KUALA LUMPUR: Rising fresh fruit bunch (FFB) prices have become a key deterrent to oil palm replanting efforts in Malaysia, with the 2024 rate falling to just 2.0 per cent against the industry’s 4-5 per cent annual target.
Plantation and Commodities Minister Datuk Seri Johari Abdul Ghani attributed this trend to short-term profit motives, as higher crude palm oil (CPO) and FFB prices incentivise growers to delay replacing aging trees.
“The price of FFB is one of the key factors considered by plantation companies and oil palm estate owners when deciding whether to carry out replanting activities or not,“ Johari told the Dewan Rakyat. He noted that while current FFB prices averaged RM875 per tonne in 2024 – up from RM778 in 2023 – yields from older trees remain suboptimal, creating long-term productivity risks.
Industry data reveals CPO prices rose to RM4,179.50 per tonne this year, reinforcing reliance on existing plantations. However, Johari warned that retaining unproductive trees beyond their 25-year lifespan slashes yields from 28 tonnes to just 4-5 tonnes per hectare. “This capital constraint causes delays in replanting oil palms,“ he said, highlighting how deferred replanting erodes future income stability.
Additional barriers include Malaysia’s aging smallholder demographic and younger generations’ declining interest in palm cultivation. The minister emphasised that replanting must be viewed as a strategic investment, despite the temporary income gap during new trees’ non-yielding phase. “Long-term yield potential will be more secure if replanting is carried out in a planned manner,“ he stressed. – Bernama