Fact Sheets Malaysian Palm Oil F Act Sheets Malaysian P

Fact Sheets Malaysian Palm Oil F act Sheets Malaysian P

Published by: alm Oil

Malaysian Palm Oil Council (192835-K) Malaysian Palm Oil Board nd 2 Floor, Wisma Sawit, Lot 6, SS6, Jalan Perbandaran No. 6, Persiaran Institusi, Bandar Baru Bangi 47301 Kelana Jaya, Selangor, Malaysia 43000 Kajang, Selangor, Malaysia Tel : +6(03) 8925 4400 Tel : +6(03) 7806 4097, Fax : +6(03) 7806 2272 Fax : +6(03) 8925 9446 Website : www.mpoc.org.my Website : www.mpob.gov.my aph # 6 Monog r Fact Sheets Malaysian Palm Oil

Reprint 2014

Published by: MALAYSIAN PALM OIL COUNCIL 2nd Floor, Wisma Sawit, Lot 6, SS6, Jalan Perbandaran 47301 Kelana Jaya, Selangor, Malaysia and

MALAYSIAN PALM OIL BOARD No 6, Persiaran Institusi, Bandar Baru Bangi 43000 Kajang, Selangor, Malaysia

National Library of Malaysia Cataloguing-In-Publication Data

Fact Sheets Malaysian Palm Oil Bibliography: p. 60 ISBN 978-983-9191-08-0 1. Palm oil--Health aspects—Malaysia 2. Palm oil industry—Malaysia 3. Oil palm—Malaysia 633.85109595 Contents

Foreword 02 Part I: The Oil Palm 03 Part II: Palm Oil & Palm Kernel Oil 09 Part III: Techno-Economic Advantages of Palm Oil 25 Part IV: Palm Oil & Palm Kernel Oil Applications 33 Part V: Palm Oil Nutritional Benefits 37 Part VI: Oil Palm & The Environment 45 Part VII: The Malaysian Oil Palm Industry 57 Related Organisations 59 References 60 Further Readings 63 Acknowledgement 64

1 Quelle: IJM, Cede Part I: The Oil Palm

Source: IJM, Cede 3 History

Fact 1: Archaeological evidence on palm oil consumption was found in an Egyptian tomb in Abydos. As no palm oil was ever produced in the country, the evidence implied that the oil had been traded during the time of the Pharaohs, which is about 5,000 years ago. Source: Friedel (1897)

Fact 2: Oil palm [Elaeis Guineensis Jacq.] originated from West Africa in a belt from Angola to Senegal. Source: MPOC (2005a)

Fact 3: Oil palm was introduced to Peninsular Malaysia, then Malaya, as an ornamental plant by the British in the 1870s. Source: MPOC (2005b)

Fact 4: In 1917, Henri Fauconnier planted the palm for its oil at Tennamaran Estate in Bestari Jaya, Selangor, Malaysia. Source: MPOC (2005b)

Oil palms in wild groves in West One of the four original palms from Africa which Fauconnier obtained seedlings Malaysia to plant oil palms at Tennamaran Estate

2 4

1 The original ve steps used to extract palm oil 3 5 Step 1: Cooking the bunch Step 2: Removing fruitlets from the bunch Step 3: Macerating the fruitlets Step 4: Pressing out oil from the fruitlets Step 5: Collecting the oil Source: MPOB 4 Fact 5: Oil palm’s economic potential was first realised in the 1960s when the Malaysian Government embarked on a poverty eradication programme through agricultural diversification by planting this crop to complement rubber.

The establishment of land schemes by the Federal Land Development Authority (FELDA) and the Federal Land Consolidation and Rehabilitation Authority (FELCRA) has resettled landless farmers on holdings by mainly growing oil palm. Today, FELDA manages about 723,394 hectares of oil palm plantations, providing employment to 90,511 farmers1. The land schemes are provided with basic amenities such as piped water, electricity, communications, roads, schools, healthcare facilities as well as greater employment opportunities in the economic activities spawned. 1 Source: FELDA (2011)

Currently, the Malaysian oil palm industry as a whole including the downstream sectors employs 860,000 people, both directly and indirectly.

Example of a Typical Worker’s House at a FELDA’s Oil Palm Estate

Source: MPOC 5 Background

Fact 6: The oil palm  rst planted in Tennamaran Estate was Dura - the fruit type with a thick shell. There are two other fruit types - Pisifera with no shell and Tenera with a thinner shell. Obviously, the thicker the shell, the less would be the oil-bearing mesocarp and the less the oil yield. Ideally, Pisifera should be planted, but it is largely female sterile and produces very few bunches. In practice, Tenera is planted as a compromise. At that time, the genetics of shell type was not known, but it was later discovered that Tenera is just a hybrid between Dura and Pisifera i.e. Dura x Pisifera = Tenera.

Oil Palm (Tenera): Basic Facts

Origin West Africa Average height increment (present palms) ~ 60cm/year Trunk diameter ~ 60cm No. of fronds produced per year ~ 24 Average length of frond 3 - 4m Leaf colour Green Colour of ripe fruit Usually yellowish red (there are also other colours) Nursery period 12 - 18 months st 1 harvesting ~ 30 months after  eld planting Harvesting cycle 2 - 3 weeks No. of bunches produced per palm 10 - 15 per year Average weight of bunch 10 - 20 kg No. of fruits per bunch 1000 - 3000 Shape of bunch Round or oval Fruit size (l x b) 5cm x 2cm Fruit weight ~ 10g Kernel content 3-8% per fruitlet Oil extraction rate 20% Palm oil yield ~ 4 tonnes/ha/year Planting density 136 - 160 palms/ha Economic lifespan 20 - 30 years Source:Quelle: MPOC (1995a) 6 Kern: Palmkernöl (PKO) Fruchtfleisch: Palmöl (PO) Fact 10: Oil palm is the most efficient oil-bearing crop in the world.

The table below shows that in comparison with other major oil crops, oil palm produces the highest tonnage of oil per hectare per year with minimum use of land area.

Oil Palm vs Other Major Oil Crops

Oil Palm 4.16 Average Oil Yield (t/ha/year)

Rapeseed 0.70 Sunfl ower 0.55 Soyabean 0.39

Average Oil Oil Production % of Total Oil Harvested Area % of Total Oil Crop Yield (mil tonnes) Production (mil ha) Harvested Area (t/ha/year) Soyabean 42.82 27.0 0.39 109.49 41.4 Sunf lower 13.81 8.7 0.55 25.23 9.5 Rapeseed 25.11 15.8 0.70 35.83 13.5 Oil Palm 62.34a 39.3 4.16 14.99 5.7 Totalb 158.44 264.77 Note: a combined tonnage of palm oil and palm kernel oil b only for 10 major oilseeds (i.e. cottonseed, groundnut, coconut, sesameseed, castorseed, linseed and the above) Source: Oil World (2014) 8 A) OILS & FATS TRADE

Part II: Palm Oil & Palm Kernel Oil

Source: MPOC 9 Oils & Fats Trade

Fact 11: The roles of palm oil and palm kernel oil in the global oils and fats scenario are prominent. i) Palm oil and palm kernel oil contributed the highest percentage (32.9%) of the total global production of oils and fats in 2013.

