World: Palm oil industry faces 3-5 years production halt due to replanting curbs

Palm oil expansion looks less promising in the long run as stricter regulations are slowing down growth of new oil palm cultivation thus, lowering yield of fresh fruit bunches (FFB) and pushing up costs. Kenanga Research in a recent note cautioned that palm oil production could be put on hold for three to five years for the industry to replenish older palms with younger saplings. “Longer term, the growth for palm oil looks less rosy. Expansion in the form of new oil palm planting is slowing due to tighter regulations,” the research house said. It noted that Indonesia, which has 15 million ha area of oil palm trees has only three to four million ha left for the crop, while Malaysian oil palm area has been contracting even before reaching a voluntary cap of 6.5 million ha. “This implies fewer young and prime palms over the coming years while palms planted in the 1990s and 2000s are growing older and taller, slowing down harvest, lowering FFB yield and pushing up costs…Replanting ...