Malaysia to keep zero expansion policy for palm oil

Malaysia will maintain its zero expansion policy for palm oil plantations, focusing instead on replanting, productivity gains and research-driven applications to support the industry’s long-term sustainability and export earnings.

Plantation and Commodities Minister Datuk Seri Johari Abdul Ghani said the palm oil sector remains on a steady footing heading into 2026, underpinned by strong global demand, higher-value downstream applications and firm prices, despite the absence of new plantation openings.

“We stop deforestation. We are now focusing on what we already have by increasing yields through good planting material, good agricultural practices and technology,” he told reporters after attending Malaysian Palm Oil Board (MPOB) Awards at its headquarters today.

He said nearly one in four oil palm trees has exceeded its biological prime, making replanting critical to sustaining output without expanding land use. 

“The way forward is replanting, but it must be done in a staggered manner so planters can still maintain income,” he said.

To support this transition, Johari said the government allocates RM100 million annually to assist independent smallholders with replanting efforts, noting that without intervention, declining yields could threaten livelihoods. 

“If we don’t help them, they cannot put food on the table to take care of their families,” he said.

On fiscal measures, Johari said implementing a windfall tax remains challenging as the government continues to subsidise domestic cooking oil consumption. 

“We are subsidising about RM1.4 billion for cooking oil, so the windfall tax is effectively offset by what we give back to the rakyat,” he said.

Johari said palm oil prices remain structurally supported above RM4,000 per tonne, compared with RM1,800 to RM2,000 per tonne in previous years, reflecting stronger demand driven by broader industrial and non-food applications.

He added that continuous research and development by MPOB will remain central to expanding new uses for palm oil globally, ensuring the industry stays competitive while meeting increasingly stringent sustainability requirements.

Tags: replanting, Plantations, зеро, Malaysia, palm oil, deforestation, Sustainability, expansion