World Production of Oils & Fats in 2013 (Million Tonnes)

Butter 4.1% Sunf lower Oil Palm Oil & Palm Kernel Oil 7.3% 32.9%

Groundnut Oil 2.1%

Others 4.8%

Cottonseed Oil Soyabean Oil 2.6% 22.6% Lard & Tallow 8.9%

Rapeseed Oil 13.2% Total Production: 189.69 mil tonnes

Source: Oil World (2014)

10 ii) Palm oil and palm kernel oil were the most traded oils in the global oils and fats market with a market share of 62.5% in 2013.

World Exports of Oils & Fats in 2013 (Million Tonnes)

Coconut Oil 2.6% Fish Oil Soyabean Oil 1.0% 13.0%

Rapeseed Oil 5.5%

Others 2.4% Palm Oil & Palm Kernel Oil Corn Oil 62.5% 1.1% Olive Oil 1.2% Lard & Tallow Sunf lower Oil 2.2% 8.5%

Total Exports: 74.81 mil tonnes

Source: Oil World (2014)

11 iii) Of the total 190.9 million tonnes of oils and fats consumed in 2013, palm oil and palm kernel oil constituted the highest percentage (33.2%) of the total.

World Consumption of Oils & Fats in 2013 (Million Tonnes)

Olive Oil 1.6% Butter Others 4.0% Cottonseed Oil Lard & Tallow 4.9% 2.6% Coconut Oil 8.8% 2.1% Groundnut Oil Sunf lower Oil 2.1% 7.4%

Soyabean Oil Palm Oil & Palm Kernel Oil 22.6% 33.2% Rapeseed Oil 12.8%

Total Consumption: 190.90 mil tonnes

Source: Oil World (2014)

12 Fact 12: Malaysia is one of the largest producers and exporters of palm oil in the world.

In 2013, Malaysia produced about 19.26 million tonnes of palm oil from a mere 4.40 million hectares of matured area. The production and export of Malaysian palm oil is expected to increase in the future through improved planting materials and better plantation management. A Comparison of Annual Production of Palm Oil between Malaysia and Other Producers from 2009 - 2013 (Million Tonnes) 30 28.30

26.90 25 24.30

22.20 19.26 20 21.00 18.91 18.79 17.57 16.99

15 oduction of Palm Oil (mil tonnes)

10 8.61 8.56

Annual P r 8.05 6.68 6.70 5

0 2013 2012 2011 2010 2009

Malaysia Indonesia Others

Source: Oil World (2014, 2012) 13 A Comprasion of Annual Exports of Palm Oil between Malaysia and Other Exporters from 2009 - 2013 (Million Tonnes)

25 20.85 19.09 20 18.03 17.99 17.58 17.07 16.94 16.66 16.45 15.88 15 oduction of Palm Oil (mil tonnes) 10

Annual P r 4.49 5 4.14 4.05 3.43 3.42

0 2013 2012 2011 2010 2009

Malaysia Indonesia Others

Source: Oil World (2014, 2012)

14 Fact 13: Since domestic consumption of vegetable oils is relatively low in the country, Malaysia exports most of its palm oil and palm kernel oil. In 2013, Malaysia had the second biggest market share A Comprasion of Annual Exports of Palm Oil between Malaysia and Other in the global vegetable oils and fats trade with P.R of China emerging as the largest importer of its palm

Exporters from 2009 - 2013 (Million Tonnes) oil.

25 Malaysia’s Share (%) of the Global Oils and Fats Trade in 2013 20.85 19.09 Canada 18.03 17.99 Argentina Ukraine 3.6% Russia 20 4.6% 6.9% 2.3% Malaysia 17.58 17.07 16.94 USA 16.66 3.2% 26.2% 16.45 15.88 EU-28 15 3.7% oduction of Palm Oil (mil tonnes) 10

Others

Annual P r 18.4% 5 4.49 4.14 Indonesia 4.05 31.1% 3.43 3.42

0 Total Trade: 74.81 mil tonnes 2013 2012 2011 2010 2009 Malaysia’s Share: 19.58 mil tonnes

Source: Oil World (2014) Malaysia Indonesia Others

Source: Oil World (2014, 2012)

14 15 Fact 14: The Malaysian palm oil industry being the major player in the global oils and fats trade, has contributed billions of ringgit in export earnings to the country. In 2013, palm oil was the third largest contributor of Malaysia’s external trade after electrical & electronic products and crude petroleum & its products.

Export Earnings from the Malaysian Palm Oil Industry from 2005 - 2013 (RM billion) 90 Major Export Destinations for Malaysian Palm Oil in 2013 80.4 80 Pakistan Others 7.9% 31.2% 71.4 Japan 70 2.8% 65.2 Iran 61.3 3.5% 60 Vietnam 59.8 2.8% 50 49.7 45.2 India 40 12.9% P.R of China 31.8 20.4% 30 28.6 USA

5.6% EU-27 Export Earnings (RM bil) 20 12.9%

10 Total Export : 18.13 mil tonnes 0 Source: Malaysian Palm Oil Board (2014) 2013 2012 2011 2010 2009 2008 2007 2006 2005

Source: Malaysian Palm Oil Board (2014, 2011, 2009, 2007)

16 17 Fact 14: The Malaysian palm oil industry being the major player in the global oils and fats trade, has contributed billions of ringgit in export earnings to the country. In 2013, palm oil was the third largest contributor of Malaysia’s external trade after electrical & electronic products and crude petroleum & its products.

Export Earnings from the Malaysian Palm Oil Industry from 2005 - 2013 (RM billion) 90 80.4

71.4 70 65.2 61.3 60 59.8

50 49.7 45.2 40

31.8 30 28.6

Export Earnings (RM bil) 20

2013 2012 2011 2010 2009 2008 2007 2006 2005

Source: Malaysian Palm Oil Board (2014, 2011, 2009, 2007)

17 Malaysia’s External Trade in 2013 (RM billion)

Electrical & Electronic Products 32.9%

Natural Rubber 1.0% Timber & Timber-based Products 2.7% Palm Oil & Palm-based Products 8.8% Others Liquef ied Natural Gas (LNG) 33.5% 8.2%

Crude Petroleum & Its Products 12.9%

Total Trade RM 719.81 bil

Source: Department of Statistics, Malaysia (2014)

18 PalmPalm OOilil & & P aPalmlm K ernKernelel Oi lOil Proc Processingessing Flo wFlow Char Chartt

Fact 15: Palm oil processing  ow chart

Palm Oil ProcessingProcessing Flow Chart Malaysia’s External Trade in 2013 (RM billion)

OIL EXTRACTIONEXTRACTION ATAT MILL

Electrical & Electronic Products Sterilisationterilisation in in la largerge pressur pressure 32.9% vessels/cas/cages

FFBs enter the plant forfor StrippingStripping inin ro rotatingtating drum drum processing “Stripper”“Stripper”

Natural Rubber Transportationransportation o of FFBs ExtractionExtraction in in a a homogenous homogenous oil oil 1.0% mash usin g scrscrewew pre press s Timber & Timber-based Products 2.7% PuriPuriﬁ ccationation inin a a con continuoutinuou s CRUDE PALMPALM OIL clarilariﬁ ccaation tank Palm Oil & Palm-based Products 8.8% Others Liquef ied Natural Gas (LNG) 33.5% 8.2%

