KUALA LUMPUR, Malaysia Malaysia needs to overcome many challenges to enable the country’s palm oil industry to thrive, said Oil World Executive Director Thomas Mielke.

He said there was a lack of oil palm replanting, deteriorating tree age profile, labour shortage and acreage limitation for new planters, all of which prevented palm oil yields from reaching full potential.

This is a year of surplus for palm oil but by 2020, we may start to see shortages and this may continue on thereafter, he told reporters at the Palm and Lauric Oils Price Outlook Conference & Exhibition 2018 (POC 2018) here today.

Mielke forecast palm oil production in Malaysia, the world’s second largest palm oil producer, to reach 20.76 million tonnes this year compared with 19.92 million tonnes in 2017, while global production would hit 70.84 million tonnes in 2018, resulting in a surplus of three million tonnes.

The production surplus is temporary and will only continue if palm oil production continues to rise by between 2.8 million tonnes and 2.9 million tonnes yearly for the next decade, he said.

Mielke, however, believed that the palm oil industry would not be ready to satisfy global needs between 2025 and 2030.

What is happening at the moment is a negative trend where palm oil players are not expanding.

If that becomes widespread, we are going to see a deficit in world production relative to consumption, he said.

Other challenges facing the industry include the lack of replanting, increasing number of old trees and labour issues.

Mielke said the age profile of palm trees was getting worse, while labour shortage had to be addressed.

POC 2018 is a leading international conference in the palm and lauric oils industry which gathered stakeholders from the edible oils industry for networking, and the exchange of ideas, solutions and trends.

The three-day event from March 5 was organised by Bursa Malaysia Bhd and attracted 1,700 participants.

Source: NAM News Network