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Last Updated: 26 January 2024

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KUALA LUMPUR (Jan 24): Palm oil output in Malaysia, the number two supplier, could rise 5% this year after the government allowed plantations to hire foreign workers, said Joseph Tek, chief executive of the Malaysian Palm Oil Association.

The admission of new workers potentially means that an additional 5.2 million tonnes of fresh fruit bunches can be harvested, the top growers’ group said in a statement. That translates into 1 million tonnes of crude palm oil, Tek said.

The extra tonnenage would also generate revenue of close to RM4 billion, bringing “significant relief” to the industry, which is grappling with a substantial shortage of 40,000 workers, the group said. The news pressured benchmark palm oil futures in Kuala Lumpur trading.

The government has been trying to reduce reliance on cheap foreign labor across many industries including manufacturing, construction and plantations, and seeks to regulate admission processes to prevent any issues like forced labor, worker exploitation and human trafficking.

In March last year, the country temporarily suspended the application and approval process for foreign workers under a quota system in order to speed up the entry of workers already approved.

Chronic shortage

Malaysia’s palm oil industry is heavily reliant on foreign labour. A chronic shortage of workers resulted in revenue losses estimated at RM20 billion in 2022 and continued to curb growth in output last year.

Palm oil production in Malaysia totaled 18.55 million tonnes in 2023, and earlier this month the Palm Oil Board, which regulates the industry, predicted output of 18.75 million tonnes for this year. That’s less than half the supply from top producer Indonesia, where output has expanded steadily in recent years.

The association represents over 40% of the oil palm area in Malaysia. Members include some of the top plantation companies such as Sime Darby Plantation Bhd, Kuala Lumpur Kepong Bhd, IOI Corp and FGV Holdings Bhd.

Palm oil futures in Kuala Lumpur climbed as much as 0.9% to RM3,985 a tonne on Wednesday, before paring gains to RM3,955 by midday.

The higher output estimate is capping the rally, said Gnanasekar Thiagarajan, head of trading and hedging strategies at Kaleesuwari Intercontinental. The move to allow more foreign workers “adds to supply woes,” he said.

https://theedgemalaysia.com/node/698490

Sumber : The Edge Malaysia

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Last Updated: 26 January 2024

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BANGI: The government, through the Ministry of Finance and Agriculture and Commodities Ministry, has established a special fund for the Smallholder Palm Oil Replanting Financing Incentive Scheme (TSPKS 2.0). 

Plantations and Commodities Minister Datuk Seri Johari Abdul Ghani said the scheme, which involves an allocation of RM100 million, will be fully distributed by Agrobank for the replanting of oil palm, specifically benefiting palm oil entrepreneurs and individual smallholders.

Applications are open starting from Jan 15 and the forms can be obtained from any nearby Tunas/Agrobank office in the smallholder's area. 

"The provided funds consist of a grant component (50 per cent) and another part is financing (50 per cent) for individual smallholders.  

"The disbursement of funds for both the grant and financing components will be entirely handled by Agrobank.  

"However, the repayment by applicants will only involve 50 per cent (including two per cent interest) of the total disbursed amount.  

"This initiative aims to benefit private small oil palm planters with a total land area of 5900 hectares," he said at a press conference during the Malaysian Palm Oil Board's Excellence Awards 2023 in Bangi today. 

According to Johari, the financing amount is RM14,000 per hectare for small oil palm planters in Peninsular Malaysia, and RM18,000 per hectare for small oil palm planters in Sabah and Sarawak.  

The financing is in a combination of grants and funding for the following activities, namely the preparation of planting areas, purchase of high-quality oil palm seedlings, and the maintenance of the plantation until the oil palms reach three years of age (36 months) after planting. 

On that note, Johari said the government is committed to ensuring the long-term economic viability of the palm oil industry. 

He added that his ministry's main focus has been to engage with all stakeholders in this sector to identify and address specific issues affecting the country's palm oil performance. 

"Besides labour, a primary focus for industry players, issues such as plantation management, palm replanting, and timely fruit harvesting are emphasised.  

"Research and development (R&D) efforts have the potential to enhance the overall productivity of the palm oil industry.  

"Furthermore, mechanisation and automation can improve labour efficiency and overall productivity," he noted. 

