MPOB calls for incentives to lift exports

The palm oil industry has called for more targeted incentives and policy support under Budget 2026 to enhance export competitiveness, boost yields and productivity, and strengthen sustainability, according to the Malaysian Palm Oil Board (MPOB).

Its director-general, Datuk Dr Ahmad Parveez Ghulam Kadir, said the government should intensify trade promotion and branding initiatives to position Malaysian palm oil as a sustainable, climate-smart commodity.

“Stronger branding reinforces Malaysia’s commitment to sustainability standards such as Malaysian Sustainable Palm Oil (MSPO) certification and the National Traceability System, which improves transparency and accountability.

“This credibility helps counter negative campaigns in key export markets and assures buyers that Malaysian palm oil meets climate-conscious consumer demand,” he told Bernama.

He said the industry is also seeking fiscal incentives for downstream products, including oleochemicals, specialty fats, bioenergy, and sustainable aviation fuel, describing them as key levers to future-proof the sector against regulatory pressures, shifting consumer preferences, and global sustainability requirements.

“We urge more strategic support for logistics efficiency, including incentives for greener and lower-cost export solutions, to address both immediate cost pressures and long-term market positioning, ensuring that Malaysia’s palm oil industry remains resilient and future-ready,” he added.

Ahmad Parveez said a 100% reinvestment allowance for oil palm replanting should be encouraged to accelerate replanting by both private and government agencies.

“This initiative is expected to increase the oil palm replanting rate from 2.5% (101,809ha) to 5.1% (210,000ha) annually,” he said.

He expressed hope that the government would approve RM280mil in funding for oil palm replanting programmes specifically for independent smallholders.

“Recognising the urgent need to rejuvenate ageing plantations, the government remains committed to supporting independent smallholders and will continue to fast-track the replanting programme under the 13th Malaysia Plan.

“This includes improving delivery mechanisms, facilitating access to financial assistance, and strengthening outreach and engagement with smallholder communities,” he said.

He noted that the introduction of a RM100mil soft loan scheme for small and medium oil palm estates was timely to rejuvenate ageing and unproductive trees, which currently contribute to declining yields and reduced competitiveness.

“Similar to Smallholder Oil Palm Replanting Programme, this scheme would allow smallholders to undertake replanting without heavy financial strain, thereby accelerating rejuvenation across a wider segment of the industry.

“In the medium to long term, this initiative will boost national crude palm oil production through higher-yielding palm varieties and better farm management practices,” he noted.

Ahmad Parveez proposed imposing a 3% export duty on refined, bleached and deodorised palm stearin to discourage excessive exports and ensure sufficient supply for the domestic oleochemical sector.

He said maintaining an adequate domestic supply of raw materials would sustain production and competitiveness while indirectly supporting the palm-based oleochemical industry.

“By strengthening downstream industries, we create a more sustainable and resilient palm oil future, adding higher value locally and safeguarding long-term competitiveness,” he said.

He also suggested imposing a 10% to 20% export duty on waste oils, including used cooking oil and palm oil mill effluent.

This would promote local utilisation and value addition by securing sufficient feedstock for biodiesel, renewable fuels, and oleochemical production.

“Additionally, duties would help reinforce compliance with sustainability and certification standards such as MSPO and International Sustainability and Carbon Certification, which are crucial for both domestic use and export credibility.

“In the longer term, this measure would accelerate Malaysia’s transition towards a circular, greener palm oil industry and strengthen its global competitiveness as a responsible and future-ready commodity.”

Ahmad Parveez added that the Budget 2026 could play a pivotal role in helping the palm oil sector overcome external challenges while fostering growth, productivity and resilience.

He said replanting programmes for smallholders and small and medium enterprise plantations should be expanded, with an emphasis on high-yielding and disease-resistant planting materials.

“The focus should also be on strengthening sustainability compliance through universal MSPO adoption and robust traceability systems.

“Compliance with global environmental, social and governance standards is vital to safeguard Malaysia’s position in international markets.

“Incentives for mechanisation, digitalisation and precision agriculture would further help reduce reliance on manual labour and improve operational efficiency,” he added.

Tags: yields, palm oil, export, Production, Malaysia