MPOC - Keeping Everyone Happy

KEEPING EVERYONE HAPPY
Tan Sri Datuk Dr Yusof Basiron, CEO, Malaysian Palm Oil Council (MPOC), on the commercial benefits and sustainability of the palm oil industry

Oil palm plantations were established in Malaysia almost a century ago. After decades of activity with rubber, cocoa, coconut, tapioca, pineapple, coffee, tea and rice, oil palm cultivation has become increasingly popular as an agriculture industry option.

Since 2005, palm oil has surpassed soya bean oil as the oil produced in the largest volume. Many
countries are dependent on palm oil for their food industries. In countries such as the US, it is now being used to replace hydrogenated soya bean oil because it contains unhealthy transfats.

Palm oil is also a major raw material for oleo chemicals, which are used in cosmetics, toiletries and detergents. The continuing increase in populations and incomes around the world will certainly result in the need for more palm oil production for both the global food and oleo chemical industries.

After years of exploitation of these crops for such commercial purposes, they are once again attracting attention because of their potentially lucrative roles in the future. With the substantial rise in petroleum prices over recent years, the search for a renewable fuel has become increasingly intense.

In this regard, biodiesel production from palm oil has been identified as the key future growth area for the oil palm industry. Due to the increasing demand for biodiesel, the conversion process will continue until the price of petroleum is lower than that of palm oil. Thus the future price of palm oil will in fact be linked more closely to that of petroleum.

Opponents argue that the great demand for fuel will stimulate expansion of palm oil production,
resulting in the transformation of forest areas into oil palm plantations. This fear is unfounded, as the use of palm oil as fuel will stop as soon as the price of palm oil is higher than that of petroleum. Furthermore, in Malaysia, forest areas are being replanted with forest species. Rubber is approved as one such forest species. Oil palm plantations, like rubber plantations, are also essentially planted forests occupying our agricultural lands. Therefore, oil palms could qualify as a species for planted forests just as easily as rubber.

Deforestation concerns can be addressed once the public is able to view the oil palm from the angle of a planted forest. Planted forests such as oil palm and rubber plantations occupy almost 90% of the agricultural land of Malaysia. Agricultural areas make up 20% of the country’s total land area, while some 64% of the country is already under natural forest cover. Therefore, there is approximately 84% tree cover from forests and planted forests in Malaysia.

Unlike the planted forests found in some other countries where trees can only be harvested once
every 25 years, the planted forests of oil palm and rubber plantations provide many kinds of by-products that are harvestable year-round, which include palm oil, palm kernel oil and palm kernel meal for the food, oleo chemical and animal feed industries.

Perhaps most importantly, palm oil is also the raw material for the manufacture of biodiesel fuel. The raw materials for the manufacture of medium-density fibreboard and other biocomposite products are obtained from the fibres of the fronds and empty fruit bunches. Timber for plywood and furniture making can also be obtained from the tree trunks.

Viewed from this perspective, the oil palm is indeed a highly productive forest species. Compared
to pines, which are the popular species in temperate countries, the oil palm is also superior in the emission of oxygen, absorption of carbon dioxide and maintenance of biodiversity. More than 50 animals and numerous plant species populate the lands in Malaysia that are planted with oil palms.

Apart from the significant environmental advantages, the oil palm provides a high income from the manufacturing of its derivatives. Looking at this plant from any perspective, be it that of an economist, an environmentalist or simply a consumer, the oil palm is definitely the best and most viable option.