PhysicalPhysical (Steam)(Steam) Degumming andand Deacidifi ccationation andand Crude Petroleum & Its Products RefiRefi ning Pre-BleachingPre-Bleaching DeodorisationDeodorisation RBD 12.9% Palm Oil ChemicalChemical FattFatty AAcidcid DisDistillattillat e RefiRefi ning REFINING REFINING Total Trade RM 719.81 bil Degumming/ NBDD Bleaching DeodorisationDeodorisation NeutralisationNeutralisation PalmPalmalm Oil O

Source: Department of Statistics, Malaysia (2014) Soap StocStock AciAcid Oi l

Note: FFB= FreshFresh FruitFruit BunchBunch Sources:Source: MPOB MPOB (1992) (1992) 18 19 Fact 16: Palm kernel oil processing  ow chart

Palm Kernel Oil Processing Flow Chart (Mechanical Extraction)

PALM KERNEL

(A) Cleaning (C) Size Reduction

Flaking (B) Steam Conditioning

Screw Pressing

Coarse Screen Filter Expeller Cake

Filter Press Storage

Palm Kernel Oil

Storage (A) Direct screw pressing without kernel pre-treatment (B) Partial kernel pre-treatment followed by screw pressing (C) Complete pre-treatment followed by screw pressing Source: MPOB (1992)

20 Physical Characteristics of Palm Oil and Palm Kernel Oil

Fact 17: Physical characteristics of Malaysian palm oil

Physical Characteristics of Malaysian Palm Oil

Characteristic Mean (of 215 samples) Range Apparent density @ 50°C (*) (g/ml) 0.889 0.888 - 0.889 Refractive Index @ (*) 50°C 1.455 1.455 - 1.456 Solid fat content (+) 5°C 60.5 50.7 - 68.0 10°C 49.6 40.0 - 55.2 15°C 34.7 27.2 - 39.7 20°C 22.5 14.7 - 27.9 25°C 13.5 6.5 - 18.5 30°C 9.2 4.5 - 14.1 35°C 6.6 1.8 - 11.7 40°C 4.0 0.0 - 7.5 45°C 0.7 0.0 - 4.5 Slip melting point [°C] (+) 34.2 31.1 - 37.6 Source: * Chin, et al (1980) (+) Tan & Oh (1981)

21 Infrastructure of the Malaysian Oil Palm Industry

Fact 18: Physical characteristics of palm kernel oil Fact 19: The infrastructure for the Malaysian oil palm industry is rapidly developing to keep pace with the high global demand for palm oil, oleochemicals, and biodiesel.

Physical Characteristics of Palm Kernel Oil Distribution of the Malaysian Oil Palm Business and Ownership in 2013

Characteristic Mean Value OWNERSHIP OF PLANTED AREA Refractive Index 1.4509 Slip melting point [oC] 27.3 Private Estates : 62% Government/State Schemes : 24% Colour (Lovibond 5 ¼” cell) 5.5R 50Y Smallholders : 14% Colour (FAC) - Carotene content (from absorption at 446nm) 7.6 Solid fat content by Wideline NMR (%) at 5°C 72.8 10°C 67.6 15°C 55.7 SABAH 20°C 40.1 25°C 17.1 PENINSULAR MALAYSIA 1.48 mil ha : 28% 124 mills : 29% 30°C - 2.59 mil ha : 50% SARAWAK 14 refineries : 25% Source: Siew and Berger (1981) 247 mills : 57% 35 refineries : 64% 1.16 mil ha : 22% 17 oleochemical plants : 100% 63 mills : 14% 6 refineries : 11%

Source: Malaysian Palm Oil Board (2014)

22 23 Infrastructure of the Malaysian Oil Palm Industry

Fact 19: The infrastructure for the Malaysian oil palm industry is rapidly developing to keep pace with the high global demand for palm oil, oleochemicals, and biodiesel.

Distribution of the Malaysian Oil Palm Business and Ownership in 2013

OWNERSHIP OF PLANTED AREA Private Estates : 62% Government/State Schemes : 24% Smallholders : 14%

SABAH

PENINSULAR MALAYSIA 1.48 mil ha : 28% 124 mills : 29% 2.59 mil ha : 50% SARAWAK 14 refineries : 25% 247 mills : 57% 35 refineries : 64% 1.16 mil ha : 22% 17 oleochemical plants : 100% 63 mills : 14% 6 refineries : 11%

Source: Malaysian Palm Oil Board (2014)

23 Status of Malaysian Oil Palm Processing (mil tonnes/year)

2013 2012 Operating Operating Sector No. of Plant No. of Plant Capacity Capacity Milling 434 104.1 429 102.2 Refining 55 25.3 54 24.8 Kernel Crushing 45 7.1 46 7.0 Oleochemical 17 2.6 17 2.6 Biodiesel 13 2.0 10 1.5 Source: Malaysian Palm Oil Board (2014)

Status of Oleochemical Plants & Capacity in Malaysia at End 2012 (tonnes/year)

In Operation Not in Operation Under Planning Total State No. Capacity No. Capacity No. Capacity No. Capacity Johor 6 608,900 0 0 0 0 6 608,900 Penang 3 791,325 0 0 0 0 3 791,325 Selangor 6 817,746 0 0 0 0 6 817,746 Other States 2 381,000 0 0 1 60,000 3 441,000 Malaysia 17 2,598,971 0 0 1 60,000 18 2,658,971 Source: Malaysian Palm Oil Board (2013)

24 Part III: Techno-Economic Advantages of Palm Oil

Source: MPOC 25 Fact 20: The oil palm ensures a consistent and renewable supply of vegetable oil to meet the ever- increasing demand for oils and fats.

On average, one hectare of Malaysian oil palm produces 3.67 tonnes of palm oil per annum, with best fields producing up to 7-8 tonnes annually. The long natural economic lifespan of the oil palm tree ensures a consistent supply of palm oil to meet consumer demand.

Example of High-Yielding Palms

Source: UP Berhad

26 Fact 20: The oil palm ensures a consistent and renewable supply of vegetable oil to meet the ever- Fact 21: Palm oil is the least expensive vegetable oil to produce. increasing demand for oils and fats. Comparative Cost of Production of Selected Oils (USD/tonne)

Oil Cost (USD/tonne) Country/Region Palm 228 Malaysia Soyabean 400 USA Example of High-Yielding Palms Rapeseed 648 Canada Rapeseed 900 Europe Note: USD 1 = RM 3.80 (2004) Source: MPOB (2005)

Comparative Processing Costs for Palm, Soyabean and Sun ower Oils (RM)

Soyabean Oil/Sun owerseed Oil RBD Palm Oil Chemical Quantity (kg) Cost (RM) Quantity (kg) Cost (RM) Phosphoric Acid @ RM 2000/tonne 2 4.00 - - Caustic Soda Solid @ RM 1400/tonne 2.5 3.50 - - Bleaching Earth @ RM 800/tonne 30 24.00 10 8.00 Nickel Catalyst @ RM 26/kg 1 26.00 - - TOTAL COST 57.50 8.00 Savings for RBD Palm Oil 49.50 per tonne Note: USD 1 = RM 3.80 (2004) Source: MPOB (2005)

Source: UP Berhad

26 27 Fact 22: Palm oil is the most versatile oil as it can be used in various food applications without or with only minimal modi cation, as well as in non-food products such as oleochemicals, soaps and biodiesel. i) Palm oil has many of the required characteristics suitable for food applications. Being semi-solid at room temperature, it can be fractionated to produce downstream products such as olein, stearin, super olein, and palm mid fraction, which are used in various food products.

