Sarawak palm oil industry to generate RM35 billion annually

From The Borneo Post

Posted on April 9, 2011, Saturday

KUCHING: Sarawak is the final frontier of the Malaysian oil palm industry, a major source of revenue that is strategic to rural development, according to planters in the state. Although the industry in Sarawak which started in earnest in the late 1980s has yet to realise its full potential, it has already brought great benefits to the state, including infrastructure development in the rural areas, they said.

“Oil palm is a strategic industry for rural centric development and can alleviate poverty,” Datuk Abdul Hamed Sepawi, chairman of the Sarawak Oil Palm Plantation Owners Association, told Bernama. “If not oil palm, what then is the alternative for rural growth and economic development in Malaysia?” he asked.

Oil palm has been planted on 1.1 million hectares of state and native customary rights land, whose owners enjoy a share of dividends. The state government has earmarked two million hectares or 15 per cent of state land for oil palm plantation.

Hamed recalled that oil palm was the economic security crop for Malaysia during the Asian financial crisis in 1997-98, when it was one of the most important sources of foreign exchange. “The industry adopts sustainable practices using standard operation procedures to ensure that it will continue to bring prosperity to the state,” Hamed said.

He said the association worked closely with the Malaysian Palm Oil Board and research organisations to make certain that good management practices and the sustainability approach were observed. “We look forward to working with the government in setting up a dedicated oil palm plantation institution in Sarawak to develop all the skills the industry needs,” Hamed added.

Association secretary Philip Ho said the industry could generate massive opportunities for people in different professions. Right now, there was a shortage of workers, making necessary recruitment from outside, he said.

Ho said that plantations had a lifespan of over 30 years per cycle. Projecting future income, he said: At an average of 25-30 tonnes of fresh fruit bunches per hectare and at RM700 per tonne, two million hectares can generate around RM35 billion annually to the state.” From 2001 to 2009, he noted, the oil palm industry in Sarawak contributed RM916 million to the tax revenue of the state. – Bernama

MPOB to assist local smallholders in oil palm planting, replanting scheme

Posted on April 5, 2011, Tuesday by the Borneo Post

INCREASE PRODUCTIVITY: Dompok (standing, centre), Riotd (standing, fifth left) and Adzmi (standing, fifth right) with Cantas Discount Scheme recipients.

SERIAN: The government through the Malaysian Palm Oil Board (MPOB) will allocate RM7, 000 per hectare to smallholders for them to participate in the replanting and new planting of oil palms. Plantation Industries and Commodities Minister Tan Sri Bernard Dompok said the assistance was to increase the country’s palm oil production as it has been identified as one of the National Key Economic Areas (NKEA. Dompok said the Palm Replanting Scheme for Small Farmers (TSSPK) includes the chopping down of palm trees older than 25 years old and those no longer productive.

Under TSSPK, the government also provided smallholding maintenance assistance (CPC) of RM500 per month for two years to successful applicants.In addition to increasing oil palm production, TSSPK also helped to open new land for small scale farmers.

“We want to encourage small scale farmers in Sarawak and Sabah to go into the new planting and replanting scheme.”This is the reason why the government provides assistance of RM7, 000 per hectare to cover costs for fertilisers, insecticides, weed killers and more,” he said.

He was speaking to reporters after officiating the ‘Pemimpin Bersama Pekebun Kecil Sawit’ at Ranchan Recreation Park here yesterday. Also present were Deputy Minister of Foreign Affairs who is also Serian MP Datuk Richard Riot, and MPOB’s Licensing and Enforcement Division director Adzmi Hassan.

According to Dompok, Sarawak has recorded a total of 10,417 small scale farmers for oil palm plantations with an area of 58,800 hectares.Thus, he urged them to increase productivity to enhance their production of palm oil. At the same time Dompok said the ministry was trying to get more funds for other cash crops like pepper and cocoa.

For pepper he said the state is the highest producer of black pepper, which is more than 90 per cent of national production in the pepper industry. While for the cultivation of cocoa, he said at one time there were more than 200,000 hectares, now it had declined to only 20,000 hectares.

MPOB ruling unpopular with dealers

Commodities Talk- by Hanim Adnan

THE Malaysian Palm Oil Board's (MPOB) decision to bar its licenced oil palm dealers from buying and selling oil palm fresh fruit bunches (FFBs) with other co-dealers, effective Jan 1, has come under fire.

