PALM OIL INDUSTRY-Indonesia; WORLD MARKET; TWO-STAGE DEMAND EQUATION

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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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