KUALA LUMPUR, Jan 11 ― The Malaysian palm oil industry’s performance is expected to improve in 2024 on the back of better labour supply and stronger price projections.

Malaysian Palm Oil Board (MPOB) director-general Datuk Ahmad Parveez Ghulam Kadir said this year’s crude palm oil (CPO) price is expected to range between RM3,900 and RM4,200 per tonne, driven by the implementation of the B35 biodiesel mandate in Indonesia.

The mandate is expected to reduce the global palm oil supply for the export market, consequently boosting CPO prices.

"Additionally, the global supply of palm oil is expected to be tight due to unfavourable weather conditions in 2023, while soybean production is expected to remain tight at least until April 2024.

"Malaysia palm oil stocks are expected to be below 2.0 million tonnes, thus stabilising the price,” he said during his presentation at the Palm Oil Economic Review and Outlook Seminar 2024 today.

Ahmad Parveez said despite experiencing various challenges domestically and globally, the palm oil industry has successfully met the global demand for sustainable palm oil.

He added that the Plantation and Commodities Ministry, the MPOB and related agencies will continue to work closely not only to address environmental concerns but also to promote economic stability and social responsibilities within the industry, ultimately paving the way for a more sustainable and balanced future.

Meanwhile, he said the RM100 million incentive under the Palm Oil Replanting Programme 2.0 will help around 1,500 oil palm independent smallholders (ISH) to replant old or unproductive trees covering 5,900 hectares (ha) nationwide.

He said the incentives aim to increase smallholders’ income through planting high-quality seedlings as well as implementing Good Agricultural Practices (GAP).

"The incentive value amounted to RM14,000 per hectare for ISH in Peninsular Malaysia and RM18,000 per hectare for ISH in Sabah and Sarawak, as well as provision for land clearing and supply of high-quality oil palm seedlings, fertilisers, pesticide and herbicides,” he said.

On another note, Ahmad Parveez said the Malaysian palm oil industry experienced mixed performance mainly in terms of prices in 2023 compared to 2022.

Sufficient supply had pushed down prices to below RM3,890.50 per tonne after the record high of RM5,087.50 per tonne in 2022.

Exports of palm oil were also lower by 1.1 per cent due to reduced demand, resulting in higher stocks.

Ahmad Parveez also said that palm oil exports are expected to increase by 3.3 per cent to 15.60 million tonnes in 2024 from 15.10 million tonnes last year, backed by the palm oil demand from importing countries.

Similarly, the export value of palm oil and palm-based products is projected to rise by 4.3 per cent to RM110 billion in 2024 from RM105 billion in 2023.

He also foresees production to rise by 1.1 per cent to 18.75 million tonnes in 2024 from 18.55 million tonnes in 2023, supported by an expected increase in the mature planted area, especially in Peninsular Malaysia and Sarawak, and improving labour situation.

Last year, Malaysia’s oil palm production grew by 0.5 per cent year-on-year (y-o-y) to 18.55 million tonnes from 18.45 million tonnes in 2022 as fresh fruit bunches yield rose by 1.9 per cent y-o-y to 15.79 tonnes per hectare.

Ahmad Parveez said the closing stock of palm oil was 4.1 per cent higher y-o-y at 2.29 million tonnes last year, compared to 2.20 million tonnes in December 2022. ― Bernama