EU’s Renewable Energy Directive: Possible Implications on Malaysian Palm Oil Trade

Concerns about high oil prices, energy security and increasing import costs have encouraged the development of biofuel programmes worldwide. Brazil, the European Union (EU) and USA are among the countries that have launched significant biofuel programmes as a means of reducing their dependence on imported oil. In Asia, since 2006, biofuel policies have been considered as they have impact on energy security, employment and income. However, with countries pursuing various programmes on biofuel, questions of sustainability of feedstocks, deforestation and competition with food uses have led to stricter rules and regulations being drafted in the importing countries, these also affecting the vegetable oils trade. This article attempts to assess the new EU’s Renewable Energy Directive and their possible implications on the vegetable oils trade, especially that of palm oil.

Future Competitiveness of the Malaysian PKE

The Malaysian palm kernel expeller (PKE) competes with various oilmeals in the world market, particularly as an animal feed. It has a competitive advantage over other oilmeals due to its consistent supply and competitive price. However, increasing production and export of other oilmeals coupled with changes in meat preferences worldwide are affecting the competitiveness of Malaysian PKE. Future development in the world livestock market will play a pivotal role in spearheading the future competitiveness of the Malaysian PKE.

The Malaysian Palm Oil Supply Chain: The Role of the Independent Smallholders

The Malaysian palm oil industry is made up of interrelated sectors that produce various palm products for their end-users. To ensure an efficient supply chain, all sectors should operate efficiently; this includes the independent smallholders. An efficient production system by the smallholders is deemed necessary in producing quality fresh fruit bunches (FFB) which can then produce quality palm oil for meeting the rising global demand. Inefficiencies can affect the whole supply chain. This article investigates the efficiency level of this sector and the structural changes that it has undergone. It was found that there is plenty of room for improvement among independent smallholders to increase their FFB yield and income so that their future can be sustained.

Chemical Weed Control in the Oil Palm Sector with Particular Reference to Smallholders and Nursery Operators

This article attempts to assess the impact to the oil palm smallholders and the nursery operators when there is a change from using paraquat to other kinds of weed killers in the oil palm and nursery areas. Surveys via face-to-face interviews with independent smallholders and 56 nursery operators were conducted. The study found that the impact of paraquat was insignificant among the smallholders, with only 0.65%, 1.30% and 0.32% having problems related to skin, nose bleeds and nails, respectively. The cost comparison of spraying herbicides in the smallholders’ areas revealed that RM 221/ha/yr was incurred when using paraquat while RM 365/ha/yr was spent with the use of Round-up. At the nursery, annual spraying using paraquat and Basta incurred costs of RM 492.74/ha and RM 763.44/ha, respectively. The study revealed significantly that both the smallholders and the nursery operators were knowledgeable about the danger and handling of herbicides. Paraquat was the most preferred herbicide because it neither reduced the productivity of the oil palms nor affected the growth of the oil palm seedlings. It was also claimed that the use of paraquat helped to improve the texture of the soil. This indirectly led to efficient uptake of fertilizers and hence increased productivity of the oil palms.