Disclaimer

our palm oil land in johor

produces high-quality oil

We have several other pieces of land in several areas all over Malaysia and we intend to purchase more lands. These lands are currently agriculture lands with palm oil plants which are still producing yields. However, we are looking for suitable partners to joint venture to develop the lands.

Mukim Sri Menanti, Daerah Muar, Negeri Johor

OIL PALM IN MALAYSIA

Oil palm (Elaeis guineensis) was first introduced to Malaysia as an ornamental plant in 1870. Since 1960, planted area had increased at a rapid pace. In 1985, 1.5 million hectares were planted with palm tree, and it had increased to 4.3 million hectares in 2007. It has become the most important commodity crop in Malaysia. As of 2011, the total planted area was 4.917 million hectares.

The oil palm planted currently is the tenera hybrid which yields about 4.0 t of palm oil per hectare, together with 0.5 t palm kernel oil and 0.6 t palm kernel cake. Oil palm has an economic life of about 25 years. The harvesting of the palm could begin 30 months after field planting.

The palm fruit is about the size of a small plum and is borne in large bunches weighing between 10 kg – 50 kg. A bunch can have up to 2000 fruits, each consisting of a hard kernel (seed) within a shell (endocarp) which in turn is surrounded by a fleshy mesocarp. The mesocarp is made up of about 49% oil and about 50% kernel.

The two oils (palm oil and palm kernel oil) have very different compositions. Palm oil (from the mesocarp) contains mainly palmitic acid (C16:0) and oleic acid (C18:1); the two most common fatty acids in natural oils and fats, and is about 50% saturated. Palm kernel oil is more than 80% saturated and contains mainly lauric acid (C12:0)

PRODUCTION OF PALM OIL AND PALM KERNEL OIL

Palm oil production in Malaysia has increased over the years, from 4.1 million tonnes in 1985 to 6.1 million tonnes in 1990 and to 16.9 million tonnes in 2010. It reached 18.9 million tonnes in 2011. The production is projected to reach 19.4 million tonnes in 2012. The Malaysian palm oil industry easily meets the local oils and fats demand, and the excess can be exported. Palm kernel oil production in 1999 was 1.3 million tonnes, and reached 4.7 million tonnes in 2011. Prior to 1970, most of the palm kernel produced was exported. Since 1979, they were crushed locally to produce crude palm kernel oil and palm kernel cake.

Malaysia is now the second largest producer of palm oil in the world; after being overtaken by Indonesia in 2006. Since 1985, palm oil has become the second most consumed oil in the world, after soyabean oil. Malaysia’s share of global production in 1999 was 51% but in 2011, it decreased to 38%.

Table 1 shows the productivity of various oilseed crops in terms of their oil content and oil yield. It is evident that the oil palm is the highest yielding oil crop, capable of producing 4.27 t of palm oil and palm kernel oil per hectare per year.

EXPORTS OF PALM OIL AND PALM KERNEL OIL

Palm oil is the most traded oil in the world. In 2011, its exports reached almost 39.04 million tonnes of which Malaysia’s share was 46%. To add value to crude palm oil and make it ready for human consumption, Malaysian manufacturers have installed the most extensive and efficient refining and fractionation facilities. This had been most successful during the years of 1974 to 1999, when the exports of processed palm oil grew from 0.9 to 8.9 million tonnes. In 2011, Malaysia’s export of palm oil rose to 17.99 million tonnes, after reaching a high of 16.66 million tonnes in 2010. Similar trend in export of palm kernel oil was seen in the same period, with the volume reaching 1.17 million tonnes in 2011.

Malaysia's Palm Oil Supply and Demand Updates for 2019

The year 2018 has indeed been a challenging year for the Malaysian oil palm industry with lower palm oil production, exports and prices, but finishing with higher palm oil closing stocks. Crude palm oil (CPO) production in 2018 recorded a decline by 2.0% to 19.52 million tonnes as against 19.92 million tonnes recorded in 2017. The decline was due to lower FFB yield, down by 4.1% to 17.16 tonnes per hectare as compared to 17.89 tonnes per hectare achieved in 2017. In the global market, weaker soyabean oil prices had contributed towards lower palm oil prices. Crude palm oil price traded lower by 19.8% or RM550.50/tonne to RM2,232.50/tonne in 2018 as against in 2017. The large CPO price discount as against other major competing oils in 2018 as compared to the previous year had negatively influenced exports of palm oil, but positively influenced exports of downstream products. The strengthening of crude oil prices in particular had boosted exports of biodiesel and oleochemicals. All in all, total exports oil palm products in 2018 was higher by 3.5%, amounting to 24.82 million tonnes as compared to 23.97 million tonnes exported in 2017. However, the weaker palm oil prices had affected palm oil export revenue in 2018. Export revenue for 2018 is expected to reach RM67.74 billion, lower by 12.9% as against RM77.81 billion in 2017. In line with the decline in palm oil exports, closing stocks in December 2018 was higher by 0.48 million tonnes or 17.7% to 3.22 million tonnes vis-à-vis 2.73 million tonnes recorded in 2017. For the year 2019, Malaysian palm oil industry is forecast to perform better as CPO production is expected to recover driven primarily by favourable weather conditions as well as the expansion in oil palm matured area. Apart from that, palm oil prices in the world market is expected to be firmer in 2018 with palm oil demand expected to regain its momentum to generate higher export revenue for the Nation.11