PALMOILMAGAZINE, KUALA LUMPUR – Palm oil-producing nations like Indonesia and Malaysia must come together to address the looming crisis facing the industry. Industry experts warn that palm oil could become a scarce commodity in the future due to various factors, including declining production, reduced harvests, and decreased purchases from India, the world’s largest importer of vegetable oil.
Projections for Indonesia’s 2024 palm oil production indicate a decrease of at least one million tons compared to the previous year, while Malaysia’s production may remain stagnant.
Analysts, including Dorab Mistry from Godrej International, highlight concerning issues such as the impracticality of land expansion, aging plantations, diminishing harvests, and technological stagnation in the palm oil industry compared to global advancements.
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Vice General Secretary of Council of Palm Oil Producing Countries (CPOPC), Datuk Nageeb Wahab acknowledged that production development in Indonesia is not enough while in Malaysia, there is no significant progress. “Otherwise, the demands on palm oil keep increasing 3,5 percent per year. This would potentially encourage the future increasing price,” he said, as quoted from New Straits Times, Tuesday (23/4/2024).
The unavailable new areas to expand palm oil plantations also raise the needs on oil extraction method more efficiently from nowadays available plantations by escalating replanting frequency. But the lack of investment to replanting program made palm oil production hit the full potential.
CEO Westbury Group, Abdul Rasheed JanMohammad noted that Malaysia lost its markets in Indonesia because of cheaper palm oil. Pakistan now purchases it to Indonesia to fulfill its palm oil needs. Meanwhile India could increase soyoil purchase that could influence crude oil price in the future.
To face the challenges, Nageed encouraged CPOPC to collaborate rather than competing. “When palm oil production is not enough, we should help one to another,” he said.
Thomas Mielke of ISTA Mielke GmbH (Oil World) emphasized that it is significant to accelerate replanting program in Malaysia to get solution on old trees. He also mentioned that the markets would get other alternative if the situation has no solutioin that would potentially enocourage palm oil get more expensive because of the increasing demands in the future. (T2)
