OPENING SPEECH BY

YB DATUK SERI JOHARI BIN ABDUL GHANI 

MINISTER OF PLANTATION AND COMMODITIES

PALM OIL ECONOMIC REVIEW AND OUTLOOK  SEMINAR (R&O) 2024

THURSDAY, 11 JANUARY 2024

PULLMAN KUALA LUMPUR CITY CENTRE

YB Datuk Chan Foong Hin

Deputy Minister of Plantation and Commodities

YBhg. Dato’ Haji Mad Zaidi Mohd Karli

Secretary General

Ministry of Plantation and Commodities

YBhg. Datuk Mohamad Helmy Othman Basha

Chairman

Malaysian Palm Oil Board (MPOB)

YBhg. Datuk Dr. Ahmad Parveez Hj. Ghulam Kadir

Director-General

Malaysian Palm Oil Board (MPOB)

YBhg. Tan Sri - Tan Sri, Datuk-Datuk,

Honourable Guests & Members of Media,

Distinguished Participants of the Palm Oil Economic Review & Outlook Seminar 2024,

Ladies & Gentlemen,

Assalamualaikum Warahmatullahi Wabarakatuh

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1. A very good morning and Salam Malaysia Madani to all. I would like to express my gratitude to the Malaysian Palm Oil Board (MPOB) for your commitment and efforts in organising the Palm Oil Economic Review and Outlook Seminar (R&O) 2024. I would also like to take this opportunity to thank all participants here today for taking the time to be with us and contribute to the discussions over the course of the seminar.

2. This year's theme, "Meeting Global Needs with Sustainable Palm Oil" carries profound relevance and timeliness. We find ourselves at a critical juncture, grappling with three formidable challenges confronting the oil palm industry. These challenges include:
   • Persistent labour shortages; o Falling productivity and yields; and
   • Ramifications arising from the compliance standards imposed by the European Union deforestation regulation (EUDR) and the United States.

3. As we enter into the new year, the palm oil industry is expected to remain a key driver of Malaysia's economic growth. The global demand for palm oil escalated with the reopening of borders and recovery of economic sectors which boosted consumption in the importing countries, both for the food and non-food based industry. The Malaysian palm oil industry continues to exert significant influence on the global oils and fats market - which is becoming increasingly competitive. This comes at a time when we are dealing with substantial challenges, both domestically and globally, such as;

o        Unpredictable weather conditions;  o Environmental considerations; and o Geopolitical unrest.

4. Nevertheless, the palm oil market maintains an optimistic outlook for 2024. This positivity is fuelled by expectations of robust palm oil demand from key export destinations, such as India, China and the EU. The demand is further supported by interests in replenishing stocks to ensure food security and the overall viability of business activities, making 2024 appear very promising.

Distinguished Guests, 

5. The persistent issue of labour shortages in the palm oil sector has resulted in production losses and low yields, which has restrained palm oil production from reaching its full potential in 2022 and 2023. For instance, the freeze on the hiring of foreign workers had resulted in a shortage of 55,000 workers in the palm oil sector in December 2022. Nonetheless, despite facing some initial obstacles, the labour situation gradually improved with the reopening of Malaysian borders resulting in the slight increase in crude palm oil (CPO) production in the latter part of 2023. Going forward, the Government is committed to ensure the efficient management of foreign workers which will address the critical labour situation in the plantation sector.

Ladies & Gentlemen,

6. The Government has proposed to expand the scope of automation tax incentives to include the plantation sector, in order to reduce labour dependence through mechanisation and automation. This is a valuable opportunity for oil palm growers to reinvest their gains into technologies to increase productivity and support workers, particularly in the harvesting and collection of fresh fruit bunches (FFB). The transition towards automation and mechanisation is now a necessity given the high dependence on foreign workers.

7. As such, I am confident that the on-going projects under Mechanisation and Automation Research Consortium of Oil Palm (MARCOP) will ensure significant progress in increased mechanisation and automation in the industry. MARCOP is poised to undertake programmes that include exploring “low hanging fruit” opportunities, such as adopting the latest technologies particularly for harvesting or spraying pesticides and spreading fertilisers. Having said that, I would like to take this opportunity to encourage industry members and stakeholders to work closely with the Government in generating innovative ideas.

Ladies and gentlemen,

8. The global community today underscores the importance of committing to the sustainability agenda. Extreme weather conditions and workers’ welfare have significantly impacted the palm oil industry. Following this, the EU and the US in particular, have imposed strict environmental regulations, focusing on deforestation and forced labour. Hence, multilateral platforms such as the Council of Palm Oil Producing Countries (CPOPC) play an essential role in addressing these issues, as the legislation has become a trade barrier to palm oil along with other selected commodities.

9. Malaysia must continue to position its palm oil industry as a global leader in sustainability. MSPO certification programmes were intensified with continuous support from the Ministry, related agencies and various parties to ensure full adoption of sustainability requirements among the smallholders. As of December 2023, the MSPO certification has reached 22%, which indicates that 5.35 million hectares out of a total 5.67 million hectares of oil palm planted areas in Malaysia have been certified under the MSPO. Additionally, about 94.16% or 435 of the 462 mills in the country have also been certified under the MSPO. Additionally, integrating the Sawit Intelligent Management System (SIMS) with the MSPO certification will not only enhance operational efficiency, but also contribute significantly to meeting the EUDR requirements.

Ladies & Gentlemen,

10. I sincerely hope that this seminar will successfully achieve its objective of keeping members of the oil palm industry informed about the challenges at hand and formulating strategic initiatives to enhance the industry's performance and competitiveness, both on a local and international scale.
11. On that note, I strongly encourage the industry players present here today to actively participate and share your perspectives and suggestions throughout this event, because your valuable engagement is crucial in ensuring the resilience of the industry. The industry's prosperity seeks to benefit all Malaysians. With that, I hereby officiate the Palm Oil Economic Review and Outlook Seminar 2024.

Thank you.