Bigger concerns for palm oil

Last Updated on Oct. 12, 2018, 12:18 p.m.

THE Malaysian palm oil industry is at a crossroads. In terms of production, it is already reaching its limits. Except for Sarawak, there is no more land left to expand cultivation.

Even in Sarawak where the opening up of new areas is facing constant criticisms from rainforest conservationists, expansion is difficult. Fortunately, the Sarawak government is not bowing to such pressure.

Elsewhere in the country, despite the fact that there is no more land for expansion, the crop is still blamed for deforestation. This is understandable because palm oil is an easier target than illegal logging. Targeting palm oil also creates stronger sympathy among donors. Throw in the orang utan, and the picture is perfect for raising funds.

I liked a recent article on palm oil written by a friend, Mahbob Abdullah. A man with many years of plantation experience, he described with interesting clarity the confusion created by the recent announcement to curb further expansion of palm oil cultivation.

On many occasions in the past, we used to travel together on palm oil missions. I have always admired the way he handled tricky questions about palm oil at the many seminars held in the importing countries.

Yes, the practice of ridiculing palm oil is not new. Everywhere we went, many were not familiar with palm oil, an oil which many have come to accept as one which has disrupted the global edible oils market. Most of the other oils have been rattled by the appearance of palm oil mainly because of its competitive nature – extremely high yielding and very versatile in applications.

In the earlier days, the first line of attack was on its nutrition; it was claimed to be bad for health and so on. But once the science proved otherwise, there was a visible retreat in the health attack.

The biggest turn of events was when findings on the dangers of trans fats became facts in the US market. All of a sudden, the US import of palm oil jumped. This was mainly to replace the massive consumption of hydrogenated soya fats in their margarines and shortenings.

Nutritional scientists came up with very conclusive and disturbing evidence which put the blame on trans fats as the main culprit for the high incidence of heart-related diseases in the United States. The findings were later endorsed by the Food and Drug Administration (FDA) and the eventual mandatory labelling law on trans fats expanded the market openings for palm oil. Competitors became even more rattled.

Having lost the battle on the nutrition front, competitors turned to the environment to discredit palm oil. With issues such as sustainability and climate change hogging the headlines, this proved an opportune moment to launch another line of attack against palm oil. Many others who saw the economic opportunities coming from the issue joined the bandwagon.

Sustainability is a big issue in the developed West. Soon, through intense lobbying, governments in the West were influenced to resort to changing trade regulations inciting the consequent pressures on the palm oil trade.

As alluded to by Mahbob, expansion is now at the bottom of the list of priorities for the Malaysian palm oil industry. Instead, they are now more concerned about the constant bouts of low prices and the difficulty in recruiting sufficient labour for harvesting.

Palm oil smallholders are especially badly affected by the depressed palm oil pricing. It hurts them most when the prices drop below production cost. The fact that smallholders’ productivity is generally low makes things worse.

Their productivity levels are usually low because smallholders are comparatively inferior at using technology. Their agronomic practices, including manuring and weeding, are not as good as the plantation boys.

On their part, the plantation companies’ major concern is the availability of labour. Millions in revenue have been lost because much of the oil palm fruits cannot be harvested on time. Most are left to rot because of lack of manpower.

Traditionally, most of the harvesters are from Indonesia. With the improving wage conditions in their own country, it is becoming more difficult to attract them here. So, to those who like to harp on the issue of deforestation, it is wise to get your facts right.


Fellow Academy of Sciences Malaysia

UCSI University


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