Food Uses of Palm Oil and Its Downstream Products

Double Palm Premium Fractionated Palm Mid Palm Mid Palm Stearin Palm Stearin Stearin Product Palm Oil Palm Oil Fraction Fraction (Hard) Olein (Soft) (Hard) (Super Olein) (Soft) (Hard) IV 20 - 30 IV > 30 IV < 20 IV1 > 60 Cooking Oil Ө Frying Fats Shortening/Dough Fats Vegetable Ghee ӨӨ Margarine Specialty Fats for Ө * Coatings Ice cream Fats Ө Chocolate Fats Ө Milk Fat Replacers Butter Oil Substitutes Confectionery Fats Non-dairy Creamer ● highly suitable ө suitable * minor application only Note: 1 Iodine Value Source: MPOC (2005b)

28 ii) In the oleochemical industry, palm oil and palm kernel oil are used to produce various chemical feedstock, such as fatty acids and fatty esters, which are required in the manufacturing of various non-food products. In addition, palm oil can also be directly used to produce biofuel. The Malaysian Government has implemented the National Biofuel Policy mandating the use of B5, a type of biofuel containing a mixture of 5% RBD palm olein and 95% diesel, for transport. The product has been launched as Envo Diesel.

Non-Food Applications of Palm Oil and Palm Kernel Oil

PALM OIL & PALM KERNEL OIL

Direct Route Oleochemical Route

Biodiesel Fatty Acids

Soap Fatty Esters

Expoxidised Palm Oil Fatty Alcohols Intermediate

Fattygy Nitrogen Comp ounds Consumer Polyols Products Fatty Alcohols Polyurethanes

Glyycerine Polyacrylates

Source: MPOB (2005)

29 Fact 23: Malaysia guarantees the quality of its palm oil to meet customer requirements.

The Malaysian palm oil producers and exporters are keenly aware that the quality of their palm oil is their sine qua non for future sales. In Malaysia, strict quality control is observed throughout the supply chain, i.e. from production to processing, re ning and shipping. The industry is regulated by various quality and food safety standards, such as the PORAM Speci cations for Processed Palm Oil and Ministry of Health Hazard Analysis & Critical Control Points (HACCP) standards.

Fact 24: Malaysian palm oil offers a wide range of speci cations to meet various requirements.

New technologies allow the Malaysian palm oil industry to diversify its downstream products such as processed palm oil, high-carotene palm oil (red palm oil), palm kernel cake and oleochemicals to satisfy requirements. Products which are not ‘on the shelf’ can be tailor-made for speci c uses.

30 Fact 25: Of the major oils and fats, palm oil is the most competitively priced.

Palm oil is competitively priced vis-a-vis other vegetable oils. With its guaranteed consistent supply, its price competitiveness is likely to continue into the future.

Price Performance of Palm Oil and Other Vegetable Oils (USD/tonne)

2200 2000 1800 1600 1400 1200 1000 800

Price (USD/tonne) 600 400 200 0

Jun-06 Nov-06 Apr-07 Sep-07 Feb-08 Jul-08 Dec-08 May-09 Oct-09 Mar-10 Aug-10 Jan-11 Jun-11 Nov-11 Apr-12 Sep-12 Feb-13 Jul-13 Dec-13 Jan-06

Crude Palm Oil (cif Dutch) Crude Degummed Soybean Oil (fob Dutch)

Sunflower Oil (fob EU) Rapeseed Oil (fob Dutch)

Source: Oil World (Jan 2006 - Dec 2013)

31 Fact 26: The oil palm produces renewable and sustainable raw materials for manufacturing other useful products.

The oil palm fronds can be fed to cattle and the trunk sawn into timber, or used to make medium-density fibreboard (MDF) and pulp. The empty fruit bunches (EFBs) can be used to make fibre or to mulch the palms (natural fertiliser).

Example of Furniture Made from Palm-based MDF Part IV: Palm Oil & Palm Kernel Oil Applications

Quelle: MPOC

Source:33 MPOC 33 Fact 27: A  ow chart on the versatility of palm oil and palm kernel oil in food and non-food applications

Versatility of Palm Oil & Palm Kernel Oil in Food and Non-Food Applications

FRESH CRUDE FRUIT Milling RBD Palm Oil PALM OIL Reﬁ ning Fractionation and BUNCHES Reﬁ ning Margarines Shortenings Technical Uses Vanaspati such as soap Frying Fats Ice Cream

Stearin Fractionation and Reﬁ ning Olein

Hydrogenation

Reﬁ ning Margarines CRUDE PALM Confectionery Ice Cream KERNELS Crushing KERNEL OIL Biscuit Creams

Fatty Acids

Splitting Glycerol Source: Pantzaris (1997)

34 Biodiesel

RBD Olein Frying, Cooking, Shortenings, Margarines

Palm Blending Cocoa Butter Equivalent Mid-Fraction Splitting Fatty Acids Soaps, Food, Emulsiﬁ ers

Soap

RBD Stearin Shortenings Margarines Fact 28: Palm oil is an excellent frying oil. Because of its lower unsaturation and high antioxidant content, palm oil does Soap not oxidise or polymerise as readily as other liquid oils in continuous high temperature use, conferring on it a longer life Confectionery Fats for frying. When used as frying oil, palm oil is non-sticky, non- foaming and offers a longer shelf life for products. Margarines Confectionery H.P.K.O. Coffee Whitener Frying Oils – Time to Reach End of Useful Life H.P.K. Olein Filled Milk Coating Fats Acid Value 2.5 Oxidised Acids 1% Oil (hours) (hours) Fatty Palm oil 130 103 Alcohol Hardened groundnut oil 140 92 Amines Coconut oil 100 125 Amides Groundnut oil 140 63 Soyabean oil 160 55 Hardened  sh oil 130 100 Emulsiﬁ ers Note: TakingTaking the two criteria together,together, palm oil has the longest shelf life Humectants of 103of hours. 103 hours. Explosives Source:Source: BergerBerger (2005)

35 Fact 29: Palm oil and palm kernel oil can be fractionated into, inter alia, olein, stearin, and palm mid fraction (PMF) for different food applications. Interesteri cation can be used to make even more products for other uses.

Fractionation of Palm Oil

RBD Palm Oil IV 50 0 - 55

Olein Stearin IV 56 - 60 IV 28 - 45

Super Olein Palm Mid Soft Stearin Hard Stearin IV 60 - 66 Fraction (PMF) IV 42 - 50 IV 15 - 25 IV 45 5 - 49

Soft PMF Hard PMF IV 46 IV 26

Mid Olein Super PMF IV 50 IV 35

Fractionation of Palm Kernel Oil

Crude Palm Kernel Oil IV 17 -18

Crude Palm Kernel Olein Crude Palm Kernel Stearin IV 23-26 IV 6.5-7.5

Source: MPOB (1992)

36 Part V: Palm Oil Nutritional Beneﬁ ts

Source: MPOC 37 Fact 30: Unlike other oils, palm oil is a balanced oil as it contains equal amounts of both unsaturated (mainly oleic) and saturated (mainly palmitic) fatty acids, with the former constituted mostly by the preferred monounsaturates.