Johari also highlighted that the global demand for palm oil is expected to increase with the growing world population.   

He said considering limited resources, Malaysia, as the world's second-largest palm oil producer, must seize this opportunity by enhancing productivity and production.   

"The global food security issue urges countries like Malaysia to boost productivity in agricommodity production to meet the rising demand," he said.

https://www.nst.com.my/business/corporate/2024/01/1004953/malaysia-sets-rm100mil-fund-smallholders-replant-palm-oil

Sumber : New Straits Times

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Last Updated: 23 January 2024

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M.P. Evans Group, a Kent-based producer of sustainable Indonesian palm oil, has shared promising figures for the year ended 31st December 2023.

Production of crude palm oil (CPO) was up 11 per cent from 2022 at 378,500 tonnes, while palm kernel production rose 9 per cent to 80,600 tonnes.

The group enjoyed unusually high pricing for CPO in 2022 which has since flattened out to £575 per tonne, around 15 per cent lower than before.

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But this hasn’t dampened cash inflows, as the company was able to add another 10,000 planted hectares to its portfolio and pay out more than £22m in dividends over the past year.

Peter Hadsley-Chaplin, chairman of M.P. Evans, said: “The group made another stride forward in 2023, with crop and production both increasing.

“Importantly, following a period of significant investment, almost all crops are now processed in group milling facilities.

“We’re starting to see the benefits in increasing extraction rates, and this will provide further support to what will be a strong result for 2023.

“Looking to the future, the group has delivered on its stated aim of adding further hectarage close to its existing projects, which will support further growth into 2024 and beyond.”

https://thebusinessmagazine.co.uk/corporate-finance/production-and-hectarage-on-the-up-for-kent-palm-oil-business-m-p-evans/

Sumber : The Business Magazine

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Last Updated: 23 January 2024

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LETTERS: Though Malaysia has growth potential in the palm oil industry in terms of revenue generation, there is declining productivity due to shortage of labour, delayed application of fertiliser, climate change and increasing mechanisation.

While the government has a vision for the industry, the structure and research and development efforts are still scattered compared with Indonesia.

The New Energy Road Policy and Biomass Action Plan have articulated the government's initiatives to develop the biomass industry.

These plans underline the importance of establishing infrastructure, including transportation networks and storage facilities.

Experts recommend the implementation of a circular economy and the establishment of biomass hubs to boost the revenue stream in the palm oil industry.

A circular economy involves incorporating current practices and exploring alternative solutions to address challenges.

This approach could prompt the authorities to establish governance structures to capitalise on industry revenue, which is anticipated to be substantial.

Moreover, adopting a circular economy can enable the nation to generate high-value products for the top 12 value-added chemicals that have not yet been fully commercialised, apart from creating jobs.

The environmental safeguard measures were featured at COP28 (the 28th United Nations Climate Change Conference) in November 2023 and Davos (54th Annual Meeting of World Economic Forum) this month.

The adoption of a circular economy in the palm oil industry will not only boost the economy but also reduce greenhouse gas emissions.

Circular economy principles promote efficient resource use, reducing waste generation in the production process. This includes optimising land use for oil palm cultivation, minimising water usage and optimising fertiliser application.

Instead of disposing of by-products and waste materials, a circular economy encourages their reuse or conversion into resources.

For instance, palm oil mill effluent can be treated to extract biogas for energy production, reducing methane emissions.

Adopting integrated pest management practices reduces the reliance on chemical pesticides, mitigating environmental impact and improving ecosystem health.

Circular economy principles align with the transition to renewable energy sources.

In the palm oil industry, this involves adopting renewable energy technologies, such as solar, wind, and biomass, to power processing plants and reduce dependence on fossil fuels.

Circular economy principles emphasise the importance of consumer awareness and responsibility.

Informed consumers can drive demand for sustainably produced palm oil, influencing industry practices.

Nevertheless, we should be more than inspired as the projected revenue for 2024 for the oil palm industry is RM110 billion, indicating better times with the right action and execution of plans and policies.

https://www.nst.com.my/opinion/letters/2024/01/1003982/palm-oil-sector-must-adopt-circular-economy

Sumber : New Straits Times