Malaysia seeks to allocate US$330M for palm oil replanting economic plan
The replanting rate dropped further to 2% last year, prompting concerns about long-term sustainability.
MALAYSIA – Malaysia is ramping up efforts to rejuvenate its aging oil palm plantations with a proposed allocation of US$330 million (RM1.4 billion) over the next five years.
The initiative, part of the 13th Malaysia Plan (13MP), aims to boost productivity and maintain the country’s position as the world’s second-largest palm oil producer.
Announced by Plantation and Commodities Minister Datuk Seri Johari Abdul Ghani, the funding will primarily support smallholders in replanting older trees with higher-yielding varieties.
Johari emphasised that aging plantations, many over 25 years old, are contributing to stagnant yields and threatening Malaysia’s future export capacity.
In 2023, only 132,000 hectares were replanted, falling short of the government’s target of 4% annual replanting.
The replanting rate dropped further to 2% last year, prompting concerns about long-term sustainability.
“When replanting is not being taken care of, it will affect our future exports,” Johari told parliament, adding that the government is also offering a matching grant of RM100 million (US$23.65 million) this year to incentivise smallholders.
The replanting initiative aligns with broader goals to modernise Malaysia’s agricultural sector through mechanisation, automation, and targeted Research & Development.
Prime Minister Datuk Seri Anwar Ibrahim, while tabling the 13MP, reaffirmed the government’s commitment to revitalising strategic sectors, including palm oil, rubber, and cocoa.
Industry leaders and economists have welcomed the move, noting that replanting is critical to maintaining Malaysia’s competitiveness in the global palm oil market.
With commodity exports valued at RM115 billion, the government hopes the replanting program will significantly contribute to export growth and rural development.
“Malaysia’s commodity exports stand at about RM115 billion, and this replanting initiative is expected to contribute to our export growth,” added Johari.
“If we can upgrade and replant large areas of ageing oil palm trees, it will boost our capacity and competitiveness in the global palm oil market.”
As parliamentary debate on the 13MP begins, stakeholders are expected to provide feedback on implementation strategies and funding mechanisms.
The success of the initiative could serve as a model for sustainable agricultural reform across Southeast Asia.
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