Composition of Fatty Acids in Selected Oils

Oil Monounsaturates (%) Polyunsaturates (%) Saturates (%) Palm 40 10 50 Peanut 39 42 19 Olive 75 10 15 Corn 30 54 16 Soyabean 25 60 15 Saf ower 13 77 10 Coconut 5 1 94 Source: MPOC (1991)

Fact 31: The main saturated fatty acid in palm oil is palmitic acid which is neutral and does not raise blood cholesterol levels. Other saturated fatty acids, in particular myristic, are known for their cholesterol- raising effects.

Fatty Acid Composition of Palm Oil and Its Effects on Blood Cholesterol

Fatty Acid Composition (%) Effect on Blood Cholesterol Lauric (12:0) 0.2 Negative or neutral Myristic (14:0) 1.1 Cholesterol-raising Palmitic (16:0) 44.3 Neutral Stearic (18:0) 4.6 Neutral Oleic (18:1) 39.0 Lowersa Linoleic (18:2) 10.5 Lowersa Others (16:1, 18:3) 0.3 Lowersa Total in palm oil 100.00 Lowersa Note: a means cholesterol-reducing Source: Ong and Goh (2002)

38 Fact 32: As a result of its natural semi-solid state at room temperature, palm oil does not require hydrogenation in most food uses, thus obviating the problem of trans-fatty acids and uncommon cis- fatty acids, which are detrimental to health, in solid fat products. Source: Sundram, K, et al (2003)

Fact 33: A collaboration between researchers at the MPOB and Brandeis University, USA, has produced a blend of natural and cholesterol-free fats that readily meets the ideal balance of saturated, monounsaturated, and polyunsaturated fatty acids (1:1:1 ratio). This fatty acid ratio is recommended by the American Heart Association (AHA) in its effort to reduce the incidence of cardiovascular diseases (CVDs).2 Today, this blend of fats is commercially available as the Smart Balance products. 2Source: Sundram, K, et al (1996) Smart Balance® Range of Products

Source: GFA Brands Inc.

39 Fact 34: Numerous studies comparing the health effects of palm olein and olive oil (both high in oleic acid) have shown that palm olein and olive oil have similar bene cial cholesterol modulating effects in protecting humans against CVDs.

A Comparison between Palm Olein and Olive Oil on Their Effects on Cholesterol Modulation 180 200 160

140 150 120

100 mg/dl mg/dl 100 80

50 40

0 0 TC LDL-C HDL-C L/H Ratio TC LDL-C HDL-C L/H Ratio

Olive Oil Palm Olein Olive Oil Palm Olein

Source: Ng, et al (1992) Source: Choudhury, et al (1995)

Note: Both studies showed that palm olein and olive oil have comparable effects on total cholesterol (TC), low-density lipoprotein cholesterol (LDL-C) and high-density lipoprotein cholesterol (HDL-C) and ratio of low-density/ high-density cholesterol (L/H).

40 Fact 35: Palm oil is one of the 17 edible oils which have been accepted as meeting the FAO/WHO Food Standard requirements under the CODEX Alimentarius Commission Programme. Source: FAO/WHO (1983)

Fact 36: Like all vegetable oils, palm oil is cholesterol-free. Cholesterol Content in Selected Oils and Fats

Oil/Fat Range (ppm or mg/kg) Mean (ppm or mg/kg) Palm (mesocarp) 13 - 19 18 Palm (kernel) 9 - 40 17 Sun ower 8 - 44 17 Soyabean 20 - 35 28 Rapeseed 25 - 80 53 Cottonseed 28 - 108 44 Coconut 5 - 24 14 Maize 18 - 95 50 Cocoa Butter* n.a 59 Beef Tallow* 800 - 1400 1100 Butter* 2200 - 4100 3150 Lard* 3000 - 4000 3500 Note:* Gunstone, F.D, et al (1986) Source: Downes, M.J (1982, 1983, 1984, 1985)

Fact 37: A number of recent controlled human studies in Europe, the USA and Asia have con rmed that there is no signi cant rise in serum total cholesterol when palm oil, providing most of the dietary fat, is used as an alternative to other fats in the habitual diet. In these studies, the level of HDL cholesterol, regarded as bene cial, was unaltered or signi cantly raised. Source: Sundram, K, et al (1992)

Fact 38: The content of Lipoprotein (a) in blood plasma, a potent risk factor for coronary heart disease, was signi cantly reduced when palm oil provided most of the dietary fat. Source: Honstra, G, et al (1991)

41 Fact 39: Re ned palm oil, as used in foods, is a rich source of tocotrienols and tocopherols having Vitamin E activity. Re ned palm oil still contains a high amount of Vitamin E, up to 500 ppm.

Tocopherols (T) and Tocotrienols (T3) Determined in Vegetable Oils (mg/kg)

Oil α-T β-T γ-T δ-T α-T3 γ-T3 δ-T3 Cocoa butter 11 - 170 17 2 - - Coconut* - - - 3 20 - - Corn* 134 18 412 39 - - - Cottonseed 573 40 317 10 - - - Groundnut 169 5 144 13 - - - Mustard 75 - 494 31 - - - Olive 93 - 7 ---- Palm 150 - - - 117 297 80 Palm* 133 - - - 130 204 45 Rape* 70 16 178 7 - - - Rice bran* 249 15 47 - 167 141 - Saf ower 477 - 44 10 - - - Soyabean* 116 34 737 275 - - - Sun ower* 608 17 11 - - - Note:* Re ned oils Source: Ong A.S.H (1993)

Fact 40: Palm tocotrienols have been demonstrated in human and animal studies to reduce the production of cholesterol in the body. A study at the University of Wisconsin, USA, showed that palm tocotrienols inhibit the action of enzymes that are responsible for the production of cholesterol in the body. Source: Qureshi, A, et al (1995)

Fact 41: Palm tocotrienols are also showing much promise in cancer research. A number of studies have demonstrated that palm tocotrienols can inhibit the growth of cancer cells. Source: Nesaretnam, K, et al (2005)

42 Fact 42: Compared to a number of other edible oils, dietary palm oil reduces the number of chemically- induced tumours in rats.

Effect of Palm Oil and Other Fats on Cancer Development

30 Tumour Incidence (%) Tumour 20

5% Corn oil 20% Palm oil 20% Lard 20% Beef Fat

Note: A 20% palm oil diet was protective and comparable to a low fat (5%) corn oil diet than the 20% lard and 20% beef fat diets. Source: Sylvester, P.W, et al (1986)

43 Fact 43: Red palm oil (RPO) is the only commercially-available re ned oil that contains substantial amounts of carotenoids as well as Vitamin E. There is a bouquet of more than 20 carotenes in red palm oil which explains its deep red colour. RPO contains about 50 milligrams of carotenes in every 100 grams of oil (500 ppm), mostly as beta-carotene (55%) and alpha-carotene (35%).

