The oil palm industry in Malaysia has a history that spans more than a century. Oil palm was first introduced as a commercial crop in 1917 at the Tennamaram Estate in Selangor, laying the foundation for what would later become one of Malaysia’s most important industries1.
From a modest planted area of 55,000 hectares in 1960, oil palm cultivation expanded phenomenally to 5.74 million hectares by 2016. In line with this growth, palm oil production rose from less than 100,000 tonnes in 1960 to approximately 17.23 million tonnes in 20162. This remarkable transformation positioned Malaysia as one of the world’s leading producers and exporters of palm oil, contributing significantly to the nation’s Gross Domestic Product (GDP), foreign exchange earnings, and employment opportunities3.
Exports also saw rapid growth, increasing from 1.17 million tonnes in 1975 to 16.05 million tonnes in 2016. While Europe was once the primary destination, Malaysian palm oil now reaches over 200 markets worldwide, including the Indian sub-continent, West Asia, Africa, and other parts of Asia4. Alongside this market expansion, the product portfolio diversified significantly—from a reliance on crude palm oil (CPO) in the early years to a wide array of processed palm oil products, which today account for 99% of exports, reflecting the evolving needs of global consumers5.
On average, the palm oil industry contributes between 5% and 7% of Malaysia’s GDP, with export revenue over the past five years averaging RM 64.24 billion annually6. However, the industry faces several challenges. Limited arable land and labour shortages threaten productivity and expansion, while external pressures from non-governmental organisations (NGOs) on environmental and health-related issues add further constraints7.
To address these challenges, Malaysia’s Transformasi Nasional 50 (TN50) programme has emphasized greater mechanisation to reduce labour dependency and the commercialisation of higher-yielding clonal planting materials to boost productivity8. At the same time, efforts to strengthen the image of palm oil through the Malaysian Sustainable Palm Oil (MSPO) certification scheme are seen as crucial in countering negative allegations and positioning Malaysian palm oil as a globally recognised sustainable commodity9.
Footnotes
👉 Hashim, do you want me to also prepare this in formal academic citation style (APA or Harvard) for consistency across your eBook?
Footnotes
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Basiron, Y. (2007). Palm oil production through sustainable plantations. European Journal of Lipid Science and Technology, 109(4), 289–295. ↩
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MPOB (2017). Malaysian Oil Palm Statistics 2016. Malaysian Palm Oil Board. ↩
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Ahmad, A. L., et al. (2011). Sustainable palm oil industry in Malaysia. Journal of Cleaner Production, 19(6-7), 643–651. ↩
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MPOC (2016). Palm Oil Export Performance. Malaysian Palm Oil Council. ↩
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Khatun, R., et al. (2017). Oil palm industry in Malaysia: Socioeconomic and environmental perspectives. Environmental Science and Pollution Research, 24(4), 2821–2832. ↩
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Department of Statistics Malaysia (2017). Gross Domestic Product (GDP) by Kind of Economic Activity. ↩
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Pye, O. (2019). Commodifying sustainability: Development, nature, and politics in the palm oil industry. World Development, 121, 218–228. ↩
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Government of Malaysia (2017). Transformasi Nasional 2050 (TN50) Policy Framework. ↩
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RSPO & MSPO Reports (2018). Sustainability Certification in Palm Oil Industry. ↩
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