Malaysia Eyes Zero CPO Exports As It Increases Production Of Downstream Products -- Johari

KUALA LUMPUR, 24 Feb (Bernama) --  The Ministry of Plantation Industries and Commodities (KPK) wants Malaysia to achieve zero export of crude palm oil (CPO) in the future by increasing the production of downstream products.

Its minister, Datuk Seri Johari Abdul Ghani, noted that from the 19.3 million tonnes of CPO produced last year, only three million tonnes were exported, while the rest were processed into downstream products.

He said his ministry plans to ensure that all of the country’s CPO is processed locally to produce 80 per cent of cooking oil and food products, with the remaining 20 per cent used for industrial purposes.

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“This is because we have a good ecosystem. Previously, 80 per cent of our CPO output was exported, but today we process CPO at 53 refining plants. Then, we process it into oleochemicals at 21 factories. We also have 19 biodiesel plants,” he told parliament, urging industry players to open oleochemical plants in Sabah and Sarawak as there are no oleochemical plants in the two states.

He noted that out of the 5.7 million hectares of palm oil plantations in Malaysia, 3.1 million hectares are in Sabah and Sarawak, making both states a large potential area for downstream industry development.

Commenting on national replanting efforts, Johari said the replanting rate is low at 2.0 per cent, compared to the required 4.0 per cent. He said Malaysia needs to increase replanting efforts, and the ministry is ready to submit requests to the government for additional allocations if needed.

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The government has allocated RM100 million for replanting initiatives to ensure that palm oil yields are not affected by ageing palm trees. The government aims to ensure that palm oil can compete with soybean oil, which is currently priced lower.

For rubber, he said KPK will continue to actively help smallholders through various incentives to increase the country's natural rubber production.

"Active smallholders, who produce 348,000 tonnes of rubber, will be assured of getting the incentives we provide, such as rubber production incentives and latex production incentives, and we will introduce the use of new technology. Additionally, good agricultural practices, such as quality fertilizers, will increase latex production, as well as good seedlings," he added.

Johari said the downstream industry requires 1.6 million tonnes of natural rubber, but smallholders only produce 350,000 tonnes. Therefore, Malaysia has imported rubber from countries such as Vietnam, Thailand, and Ivory Coast to meet the demand.

According to him, the Malaysian Rubber Board (MRB) will actively conduct research to produce new high-performance rubber clones with strong disease resistance. “One day, when we have these (good) clusters, it will help reduce imports from abroad,” he said.

-- BERNAMA