Carotene Composition of Re ned Red Palm Oil and Crude Palm Oil

Carotene Re ned Red Palm Oil (%) Crude Palm Oil (%) Phytoene 2.0 1.3 Phyto uene 1.2 0.1 Cis-ß-carotene 0.8 0.7 ß-carotene 47.4 56.0 ά-carotene 37.0 35.1 Cis- ά-carotene 6.9 2.5 γ-carotene 1.3 0.7 ζ-carotene 0.5 0.3 δ-carotene 0.6 0.8 Neurosporene trace 0.3 ß-Zeacarotene 0.5 0.7 α-Zeacarotene 0.3 0.2 Lycopene 1.5 1.3 Total (ppm) 545 673 Source: Ooi, C and Choo, Y.M (1994)

Fact 44: Like other edible oils and fats, palm oil is readily digested, absorbed and utilised as a source of ready energy. Re ned palm oil and its processed fractions, palm olein and palm stearin, are in fact 95-97% digestible, which is within the digestibility range of 93-99% for most edible oils and fats. Source: Ng, et al (1988,1987)

44 Part VI: Oil Palm & The Environment

Source: IJM, Cede 45 Fact 45: An oil palm plantation is more effective than the rainforest in generating new biomass, which is a potential renewable fuel.

A comparative study by Henson [1999] showed that an oil palm plantation assimilated up to 36.5 tonnes of dry matter/ha/year, which is better than the 25.7 tonnes assimilated by natural rainforest.

Fact 46: Oil palm plantations are as effective as rainforests in acting as a carbon sink to absorb carbon dioxide.

The same study by Henson also showed that the oil palm plantation is capable of accumulating up to 8.3 tonnes of biomass/year, which is higher than 5.8 tonnes accumulated by the rainforest.

A Comparison of Some Physiological Parameters of Oil Palm and Tropical Rainforest

Parameter Oil Palm (plantation) Rainforest

Gross assimilation (t CO2/ha/yr) 161.0 163.5

Total respiration (t CO2/ha/yr) 96.5 121.1

Net assimilation (t CO2/ha/yr) 64.5 42.4 Leaf area index 5.6 7.3 Photosynthetic ef ciency (%) 3.18 1.73 Radiation conversion ef ciency (g/M) 1.68 0.86 Standing biomass (t/ha) 100 431 Biomass increment/yr (t) 8.3 5.8 Dry matter productivity/yr (t) 36.5 25.7 Source: Henson (1999)

46 Fact 47: Oil palm is an energy-ef cient crop that requires the least energy input to produce a tonne of oil.

In comparison to all other oil crops, the cultivation of oil palm requires the least inputs of agrochemicals and fossil fuel.

Input-Output in Cultivating Oil Palm and Other Oil Crops

Item and unit Inputs to produce one tonne of oil by the crop Palm Oil Soyabean Oil Sun ower Oil Rapeseed Oil Seed/fruit for extraction (kg) 4500* 5000 2500 2500 Inputs i) Nitrogen (kg N) 47 315 96 99

ii) Phosphate (kg P2O5) 8 77 72 42 iii) Pesticides and herbicides (kg) 2 29 28 11 iv) Others (kg) 88 117 150 124 v) Energy (GJ) 0.5 2.9 0.2 0.7 Outputs a) Emission to soil and water i) Nitrogen 5 32 10 10 ii) Phosphates 2 23 22 13 iii) Pesticides/herbicides 0.4 23 22 9 b) Emission to air (kg)

- NOX 0.5 4 0.3 0.8

- SO2 0.2 2 0.1 0.2

- CO2 32 205 16 50 - Pesticides/herbicides 0.1 6 6 2 Note: * Fruit bunches Source: FAO (1996)

47 Input-Output in Processing Oil Palm Fruits and Other Oilseeds to Vegetable Oils and Meals

Item and unit Input-output per tonne of oil Palm Oil Soyabean Oil Sun ower Oil Rapeseed Oil Seed/fruit for extraction (kg) 4500 FFB* 5000 2500 2500 Final Product : oil (kg) 1000 1000 100 1000 : meal 200 1500 1500 4000 Input for extraction Solvent (Hexane) (kg) nil 4.3 4 4 Energy (GJ)1 a 2.2 3 3 Emission to air (kg) - Solvents nil 4.3 3.8 3.9

- NOX - 0.1 0.3 0.3

- SO2 - 0.2 0.7 0.7

- CO2 - 56 164 164 Emission to water (kg) - COD2 2 Negligible Negligible Negligible Notes: * Fruit bunches a The fuel for producing all the steam required to process the fruits is the fruit residues, e.g.  bre and shell 1 Total is underestimated, as the energy for producing the solvent (hexane) is not included. 2 COD = Chemical Oxygen Demand. Source: Singh (1999)

48 Fact 48: Oil palm leads other crop in terms of energy balance.

A Comparison of Energy Input & Output for Producing Palm, Soyabean and Rapeseed Oils (GJ/ha)

Oil palm is the most ef cient crop, producing the highest energy output:input ratio. In absolute terms, oil palm also requires the lowest inputs of pesticides, fertilisers, and fuel for unit production of oil.

200 182 180

160

140

120

100

80 70 Energy, GJ/ha Energy,

60 50 Input 40 23 19 20 20 Output 0

Oil palm Soyabean Rapeseed

Source: Wood and Corley (1991)

49 Fact 49: The Malaysian oil palm industry uses sustainable practices to ensure that the environment and biodiversity are not harmed by the cultivation of the crop. Indeed, the Malaysian oil palm plantations have adopted a set of Good Agricultural Practices (GAPs) to minimise the impact of their activities on the environment. i) Integrated Pest Management (IPM) minimises the use of pesticides by depending more on biological control to protect the palm trees. Some examples are the barn owl to control rats; parasitoids, predatory insects and entomofungi against leaf-defoliating insects, as well as the Cassia Cobanensis plant that attracts the bagworm’s natural predator (insects). The fewer chemicals used, the less the environment is damaged.

A Predatory Insect and Barn Owl in An Oil Palm Field

Source: MPOC

50 ii) Biological control is also used in weed control, for example, grazing ruminants under the palms, and by planting a legume cover to  x nitrogen and smother weeds. The leguminous cover also prevents soil erosion and improves the soil tilth and rainfall retention.

A Leguminous Cover Plant in an Oil Palm Field

Source: UP Berhad

51 iii) Zero-burning is practised in clearing the old stand of trees during replanting, i.e. the old palms are pushed over and shredded and left to decompose in situ. There is, therefore, no air pollution from burning the old palms and most importantly, the nutrients in the old crop are recycled into the new.

Zero-burning During Replanting

Shredding Mulching Two months after replanting

Six months after replanting High-yielding oil palms

Source: UP Berhad

52 Available Nutrients and Fertiliser Equivalent in Oil Palm Biomass at Replanting (per ha basis)

Palm Residue Dry Matter (tonne/ha) N (kg/ha) P (kg/ha) K (kg/ha) Mg (kg/ha) Above-ground 85 577 50 1255 141 Below-ground 16 65 8 129 15 Total 101 642 58 1384 156 A/S CIRP MOP KIES Fertiliser Equivalent (kg) 3060 370 2770 1000 *Monetary value (RM 5,603) 2142 159 2742 560 A/S = Ammonium Sulphate CIRP = Christmas Island Rock Phosphate MOP = Muriate of Potash KIES = Kieserite Note: *Based on fertiliser price in Jan 2005: A/S: RM 700/tonne, CIRP: RM 430/tonne, MOP: RM 990/tonne, KIES: RM 560/tonne. Source: Khalid, et al (1999a and 1999b) iv) Hilly land is contoured with back slopes for planting. The terraces are mulched along their length with a line of pruned fronds to minimise soil erosion and water run-off. Example of Terracing in an Oil Palm Plantation

