In 2009, exports of palm oil products declined by 24 per cent to RM49.59 billion compared with RM65.2 billion previously. The decline was attributed to lower average crude palm oil (CPO) price of RM2,244.50 last year compared with RM2,859.50 recorded in 2008.

However, in terms of quantity, the export of palm oil products comprising palm oil, palm kernel oil, palm kernel cake, oleochemicals, biodiesel and finished products, grew by 2.9 per cent to 22.40 million tonnes last year from 21.76 million tonnes in 2008.

China remained the biggest importer of Malaysian palm oil with demand from China increasing 6.3 per cent to 4.03 million tonnes from 3.79 million tonnes in 2008.

“This accounted for 25.4 per cent of total palm oil exports from Malaysia,” he said in his keynote address at the ‘Reach and Teach Friends of the Industry: Challenges and Opportunities in 2010″ seminar, here..

He also said other markets such as India and Pakistan saw a significant increase in the import of palm oil at 38.7 per cent and 39.8 per cent respectively.

However, European Union and United States registered a decline in imports in 2009 by 7.7 per cent to 1.89 million tonnes and 18 per cent to 859,400 tonnes respectively.

In order to retain demand for palm oil products, serious attention must be accorded to enhance productivity, he said.

“There is a constraint in further expanding the current planted area of 4.67 million hectares. The maximum planted area that could be utilised for palm oil is estimated at around 5 million hectares,” he said.

Explaining further he said, the industry should crystallise the approach whether the country should resort to the use of clonal materials as a way forward towards enhancing productivity.

“While there may be constraints in the form of supply, it is pertinent that the industry suggest ways where the government could consider including utilising availale resources in Malaysian Palm Oil Board,” he added.

Dompok also urged the plantation companies to adopt the independent smallholders as part of their corporate social responsibility as it would furthr increase the national productibity.

He added Malaysia needed to reduce dependency on foreign labour.

“As of July 2009, this sector has registered a total employement of 218,000 foreign workers, with majority coming from Indonesia.

He said it is pertinent for Malaysia to accelerate work to brand Malaysian palm oil which will also contribute towards reducing unfounded allegations and provide assurance to the buyers besides enhancing productivity.

In achieving the export earnings of more than RM100 billion by 2020, he said the ministry will be organising a lab with the industry in March to take stock on the progress made, short falls and new measures necessary to propel the industry.