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Thursday, 07 Mar, 2019

Malaysian palm oil yields on alarming downtrend: Mielke

KUALA LUMPUR (March 6): Malaysian palm oil yields have been on an alarming declining trend for nine years, mainly due to mismanagement which led to lack of replanting, as well as rising labour and fertiliser costs, said an expert.

ISTA Mielke GmbH executive director Thomas Mielke said currently, 1.1 million to 1.2 million hectares, or about 20 percent of oil palm estates in Malaysia, are 20 years or older.

“The replanting of 90,000 hectares of oil palms on average per year in Malaysia over the past five years was also not enough to improve the yield,” he said at a plenary session in conjunction with the three-day Palm and Lauric Oils Price Outlook Conference & Exhibition 2019 (POC2019) here today.

Mielke said Malaysia would need to replant at least 250,000 hectares of oil palms yearly for the next five years to keep the palm oil industry attractive.

“The government could set up a task force comprised of experts to advise the smallholders on replanting issues,” he said, adding that a tax exemption could also be provided to industry players as a means to support them.

Mielke pointed out that the crude palm oil (CPO) futures on Bursa Malaysia are expected to improve to between RM2,350 to RM2,450 a tonne in four to six months, up from the benchmark May trading month’s value of RM2,152 per tonne, due to the strong demand worldwide.

“Global dependence on palm oil is rising in 2019, particularly with higher import needs from China and India,” he said.

Meanwhile, Mielke said Malaysian CPO production is set to rise by 600,000 tonnes to about 20.1 million tonnes this year, after a drop of 400,000 tonnes last year, while global palm oil output is anticipated to hit 75.26 million tonnes this year from 72.48 million tonnes last year.

“The world’s consumption of CPO is expected to increase by 6.2 to 6.5 million tonnes this year,” he added.

Source : The Edge Markets

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