Malaysia: Yield swings may shift palm oil output by 5pc

CIMB Securities estimates that every one-tonne-per-hectare change in fresh fruit bunches (FFB) yield could shift Malaysia’s crude palm oil (CPO) output by about 996,585 tonnes, or roughly five per cent, based on the 2024 oil extraction rate of 19.67 per cent.

Malaysia’s average FFB yield stood at 16.7 tonnes per hectare in 2024, translating into a CPO yield of 3.28 tonnes per hectare, according to data from the Malaysian Palm Oil Board (MPOB).

FFB yields fell to 15.47 tonnes per hectare (CPO yield of 3.1 tonnes per hectare) in 2021, the lowest since MPOB began publishing statistics, mainly due to acute labour shortages.

At its peak in 1986, Malaysia recorded 22.15 tonnes per hectare (CPO yield of 4.41 tonnes per hectare).

CIMB Securities said the MPOB attributed the structural decline in yields to labour shortages, reduced fertiliser use, ageing estates, weak management practices and adverse weather, partly linked to climate change. Diseases, such as Ganoderma, are also present, but are considered secondary factors.

To lift yields, the firm said industry players are encouraged to accelerate replanting, adopt harvesting automation, enforce fertiliser quality standards and improve worker training in disease identification.

“Meanwhile, mealybug infestations in Sabah are causing concern, with potential yield losses of 15 to 17 per cent if unmanaged.

“While outbreaks can be controlled through trunk injection treatments, smallholders often lack the necessary resources and capacity.”

On the trade front, palm oil exports fell 10.6 per cent year-on-year in the first eight months of 2025.

Tags: Crude palm oil, Malaysia, yield, output, fresh fruit bunches