KUALALUMPUR (Commodity Online) : One of the world’s top palm oil producers, Malaysia said its palm oil export earnings are expected to drop by 25 per cent this year.
In a statement issued here, Malaysia’s commerce ministry said exports earnings likely to drop by 25 percent from RM65.22 billion in 2008.
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The palm oil industry, which contributed more than one-third of the agricultural gross domestic product last year, was facing low demand in view of the current economic situation, the statement added.
Speaking at the seventh roundtable meeting on sustainable palm oil here, Malaysia’s commerce minister Tan Sri Bernard Dompok said, “At the moment, the output has not dropped but will continue to increase. Our policy is to try more and more activities on the downstream”.
Dompok said the government had allocated a fund of RM50 million to educate smallholders on adapting sustainability practices as well as the Roundtable for Sustainable Palm Oil (RSPO) certification process.
He said another amount of RM100 million had been allocated for the period from 2009 and 2010 to assist smallholders in the replanting programme to increase production capacity.
"We are looking to take out 500,000 tonnes of crude palm oil with this programme involving 200,000 hectares," the minister said.
"This in line with our longer term target to produce a national average of 35 tonnes of fresh fruit bunches (FFB) per hectare per year by 2020 from 20 tonnes of FFB currently," he said.
In his opening address, Dompok said Malaysia would continue to ensure well integrated sustainability programmes in the industry to ensure long-term benefits to the industry and country.
The ministry has initiated studies on the lifecycle assessment of palm oil, which the outcome will allow to identify carbon emission in the lifecycle of palm oil and institute measures to mitigate the effects.
"The development in the oil palm industry in Malaysia is chartered along sustainable basis," he said.
Dompok said oil palm cultivation was currently occupying close to 4.5 million hectares and providing employment to more than one million people.
He said Malaysian palm oil was exported to more than 150 countries worldwide and has gained worldwide acceptance due to its versatility in both food and non-food applications as well its competitive price.
"Currently, 157,000 hectares of the planted area producing more than one million tonnes of palm oil have been certified under the RSPO," he added.
The minister also said that all stakeholders in the industry needed to undertake a balanced approach towards ensuring the production and supply of sustainable palm oil to the global community.
The RSPO certification was construed by the business community as an additional mark of sustainability, he said.
"However, imposing additional criteria without allowing the necessary timeframe to adjust to the current principles and criteria may place additional burden," he added.