Source: IJM, Cede

53 Fact 50: The expansion of oil palm cultivation in Malaysia does not encroach into forest areas.

The increase in oil palm areas in Malaysia is either through the planting of idle land or conversion from other Changes in Land Use under Selected Tree Crops in Malaysia crops. Since 1990, 1.378 mil ha of land which used to be under other crops, had been converted to oil palm. Oil palm is planted on 4.85 mil ha, which is about 14.8 % of the total land area of Malaysia. The country has at least 18.31 mil ha, or 55.7% of its total land area under forests, national parks, wildlife or bird sanctuaries and nature Oil Palm Oil Palm reserves. 44.4% 81.5% Permanent Forests in Malaysia at End 2005 (Million hectares)

Region Total Permanent Reserved National Stateland Total of PRF, % of Coconut Land Forest (PRF) Park, Forest National Park, Total 6.8% Wildlife/Bird Coconut Area Protection (Conversion Wildlife/Bird Land Production Sanctuaries 1.8% Forest Forest) Sanctuaries & Area Cocoa Forest & Nature Nature Reserves 8.6% Reserves Cocoa Peninsular 13.16 3.18 1.52 0.93* - 5.63 42.8 0.4% Malaysia Sabah 7.37 3.01 0.59 0.41** - 4.01 54.4 Rubber Rubber Sarawak 12.33 6.00 1.00 1.10 0.57 8.67 70.3 40.2% 16.3% Total 32.86 12.19 3.11 2.44 0.57 18.31 55.7 Notes: * A total of 0.26 mil is located within the PRFs in Peninsular Malaysia 1990 = 4.57 m il ha 2013 = 6.41 mil ha ** A total of 0.13 mil ha is located within the PRFs in Sabah Source: Thang, C.H (2007) Total Planted Area (Million ha) Changes in Area under the Main Tree Crops in Malaysia (mil ha) Crop Year 1990 Year 2013 Year Oil Palm Rubber Cocoa Coconut Total Oil palm 2.029 5.230 2008 4.488 1.247 0.021 0.112 5.868 Rubber 1.837 1.048 2009 4.691 1.028 0.017 0.100 5.836 Cocoa 0.393 0.023 2010 4.853 1.020 0.019 0.105 5.997 Coconut 0.314 0.113 2011 5.000 1.027 0.021 0.106 6.154 Total 4.573 6.414 2012 5.077 1.042 0.022e 0.112 6.253 Source: Malaysian Palm Oil Board (2014, 2011, 2009), Malaysian Rubber Board (2014), Malaysian Cocoa Board (2014), 2013 5.230 1.048e 0.023e 0.113e 6.414e Ministry of Plantation Industries & Commodities, Malaysia (2011) e estimated figures Source: Malaysian Palm Oil Board (2014, 2011, 2009), Malaysian Rubber Board (2014), Malaysian Cocoa Board (2014), Since 1990, rubber, cocoa and coconut had collectively lost 1.36 mil ha, which were mainly Ministry of Plantation Industries & Commodities, Malaysia (2013) converted to oil palm. 54 55 Fact 50: The expansion of oil palm cultivation in Malaysia does not encroach into forest areas.

Region Total Permanent Reserved National Stateland Total of PRF, % of Coconut Land Forest (PRF) Park, Forest National Park, Total 6.8% Wildlife/Bird Coconut Area Protection (Conversion Wildlife/Bird Land Production Sanctuaries 1.8% Forest Forest) Sanctuaries & Area Cocoa Forest & Nature Nature Reserves 8.6% Reserves Cocoa Peninsular 13.16 3.18 1.52 0.93* - 5.63 42.8 0.4% Malaysia Sabah 7.37 3.01 0.59 0.41** - 4.01 54.4 Rubber Rubber Sarawak 12.33 6.00 1.00 1.10 0.57 8.67 70.3 40.2% 16.3% Total 32.86 12.19 3.11 2.44 0.57 18.31 55.7 Notes: * A total of 0.26 mil is located within the PRFs in Peninsular Malaysia 1990 = 4.57 m il ha 2013 = 6.41 mil ha ** A total of 0.13 mil ha is located within the PRFs in Sabah Source: Thang, C.H (2007) Total Planted Area (Million ha) Changes in Area under the Main Tree Crops in Malaysia (mil ha) Crop Year 1990 Year 2013 Year Oil Palm Rubber Cocoa Coconut Total Oil palm 2.029 5.230 2008 4.488 1.247 0.021 0.112 5.868 Rubber 1.837 1.048 2009 4.691 1.028 0.017 0.100 5.836 Cocoa 0.393 0.023 2010 4.853 1.020 0.019 0.105 5.997 Coconut 0.314 0.113 2011 5.000 1.027 0.021 0.106 6.154 Total 4.573 6.414 2012 5.077 1.042 0.022e 0.112 6.253 Source: Malaysian Palm Oil Board (2014, 2011, 2009), Malaysian Rubber Board (2014), Malaysian Cocoa Board (2014), 2013 5.230 1.048e 0.023e 0.113e 6.414e Ministry of Plantation Industries & Commodities, Malaysia (2011) e estimated figures Source: Malaysian Palm Oil Board (2014, 2011, 2009), Malaysian Rubber Board (2014), Malaysian Cocoa Board (2014), Since 1990, rubber, cocoa and coconut had collectively lost 1.36 mil ha, which were mainly Ministry of Plantation Industries & Commodities, Malaysia (2013) converted to oil palm. 54 55 Fact 51: The Malaysian palm oil industry is committed to adhering to the Principles & Criteria (PnC) of the Roundtable on Sustainable Palm Oil (RSPO); widely regarded as the world’s most stringent certification scheme available today for sustainable palm oil. Currently, Malaysia produces about 4.31mil tonnes of RSPO-certified palm oil from 928,562 ha of oil palms. This is expected to rise in future.

Overview of the Malaysian Palm Oil Industry Performance in the Production of RSPO-Certified Palm Oil as of Dec 2013

Company No. of Palm Oil Palm Mills (tonnes) Kernels (tonnes) Sime Darby Plantations Berhad 38 1,390,795 340,144 IOI Group 12 712,146 177,968 FELDA 17 582,515 142,859 Kuala Lumpur Kepong Berhad 12 550,068 130,556 PPB Oil Palms Berhad 8 420,669 89,156 United Plantations Bhd 6 157,125 39,990 Kulim (Malaysia) Berhad 3 112,431 31,043 Hap Seng Plantations Holdings Bhd 2 105,147 24,176 TDM Plantations Sdn. Bhd. 1 64,816 16,830 Carotino/JC Chang Group 2 64,135 16,021 Johor Corporation 2 50,766 13,471 Tennamaram Oil Mill 1 48,526 13,019 Keresa Plantations 1 32,338 6,335 Boustead Plantations Berhad 1 14,780 2,866 TOTAL 106 4,306,257 1,044,434 Source: Roundtable on Sustainable Palm Oil (2014) Fact 52: In 2013, Malaysian oil palm produced 21.5 million tonnes of vegetable oils, accounting for 13.1% of total global production of 164.2 million tonnes. This was achieved with only 4.4 million hectares of harvested area, which represents about 1.7% of the world’s 10 major oilseed area. Oil Palm - A Malaysian Sustainable Achievement

Total Harvested Area (mil ha) Total Oil Production (mil tonnes) Malaysian Oil Palm 4.4 21.5a World’s 10 Major Oilseeds 264.8 158.4 Note: a for both palm and palm kernel oils Source: Oil World (2014)

56 Part VII: The Malaysian Oil Palm Industry

Overview of the Malaysian Palm Oil Industry Performance in the Production of RSPO-Certified Palm Oil as of Dec 2013

Oil Palm - A Malaysian Sustainable Achievement

56 Source: MPOC 57 The Malaysian Oil Palm Industry

The industry can be divided into three levels - plantation, milling, and ref ining - represented by their respective association(s) to coordinate mutual and separate interests. The Malaysian Palm Oil Association (MPOA) represents the planters or growers and the Federation of Palm Oil Millers’ Associations of Malaysia (POMA) speaks for the millers. The ref iners are represented by the Palm Oil Ref iners’ Association of Malaysia (PORAM). The oil palm industry is closely linked to its sister industry - the oleochemical sector - represented by the Malaysian Oleochemicals Manufacturers’ Group (MOMG).

