Malaysia’s palm oil industry needs replanting to stay ahead globally

Malaysia’s Minister of Plantation and Commodities, Datuk Seri Johari Abdul Ghani, emphasized that replanting ageing oil palm plantations is critical to preserving the country’s position in the global palm oil market. He warned that Malaysia could lose up to RM7 billion in export revenues if replanting rates do not improve. In 2024, the national replanting rate stood at only 2%, compared to the government’s target of 4–5% per year.

To boost replanting, the government is developing a new financial scheme to help smallholders access credit for renewing their plantations. “If the government cannot finance it directly, we will negotiate with banks to allow farmers to take loans using their farms as collateral, and the government will subsidize part of the interest—up to 4%,” Johari said.

The Ministry of Plantation and Commodities (MPC) is currently in discussions with the Ministry of Finance regarding the interest subsidy. Meanwhile, the TSPKS 2.0 hybrid replanting support program—combining 50% grants and 50% loans—continues to operate, with RM100 million allocated for 2024 and another RM50 million for 2025.

Replanting is seen as both an economic and environmental priority, helping to increase yields, improve soil health, and boost productivity without expanding plantation areas.

At the same time, Johari clarified that the U.S. tariffs have had no significant impact on Malaysia’s palm oil production costs. Most inputs for the sector—fertilizers, seeds, and crop protection materials—are sourced domestically, meaning external trade restrictions have not disrupted local plantation operations.

Tags: Malaysia, palm oil