THE RM297mil grant allocated under Budget 2011 to encourage the
replanting of old palm trees reflects the strong concern by the
Government over the stagnating palm oil yields within the plantation
sector over the past two decades.
Malaysia currently has some
365,000ha of oil palm land above 25 years of age, which many industry
observers blame for putting a lid for strong yields within the sector.
Therefore, the greatest challenge for plantation players would be to improve oil palm tree productivity per unit land area.
will help ensure the continued increase in the national crude palm oil
(CPO) production, which will help meet increasing world demand for the
world’s most tradeable vegetable oil.
Since Malaysia no longer
has the luxury of land for expansion or planting, the best alternative
would be an in-situ improvement of oil yield per hectare, which has been
stagnating at around four tonnes per hectare.
At the same time,
it is necessary to put in measures to increase the breeding and supply
of high-yielding planting materials. This points to the need for a
national replanting policy to encourage replanting with high-yielding
While the RM297mil grant for replanting may seem positive
as it would boost the domestic palm trees age profile in the future,
some were doubtful over the rapid acceleration of replanting especially
with the current bullish CPO pricetrading at about RM2,900 per tonne,
its highest level so far this year.
Industry observers said
smallholders, which represent 52% of the country’s total palm oil
production, would be reluctant to cut down their aging palm trees and
undertake replanting with high quality new clones.
In 2008, when
the Government provided a replanting subsidy of RM1,000 per hectare, the
country only achieved 31%, or 139,000ha, out of its earlier replanting
target of 200,000ha.
More recently, Malaysian Palm Oil Board
director-general Datuk Mohd Basri Wahid had said that the country “may”
only be able to replant some 80,000ha of oil palm this year.
At the same time, many are questioning on how the replanting fund would be distributed between the estates and smallholders.
to a veteran oil palm planter, the need for a replanting grant is
greater or more urgent in the smallholder sector as they need to
efficiently produce higher-yield crops to enable the commodity to remain
competitive both locally and abroad.
For the big boys in the
plantation sector, their replanting is an on-going exercise as theyhave
adequate financial provision. Nevertheless, at times of high palm oil
price, even major estates players may be induced to delay replanting of
older trees for short-term gain.
Given the top priority to
restore Malaysia’s stagnating palm oil yields, all parties concerned –
namely the estate holders and smallholders – should willingly support
the Government’s noble intention to improve the palm oil national