Kuala lumpur: The increase in the price of fresh fruit bunches (FFB) is one of the main contributing factors for the low replanting rate in 2024, stated Minister of Plantation and Commodities, Datuk Seri Johari Abdul Ghani.
According to BERNAMA News Agency, the minister highlighted that the price surge has led plantation companies and oil palm estate owners to retain existing palm trees to secure short-term income. He elaborated, “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,” while addressing the Dewan Rakyat.
The minister was responding to inquiries from Jamaludin Yahya (PN-Pasir Salak) regarding the low oil palm replanting rate, which only reached 2.0 per cent in 2024, falling short of the industry’s target of 4-5 per cent annually. Johari noted that the average price of crude palm oil (CPO) in 2024 had risen to RM4,179.50 per tonne from RM3,809.50 per tonne in 2023, thereby elevating the average FFB price to RM875 per tonne, compared to RM778 per tonne the previous year.
Despite the revenue from selling FFB from older, less productive palm trees, Johari pointed out that the overall productivity remains low, impacting the income and capital of these businesses. This has resulted in capital constraints that delay replanting activities. Other contributing factors include the aging population of existing smallholders and a decline in interest among the younger generation to engage in replanting efforts.
Johari also identified concerns over the temporary loss of income during the non-yielding period of newly planted palms as a barrier to achieving full and targeted replanting. He emphasized, “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.”
Johari urged that taking proactive steps toward replanting should be viewed as a strategic investment to ensure plantations or smallholdings remain productive, guaranteeing a stable and sustainable income stream over the long term. He warned that neglecting replanting when necessary could adversely 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 concluded.