Last Friday, board members of the Malaysian Palm Oil Dealers Association (MPODA) openly challenged MPOB's move, claiming it to be unfair and favouring palm oil millers which can now accept FFBs from various sources, like estate owners, independent dealers, smallholders.

Previously, they were restricted to just licenced FFB dealers. Despite repeated attempts to get MPOB to withdraw the new ruling, which was proposed in 2009, the plea by MPODA members has gone unheeded.

Furthermore, dealers claim that the reasons given by MPOB for introducing the ruling were rather weak.

It had said that the ruling would give opportunity for estates, smallholdings and other dealers to sell directly to millers, enable small dealers to not be monopolised by big dealers and to ensure quality of the FFB for the oil extraction rate (OER) to exceed 25 tonnes.

It is important to emphasise that the low OER lies in the hands of millers and not oil palm dealers. Why are some inefficient millers not penalised when they failed to produce higher OER? Some dealers even claim that some millers, who are also large plantation owners with representatives in MPOB, have enough clout to influence the decision of MPOB.

Currently, there are easily at least over 3,000 oil palm dealers serving over 400 palm oil mills nationwide.

Furthermore, if the buying and selling of FFBs among oil palm dealers were banned, this would translate into loss of employment, income and the folding-up of many small dealers nationwide.

The implication is particularly severe to the cooperative scheme for smallholders and district farmers' organisations which had reaped better returns from the current dealers' system via open tender.Under the new ruling, the closure of small dealers' enterprises would be unavoidable given the lack of financial resources, logistics, transportation problems and rotten FFBs, especially during peak harvesting season. Apart from providing transportation to FFBs, oil palm dealers were also known to provide other services like credit terms, cash advancement, fertiliser supply and harvesters.

As for MPOB, it is also wise to provide proper statistical data to support its claim that big oil palm FFB dealers are monopolising the industry. It should also undertake an indepth study on the OER to show who is actually at fault - the millers or the dealers.

As MPODA president Datuk Abdul Fattah Abdullah said, stakeholders in the industry should work together to ensure that the country's OER ranged 20% to 24%. Those who are not able to produce at the desired level should not blame others for their own inadequacy.

2011 CPO prices to average RM3,600 per tonne

Posted on January 19, 2011, Wednesday

KUCHING: The president of Asian Agri Group, Datuk Yeo How recently gave his views on the plantation sector with a bullish outlook on crude palm oil (CPO) prices. In its research report, Hong Leong Investment Bank Bhd (Hong Leong Research) said that the mooted CPO average price was RM3,600 per tonne. For that matter, the research house said Yeo believed that CPO prices had the potential of rallying beyond the RM4,000 per tonne mark in the near term, albeit with greater price volatility relative to 2010. 

This view was underpinned by the record-low inventory levels for several major oilseeds and grains largely due to adverse weather conditions. To elaborate further, the oilseeds and grains in question were soybean, sunflower oil and CPO. While the weak corn and soybean crop would have already been factored into the current high prices, Yeo believed that prices of soybean would soar higher should soybean crops come below expectations and hence result in higher CPO prices. Nevertheless, beyond the first half of this year, while Yeo believed that CPO output would recover from the second half of this year onwards, it was important to note that the quantum of the crop recovery re-mained questionable and this would not soften CPO prices should crop recovery be weak.

In other developments, Hong Leong Research said Yeo’s views also included both demand and prices to likely strengthen post Chinese New Year as China would likely begin inventory replenishing given the low inventory level and as the industry started to move away from seasonally weak demand during the winter months.

While there were concerns that skyrocketing commodity prices might result in demand rationing for CPO, Yeo believed that this was unlikely to happen at this juncture given that prices of other oilseeds had increased substantially as well. Notably, the research firm also highlighted Yeo’s views that the current high commodity prices were also supported by the flush of liquidity and the weak US dollar.

Furthermore, it also presented Yeo’s beliefs that margins for the refining business would remain tight amidst the current high CPO prices for the downstream segment. On the issue of biodiesel viability, Yeo said mandates from various countries should help cushion biodiesel consumption although it was currently not economically viable on a free market basis.

There were also risks present in the form of global vegetable oils (including CPO) production coming in higher than expected, which would result in lower-than-expected CPO prices and also demand rationing by certain oil-consuming countries. The effects of this would be apparent when vegetable oil prices skyrocket to certain levels, which would bring down consumption for vegetable oil. 

