Malaysia: Oil palm replanting prioritised to boost yield without expanding land use

Malaysia remains committed to improving oil palm productivity by focusing on replanting efforts rather than expanding cultivated land.

However, the slow progress of these initiatives has raised concerns about the industry’s long-term sustainability.

Plantation and Commodities Minister Datuk Seri Johari Abdul Ghani said in 2024, only 114,000ha, or 2% of the total planted area, were replanted, representing a decline from the 132,000ha (2.3%) recorded in 2023.

He emphasised that this figure remains well below the recommended annual replanting target of approximately 285,000ha, which equates to 4% to 5% of the total plantation area.

Johari said replanting is a crucial issue that requires immediate attention, as it has a direct impact on the industry’s long-term sustainability.

Safeguarding future yields demands an unwavering long-term commitment, one that must commence without delay to fortify the sector’s sustained growth and resilience.

“This is especially important as Malaysia has committed to ensuring that no further deforestation will take place due to palm oil cultivation,” he said at the 36th Palm & Lauric Oils Price Outlook Conference & Exhibition (POC2025) today.

As efforts to accelerate replanting gain momentum, Johari emphasised the importance of ensuring that only high-quality planting materials are utilised in this initiative.

“As many of you know, smallholders remain a significant but vulnerable group in the palm oil industry due to a lack of scale.

“Thus, these individuals may be susceptible to dishonest practices by certain nurseries. For instance, instead of being sold the preferred Dura and Pisifera hybrid (Tenera), they may be given low-quality variants,” he said.

Johari said the government remains committed to safeguarding the interests of the industry and over 450,000 smallholders.

The Malaysian Palm Oil Board (MPOB) will carry out random inspections to ensure nurseries are supplying the correct products. This measure aims to guarantee that only high-quality seeds are used in replanting efforts.

Johari also noted that the global palm oil industry saw several positive developments in 2024.

The average crude palm oil (CPO) price increased by 9.7% to RM4,179.50 per tonne, compared to RM3,809.50 per tonne in 2023, reaching a peak average of RM5,119.50 per tonne in December 2024.

“We have seen a demand boom in this sector due to increasing affluence in developing countries and sizeable youth populations, especially in Africa, as well as South and Central Asia.

“Additionally, higher demand is also driven by Indonesia’s biodiesel mandate, where 25% of the 48 million tonnes of CPO produced in Indonesia is utilised for biodiesel production,” he added.

On the postponement of the European Union Deforestation Regulation (EUDR) to Dec 30, 2025, Johari said it will provide plantation operators, smallholders and businesses along the supply chain with more time to adequately prepare for the regulation’s due diligence requirements.

The delay has been well received and Malaysia is ready to serve as a reliable supplier of sustainable and high-quality palm oil to both European partners and global importers.

“As I have communicated on multiple occasions, Malaysia stands ready to be a trusted supplier of sustainable and high-quality palm oil not only to our European partners but (also) to all our importers worldwide.

“The large companies and estates that manage roughly 73% of the palm oil planted area in Malaysia are well-positioned to comply with the regulations,” he concluded.

Tags: EUDR, price, Indonesia, Crude palm oil, Malaysia, yields, oil palm, Sustainability, productivity