Palm Oil Highly Sought Globally Due To Chronic Shortage

Expanding economies and rising population leading to a chronic shortage of oil and fats will continue to make Malaysia palm oil a highly sought after edible oil in the global arena.

Although palm oil accounts for 34 per cent of the global output of 160 million tonnes oil and fats, it is stil not enough to meet the high demand from importers, said Malaysian Palm Oil Council (MPOC) Chief Executive Officer Tan Sri Dr Yusof Basiron.

He said the situation was made more acute by the fact that the only other major producers besides Malaysia was Indonesia followed by Argentina at a distant third to serve world oils and fats demand especially from the food sector.

"Palm oil is occupying a very dominant role in the consumption of edible oils in the world, the world is short of edible oils," he told a roundtable discussion on palm oil industry hosted by BERNAMA.

It was moderated by Bernama Editor-in-Chief Datuk Yong Soo Heong, Puan Salbiah Said, Bernama Deputy Editor-in-Chief in-charge of Bernama Economic Service and Cik Siti Hawa Othman, an Assistant Editor with Bernama Economic Service.

Dr Yusof said almost 80 per cent of the country's palm oil output was exported and dedicated for serving the food industry in making margarine, shortening, fat cooking, while another 20 per cent have been diverted for oleo chemical or non-food use.

"It is the major economic sector of our country and main export earner. Last year, we raised RM50 billion in revenue and this year, I want to suggest more than RM50 billion probably RM55-RM60 billion as the price was likely to be higher as shown in the first two months.

"Last year, we produced 17.5 million tonnes and we are anticipating anywhere within that figure to 18 million tonnes this year," he said.

Dr Yusof said MPOC was aware of the huge multiplier effect contributed by the industry in terms of employment, where almost half a million people were working in the industry, but there were still labour shortages in areas such as harvesting and other related activities.

He said additional workforce was required to run downstream processing industries as the council regarded oil palm as a multi-commodity industry.

From palm oil, the industry produces palm kernel oil and palm kernel cake, which are different oils, along with a different market and applications and then there are other industries like oleo-chemicals which export soap, makes detergents and bio-diesel.

"The new industries coming in include biomass and methane to make electricity which can be connected to the national grid. Now, we are beginning to harvest the oil palm trees and trunks for furniture, exporting to more than 70 countries," Dr Yusof said.

Currently, there are 600 million oil palm trees in the country that could be harvested and converted into fibre products including medium density fibre boards as well as pulp and paper which are now beginning to be popular.

"Put all this together, palm oil is a very important and vibrant industry, which makes a lot of money for the country and makes us probably prosperous, which is a contribution from the agriculture sector no doubt," he said.