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Malaysia’s Palm Oil Production is Stagnating; Biodiesel Producers Keep Expanding
28 June 2006
The Star. At a time when the country is looking to increase its production of palm oil to take advantage of the demand for the oil as a biodiesel feedstock as well as an edible oil, Malaysia’s palm oil yields and oil extraction rate (OER) are stagnating.
The problem must be addressed immediately, according to Malaysian Palm Oil Promotion Council chief executive officer Tan Sri Yusof Basiron.
The government has set a target of 35:25 for the oil palm sector to be achieved by 2020. With this target, the sector has to produce 35 tonnes of fresh fruit bunches (FFB) per ha and OER of 25% per year.
However, over the past five years, both yields and OER had not improved with FFB averaging 18 to 21 tonnes per hectare and OER at 19% to 20% per year, Yusof said when chairing a panel discussion on Dynamic Plantation Husbandry at the end of the Fifth International Planters Conference 2006 organized by The Incorporated Society of Planters (ISP) yesterday.
EPA Management Sdn Bhd estates director Teo Leng suggested using superior planting materials to improve productivity in oil palm estates in Malaysia.
There is a need to tighten the criteria of mother palms for seed production in Malaysia similar to those in Indonesia and Papua New Guinea which will enable planters to easily attain 23% to 25% OER. Achieving the 35:25 vision is not an issue but increasing yields and OER is paramount to our palm oil planters if they want to remain competitive in the global market.—Teo Leng
Malaysia’s seed production increased to 81.6 million last year from 38 million in 2001.
Separately, on the demand side, Golden Hope Plantations Bhd (GHope) said that it hopes to hit a total annual production capacity of 390,000 tonnes (about 118 million gallons) of biodiesel when four of its planned facilities are up and running—three in Malaysia and one in the Netherlands.
The first plant, Golden Hope Bioganic Sdn Bhd in Banting, has begun commercial production of biodiesel, with a capacity of 30,000 to 35,000 tonnes annually. The first shipment will go to “a big customer in Japan,” with a shipment of 2,000 to 3,000 tonnes (about 604,000 to 906,000 gallons)per month. In the meantime, the company plans to sell to Europe and other foreign markets.
Golden Hope is also be setting up another plant in Carey Island, Klang, together with the Malaysian Palm Oil Board, with an expected production of 60,000 tonnes (18 million gallons) per year. Commercial production will begin next April.
Golden Hope is also in talks with a public-listed European company to set up a biodiesel plant in Rotterdam, which would have a capacity of 100,000 tonnes (30 million gallons) per year. It will also build another plant near the port of Bintulu in Sarawak, in a joint venture with an as -yet unnamed partner.
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