The Oil Palm

Malaysian Palm Oil – Overcoming Challenges to Feed the World

Vegetable oil demand is expected to reach 230 million tonnes by 2022, driven by a world population that is projected to reach 7.7 billion by that time. Palm oil, the world’s most land efficient oilseed, is expected to contribute 100 million tonnes by that time, from a total supply of 52 million tonnes today. Amid these forecasts issued by Asia Plantation and the US Department of Agriculture, environmental activists present a false choice where palm oil expansion is unnecessary.

Opponents of palm oil expansion should take note of the recent reports of the international vegetable oil market, where demand for palm oil is increasing at a steady pace. Projected yields of sunflower are falling while rapeseed and soy oils are expected to grow modestly, increasing the demand for palm oil by 3.2 million tonnes (53.9 million tonnes in total compared to 50.7 million tonnes in 2011-2012). “Global dependence on palm oil will rise significantly in the next 12 months to compensate insufficient supplies of other vegetable oils,” Oil World was quoted as saying in the report. These conditions require greater investment in palm oil production and expansion, as increasing demand continues to require ever greater supplies.

In Malaysia, this is both an opportunity and a challenge. The palm oil industry has been an important source of economic development and poverty alleviation in the country, generating more than RM80 billion in revenue from exports in 2011 alone. International demand has benefitted Malaysian producers, and contributed to the growth of the vibrant palm oil sector. However, attacks by environmental organizations continue unabated, seeking to undermine consumer markets and isolate the palm oil industry. And a labor shortage risks undermining decades of advances for increasing yields and improving cultivation practices.

Recognizing these challenges, oil palm plantation company United Malacca Berhad (UMB) is establishing a professorial chair in oil palm plantation management at Universiti Putra Malaysia (UPM) to spur research and development. Through such initiatives, UMB hopes to train the next generation of industry leaders to continue translating innovation and research into profitability and increased efficiency in the plantation sector. Doing so will not only benefit small farmers and plantation operators, but consumers throughout the world.