MALAYSIA: 100 YEARS OF RESILIENT PALM OIL ECONOMIC PERFORMANCE

The oil palm industry in Malaysia started about 100 years ago in a modest way. It was first introduced to Malaya (now Malaysia) as a commercial plant in 1917 at the Tennamaram Estate in Selangor, which effectively laid the foundation for the development of the oil palm industry in Malaysia. The oil palm planted area had expanded phenomenally from a mere 55 000 ha in 1960, to 5.74 million hectares in 2016. In tandem with the area expansion, the production of palm oil also grew significantly from less than 100 000 t in 1960 to about 17.32 million tonnes in 2016. From a humble beginning in 1960, the Malaysian oil palm industry has transformed to become one of the key contributors to the Malaysia's Gross Domestic Product (GDP), foreign exchange earnings and creation of employment opportunities. Likewise, exports of palm oil also witnessed a sharp increase from 1.17 million tonnes in 1975 to 16.05 million tonnes in 2016. From merely depending on Europe as its main export destination in the early years, Malaysia has now expanded its export markets to more than 200 markets worldwide, which included the Indian sub-continent, the West Asia, Africa and Asia. In this regard, the type of export products also dramatically changed from depending on crude palm oil (CPO) (100%) to a myriad of processed palm oil products (99%) to cater to the ever increasing demand of consumers. On average, the industry contributes 5% to 7% of the country's GDP, with export revenue for the last five years averaging at RM 64.24 billion annually. Despite attaining significant achievements in both its palm oil production and exports, Malaysia is currently facing issues of the limited arable land and labour shortage, which can affect the continued growth of the oil palm industry. Compounding this problem further, is the strong pressure exerted by non-governmental organisations (NGO) on issues of environment and so-called claims of protecting consumers' health. It is precisely for this that the Transformasi Nasional 50 (TN50) programme envisages the adoption of mechanisation to address the issue of labour shortage and producing higher yielding clonal planting materials on a commercial basis to increase oil palm productivity. On the issue of confronting negative allegation against palm oil, continued efforts in branding palm oil as an environmentally sustainable palm oil through the adoption of the Malaysian sustainable palm oil throughout the value chain is deemed as the game changer for the industry in the future.