PALMOILMAGAZINE, KUALA LUMPUR – Malaysia’s palm oil industry is entering a decisive phase. With virtually no land left for expansion, future growth will depend entirely on productivity gains driven by technology, mechanisation, and artificial intelligence (AI). The shift was underscored by the Malaysian Palm Oil Board (MPOB) amid tightening global sustainability pressures.
MPOB Director General Ahmad Parveez Ghulam Kadir said conventional business practices are no longer viable. Sustainability regulations such as Malaysian Sustainable Palm Oil (MSPO) 2.0 and the European Union Deforestation Regulation (EUDR) have effectively closed the door on new plantation development.
“There is no more room to open land. Productivity must now come from technology, mechanisation, and better planting materials,” Parveez said during a group interview on the sidelines of the International Palm Oil Congress and Exhibition 2025 (PIPOC 2025), as quoted by Palmoilmagazine.com from the New Straits Times on Saturday (January 3, 2026).
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He explained that Malaysia’s palm oil sector has long faced structural challenges, including stagnant yields, slow replanting, an ageing tree profile, and chronic labour shortages. Over the past two decades, national productivity has largely plateaued, even as crude palm oil (CPO) output this year is projected to reach around 19.5 million tonnes.
“Our oil palm trees are now in their fourth generation after more than 100 years of cultivation. Yields are stagnant and replanting is slow,” Parveez said. “With land constraints, the only way forward is to maximise productivity.”
Rising palm oil prices in recent years—especially during the pandemic—have accelerated plantation companies’ investments in automation. Labour shortages, he added, have made innovation no longer a choice, but a necessity.
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According to Parveez, a growing number of companies are deploying AI, drones, satellite imagery, and mechanised tools to manage plantations with greater precision. Kuala Lumpur Kepong Bhd, for example, uses satellite data for replanting plans, contour and soil analysis, and determining seed varieties and fertiliser regimes.
Drone technology and imaging systems are also being used to detect pests such as bagworms, mealybugs, and rhinoceros beetles early, before infestations spread. MPOB itself established the Mechanisation and Automation Research Consortium of Oil Palm in 2021 to accelerate technology adoption across the industry.
Global pressures are also shaping the transition. Demand for vegetable oils continues to rise worldwide, while major producers such as Indonesia are increasingly diverting palm oil to non-food uses, particularly biodiesel under the B50 blending mandate.
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“If Indonesia channels more palm oil into non-food sectors, Malaysia must be ready to fill the gap in the global market. But since we cannot expand land, we must optimise what we already have,” Parveez said. “The key lies in better genetics, effective replanting, and the use of technology.”
Responding to Global Negative Narratives
The productivity drive is unfolding amid persistent negative narratives about palm oil in Western markets, especially concerning deforestation and biodiversity loss. MPOB Chairman Mohamad Helmy Othman Basha said Malaysia’s position differs from Indonesia’s in terms of domestic palm oil absorption.
“Indonesia has a large population and can absorb palm oil for biodiesel without disrupting exports. Malaysia is different—we are highly dependent on export markets,” he said.
Helmy also rejected claims that Malaysian palm oil expansion is a major driver of global deforestation. He noted that oil palm plantations account for only about 8.5% of total global oil-crop land, or roughly 28 million hectares—far smaller than soybeans, rapeseed, and sunflower, which together cover about 288 million hectares.
Despite using relatively little land, palm oil supplies around 37% of the world’s vegetable oil. Oil palm plantations occupy only about 0.6% of the world’s total land area, estimated at 4.8 billion hectares.
“Palm oil remains the most efficient and productive vegetable oil. It is rich in tocotrienols and vitamin E, and is increasingly replacing petrochemical-based materials, including in the cosmetics industry,” Helmy concluded. (P2)
