Rise In FFB Prices Among Main Reasons For Low Oil Palm Replanting Rate In 2024 - Johari

KUALA LUMPUR, Aug 5 (Bernama) -- The increase in the price of fresh fruit bunches (FFB) is one of the main contributing factors for the low replanting rate in 2024, said Minister of Plantation and Commodities, Datuk Seri Johari Abdul Ghani.

The minister said the price increase has encouraged plantation companies and oil palm estate owners to retain existing palm trees to earn short-term income.

"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. This is because they are still earning revenue from FFB sales, even though the FFB yield is at a very low level," he told the Dewan Rakyat today.

He was responding to Jamaludin Yahya (PN-Pasir Salak), who had asked about the main reasons why the oil palm replanting rate only reached 2.0 per cent in 2024 - significantly lower than the industry’s target of 4-5 per cent annually.

According to Johari, the average price of crude palm oil (CPO) in 2024 had increased to RM4,179.50 per tonne compared to RM3,809.50 per tonne in 2023, which in turn pushed up the average FFB price to RM875 per tonne, compared to RM778 per tonne the previous year.

"Although plantation companies and oil palm estate owners are still earning revenue from selling FFB from old and unproductive palm trees, the overall productivity of FFB remains low, and this affects the income and capital of these companies and landowners. This capital constraint causes delays in replanting oil palms," he said.

Other identified factors include the fact that many existing smallholders are elderly, while interest among the younger generation to continue replanting efforts is increasingly declining.

In addition, Johari said concerns over the temporary loss of income during the non-yielding period of newly planted palms also served as a barrier to full and targeted replanting.

"Although current FFB prices offer attractive short-term returns, long-term yield potential will be more secure if replanting is carried out in a planned manner. Old, less productive palm trees risk limiting the maximum potential of plantations, both for companies and smallholders," he said.

Therefore, Johari said taking proactive steps to carry out replanting should be seen as a strategic investment that can ensure plantations or smallholdings remain productive, thereby guaranteeing a more stable and sustainable income stream in the long term.

He said that if oil palm replanting is not carried out according to the tree’s lifespan, it will affect productivity.

“Mature trees can usually yield up to 28 tonnes depending on good agricultural practices, but if replanting is not done, when the oil palm reaches the age of 25, 26, or 27 years, the yield we get is usually only four to five tonnes, no more than that,” he added.

-- BERNAMA