ASEAN KEY DESTINATIONS
April 15, 2008
Indonesia likely overtook Malaysia as the world's top palm oil producer in 2007, due to dramatically increased planting there, a Malaysian minister was quoted by Bernama news agency as saying Monday.
"From preliminary figures in 2007 it looks like Indonesia has already overtaken us in terms of production," Plantation and Commodities Minister Peter Chin told reporters.
Chin said Malaysia was still the world's top exporter but that Indonesia was "very close behind" and would probably claim top status in 2008. "We do not aspire to be number one all the time," he said on the sidelines of a conference on sustainable palm oil production, in Sabah state on Malaysia's Borneo Island.
"Now Indonesia is coming up strongly, we acknowledge that they have more land, more estates and therefore they should logically be a bigger producer and bigger exporter. We will accept that," he said.
Malaysia produced 15.82 million tonnes of crude palm oil last year, and earned 45.2 billion ringgit ($14.1 billion) in export revenue.
Palm oil plantations account for 1.2 million hectares (2.97 million acres) of Malaysia's 4.2 million hectares of land allocated for agriculture. Some 30 percent of the country's palm oil is in Sabah.
Malaysia and Indonesia together produce 85 percent of the world's palm oil which is enjoying a boom on the back of strong global demand and tight supply.
Chin said with limited opportunities to expand agricultural land, palm oil producers will focus on increasing yield from existing crops by efficient growing techniques and replanting with better seedlings.
In a related report, chief executive officer of the Malaysian Palm Oil Council (MPOC), Dr Yusof Basiron, was quoted as saying that Malaysia is not concerned over the issue of who will be the world's biggest palm oil producer as the country prefers to place extra focus on palm oil that is sustainably produced.
He added that Malaysia wants to produce palm oil that is in line with the preservation of biodiversity and the environment.
The palm oil industry faces severe criticism from environmental groups which are concerned about climate change, loss of biodiversity and environmental degradation.
Environmental activists, such as those in Europe and the United States, have a massive campaign alleging that Malaysia and Indonesia, the world's top producers of palm oil, are destroying the environment and the orang utan's natural habitat with the opening of oil palm estates, with some groups even claiming that biodiesel derived from palm oil is not a clean fuel.
These groups claim that the expansion of oil palm cultivation may not only increase gas emission but also destroy the natural habitats of wildlife.
Palm oil importing countries, especially those in the West, now insist on some form of assurance that the palm oil they import comes from sources with sustainable practices in the plantations and mills.
Europe lately has emerged as one of the major markets for palm oil - apart from China and India - given the increasing demand for biofuel, with estimates that the European market will import 30 million tonnes of palm oil by 2010 for biodiesel production.