Palm Oil: Nature’s Gift to Malaysia and Malaysia’s Gift to the World

For Malaysia, oil palm is the golden crop that has helped to change the scenario of the Malaysia’s agriculture and the Malaysian economy. In 2007 at 4.17 million hectares, the oil palm performance is compared over the last 90 years from 1917 to 2007 and some projections are made over the next 100 years to 2107. The various phases undergone by the oil palm industry from the pioneering work with the determination to nurture the plant into a crop and to create a home for it in Malaysia, have been marked with several important milestones such as diversification from the over dependence on rubber in the 1950s and 1960s, strong support from well thought-out policies involving use of palm oil as food, fuel, fibre and feed in the 1970s and 1980s, through R&D move into processing and value-adding activities to improve the health and food safety aspects and finally in the 1990s and 2000s to tackle the environmental and sustainability development. The broadening of the scope and horizon for export of oil palm and its products into 11 areas of food, oleochemicals, energy, biomass, biotechnologically improved products, nutraceutical, pharmaceutical, farm machinery, research and advisory services, processing, livestock integration and feed production will strengthen the competitiveness of the Malaysian oil palm products that will take centre-stage in international oils and fats businesses. In so doing, the impact of such massive development of the oil palm has helped uplift the rural poverty, enhance social and economic life, and yet protect the very environmental and ecological bases on which the oil palm thrives. Truly the oil palm is a crop that nature gives to Malaysia and now it has evolved into Malaysia’s gift, thanks to continuous R&D with many innovations, to share the new discoveries on the uses of palm oil and its products with the whole world. In the future, the Malaysian oil palm industry will remain a major reliable supplier of vegetable oil for both food and non-food applications. It must be mentioned that the projections made here after deliberation are the views what the MPOB team members have wished for the industry. For a forecast of a hundred years, the reality will be dictated by events and the rate of progress of R&D.

Recent Developments of Malaysian Palm Oil Stock Level

The level of palm oil stock is a strong indicator of its price and it comprises crude palm oil and processed palm oil. In the past, the palm oil stock has for a long time hovered around 1 million tonnes, and this volume has become the psychological level below and above which prices tend to be bullish and bearish, respectively. The end stock mainly depends on the production and export of palm oil, while imports and local consumption play minor roles. Based on changes in the supply and demand factors, it was estimated that 1.8 million tonnes could be considered as the new level of palm oil stock for the Malaysian palm oil industry.

Management of the Malaysian Oil Palm Supply Chain: The Role of FFB Dealers

The fresh fruit bunch (FFB) dealer sub-sector is part of the Malaysian palm oil supply chain. It is inter-related with other sub-sectors either directly or indirectly. It serves as a intermediary between the smallholders and the millers. FFB dealers need to be efficient so that the FFB sent to the mills within 24 hr after harvesting remain in good quality. Shortfalls may affect the efficiency of the other sectors as well as the whole industry. The study found that the dealers have found ways of making profits and have undergone several structural changes. Despite the challenges, there is still scope for their improvement.

An Overview of Malaysian Palm Oil Market Share in Selected Markets

Palm oil is the leading edible oil traded in the world market. Both Malaysia and Indonesia are the world’s largest exporters of palm oil, commanding more than three-quarters of the world market. In 2007, these countries contributed 83.5% of the production and 89.6% of the world trade in palm oil. Malaysia herself accounted for 47.9% of the production and 57.5% of the trade. However, over the years, Malaysia has been losing her market share to her closest rival, Indonesia. This article attempts to provide an overview of Malaysia’s market share of palm oil in five major markets compared to Indonesia. Apart from describing the share in the various markets in absolute terms, an index was also used as a bench-mark to overview the trend in real terms.