Hong Leong Research noted that there was still plenty of upside to plantation stocks at the current share price levels as those under its coverage were still trading below two-year historical forward price-to-earnings mean. Its top picks on the sector were IOI Corporation Bhd, Sime Darby Bhd and Tradewinds Plantation Bhd with target prices at RM6.62 per share, RM10.76 per share and RM4.60 per share respectively.

Bilangan Dan Berat Buah Tandan Kelapa Sawit

10 - 12 buah tandan boleh dihasilkan oleh pokok matang kelapa sawit setahun . Setiap pokok matang akan menghasilkan buah berat 20 kg sebulan.  Oleh itu setiap pokok hasilkan 10 x 20 = 200 kg x .50 = RM 100. (Jika harga kilang RM500/tan) .Tanam 1000 pokok = RM100,000.00. Untuk menjana pendapatan 1 juta setahun kenalah menanam 10,000 sawit / 148 = 68 ha.

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Monday May 31, 2010

Shortage of oil palm seedlings

By JACK WONG
jackwong@thestar.com.my

Demand set to rise as Sarawak steps up development of oil palm plantations

KUCHING: Sarawak, which is facing a shortage of oil palm seedlings, is expected to see rising demand as the state has yet to develop a quarter of its target of one million hectares of oil palm plantations, said State Assistant Minister in the Chief Minister’s Department Naroden Majais.

He told an oil palm seedling entrepreneurship course here recently that Sarawak needed 16.4 million seedlings last year but the supply only amounted to 10 million.

Juara Beetuah Sdn Bhd managing director Michael James attributed the shortage in Sarawak, especially over the past two years, mainly to exports of oil palm seedlings to Kalimantan, Indonesia.

He said such sales had however abated as the Indonesian plantations, most of which were owned by Malaysian firms, had started their own nurseries.

Juara Beetuah, a major seedling producer and the only company in Sarawak awarded the competency certificate by Malaysian Palm Oil Board (MPOB), owns nurseries in Lundu (Kuching Division), Bintulu and Lawas in northern Sarawak.

Some EU MPs on a visit to Malaysia say the sector has helped take people out of poverty

James said his company produced up to 100,000 seedlings a year, which were mainly supplied to MPOB. The latter then distributes them to smallholders

Juara Beetuah’s other customers are government agencies like Sarawak Land Consolidation and Rehabilitation Authority and Felda, which are involved in plantation projects.

“We produce based on advance contracts. On top of that, we produce another 10% for the market,” he told StarBiz.

Juara Beetuah uses high-yield clones that are able to produce between 28 and 33 tonnes of fresh fruit bunches per hectare a year.

However, James said the output would depend on several factors such as soil conditions and plantation management methods.

The company sells seedlings for RM8 to RM12 each, depending on transportation costs.

Sarawak needs more oil palm seedlings

By SHARON LING

KUCHING: Sarawak needs to produce more oil palm seedlings to meet a shortage faced by plantations in the state. Assistant Minister in the Chief Minister's Department Naroden Majais said the state was short of some 6mil seedlings last year.

"We required 16.4mil seedlings last year but were only able to supply 10mil seedlings. Each new hectare of oil palm requires about 200 seedlings," he said. He added that demand for seedlings would continue to rise because Sarawak was targeting 1mil ha of oil palm plantations, out of which 250,000ha have yet to be developed.

"The land has already been identified and we will develop it in stages. This will require more seedlings, while existing plantations will also need seedlings to replace their older trees. "So there is a big opportunity for local entrepreneurs to produce seedlings on a commercial basis," he said when opening an oil palm seedling entrepreneurship course here Tuesday.

The two-day course, organised by the Bumiputera Entrepreneurship Development Unit in the Chief Minister's Department and the Malaysian Palm Oil Board (MPOB), was attended by 45 participants. The unit's adviser Datuk Adzmy Abdullah estimated that Sarawak would need 500ha of nurseries to supply the targeted 1mil ha of oil palm plantations. He said there were currently 130 entrepreneurs in the state cultivating oil palm seedlings but more were needed to meet current and future demand. "For example, there are only four certified nurseries in Mukah supplying 20,000ha of plantations," he said.

He also said cultivating seedlings was a potentially lucrative industry as the production cost was about RM5 per seedling compared to a selling price of RM10 to RM15 for a year-old seedling. On the course, Adzmy said, the participants would sit for theory and practical tests at the end. Those who passed will receive the Oil Palm Nursery Certificate of Competency from MPOB.