To ensure that all the activities do not pose problems, the industry is subject to several laws and regulations, making it one of the most regulated industries in the world. Some of the laws and regulations include the Land Acquisition Act 1960, Protection of Wildlife Act 1972, Environmental Quality (Clean Air) Regulation 1978, Pesticides Act 1974 (Pesticides Registration) Rules 1976, Labour Law, Workers’ Minimum Standard of Housing and Amenities Act, Hazard Analysis & Critical Control Points (HACCP), and Occupational Safety and Health Act 1977.

Through its long, colourful and historic journey, the Malaysian oil palm industry has and will continue to prosper while continuing to assume a signif icant role in the country. The good demand for the oil as well as new opportunities in the form of biodiesel as an alternative fuel will ensure that the journey forward will be equally exciting.

The Malaysian oil palm industry is undoubtedly the pride of the nation.

58 The Malaysian Oil Palm Industry

The oil palm industry has been the backbone of Malaysia’s social and economic development. Since more than 90% of its production is exported, the industry is one of the top earners for the country, contributing about RM 61.3 billion in foreign exchange in 2013. It also gives employment to close to 1 million people, making it the second biggest employer after the government. From its humble beginnings in the 1960s, the Malaysian oil palm industry has expanded and flourished while learning its way about to its present state of excellence. Today, the industry is well-developed and at its strongest ever. Currently, the sector is under the Ministry of Plantation Industries and Commodities, under which two agencies are responsible for its progress and promotion - the Malaysian Palm Oil Board (MPOB) and the Malaysian Palm Oil Council (MPOC). These agencies undertake R&D, promotion and marketing, regulatory and enforcement functions, as well as provide economic and technical advisory services. This is done to ensure that the industry will continually achieve higher yields, offer more products as well as increase its share of the global D-1-11, Setiawangsa Business Suite oils and fats market. Jalan Setiawangsa 11, Taman Setiawangsa 54200 Kuala Lumpur The industry can be divided into three levels - plantation, milling, and ref ining - represented by their respective Tel: +6(03) 4251 0984 association(s) to coordinate mutual and separate interests. The Malaysian Palm Oil Association (MPOA) represents Fax: +6(03) 4266 4444 the planters or growers and the Federation of Palm Oil Millers’ Associations of Malaysia (POMA) speaks for the millers. The ref iners are represented by the Palm Oil Ref iners’ Association of Malaysia (PORAM). The oil palm industry is closely linked to its sister industry - the oleochemical sector - represented by the Malaysian Oleochemicals Manufacturers’ Group (MOMG).

The Malaysian oil palm industry is undoubtedly the pride of the nation.

58 61

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29) Ministry of Plantation Industries & Commodities, Malaysia. (2011). Statistics on Commodities 2010. 24th ed. Putrajaya. pp. 12

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61 31) Ng, T. K. W., K. C. Hayes and et al. (1992). "Dietary palmitic and oleic acids exert similar effects on serum cholesterol and lipoprotein profiles in normocholesterolemic men and women." J.Am. Coll. Nutr. 11(4): pp. 383-90.

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43) Siew, WL and K.G. Berger. (1981). Malaysian palm kernel oil chemical and physical characteristics, PORIM Technology No. 6.

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62 47) Sundram, K. and et al. (1992). “Replacement of dietary fat with palm oil: Effect on human serum lipid, lipoproteins and apolipoproteins.” Br. J. Nutr. 68: pp.677-692.

48) Sylvester, P.W. and et al. (1986). “Comparative effects of different vegetable fats fed before and during carcinogen administration on mammary tumorigenesis, sexual maturation, and endocrine functions in rats.” Cancer Res. 46: pp. 757-62.

49) Tan, BK and FCH Oh. (1981). Malaysian palm oil chemical and physical characteristics. PORIM Technology No. 3.

50) Thang, C.H. (2007). An Outlook of The Malaysian Forestry Sector in 2020. Kuala Lumpur. Oct 2007. A report for the Malaysian Forestry & Timber Industry

51) Wood, B.J. and R.H.V. Corley. (1991). The energy balance of oil palm cultivation. Proceedings of 1991 PORIM International Palm Oil Conference. Malaysian Palm Oil Board, Kuala Lumpur, pp. 130-43. Literaturhinweise Further Readings

1) Chan. C.K. (2002). Oil palm carbon sequestration and carbon accounting: our global strength. Paper presented at the MPOA Seminar 2002: R&D for Competitive Edge in the Malaysian Palm Oil Industry. Malaysian Palm Oil Association. 19 – 20 Mar 2002. Bangi. pp. 17.

2) Corley. H. (1999). New technologies for plantation crop improvement. Paper presented at the Tropical Agriculture Association Conference on Advancing Biotechnology in Developing Countries. The Royal Agricultural College. 2 Dec 1999. Cirencester.

3) Davidson, L. (2002). Challenges the Critics. Global Oils & Fats. Malaysian Palm Oil Council. Vol. (4). Kelana Jaya. pp. 12 – 15.

4) Halsall, I.L. (2010). The Best-Kept Secret for Reversing Climate Change?. Subang Jaya, Malaysia.

5) Khairuddin. H. (2003). MPOA’s endeavour towards sustainable agriculture. Paper presented at the MPOA Seminar 2003: Good Agricultural Practice and Food Safety in the Oil Palm Industry. Malaysian Palm Oil Association. 24 - 25 Feb 2003. Kuala Lumpur. pp. 15.

6) Malaysian Palm Oil Council. (2006). Palm Oil & Palm Kernel Oil Applications. Malaysian Palm Oil Council. Kelana Jaya.

Danksagung7) Pushparajah, E. (1998). The oil palm – a very environmentally friendly crop. The Planter. 74 (863). pp. 63 - 72.

8) Spiller, G. (2004). The Trans Fat Dilemma and Natural Palm Oil. Pascoe Publishing. California. USA.

Wir danken den Mitgliedern des Redaktionsausschusses des MPOC und MPOB sowie insbesondere dem Hauptgeschäftsführer des Malaysischen Palmölrats und dem Generaldirektor der Malaysischen Palmölbehörde für Ihre Mitarbeit an dieser63 Informationsbroschüre. Acknowledgement

We wish to thank the Editorial Committee members from MPOC and MPOB and extend special appreciation to the Chief Executive Officer of Malaysian Palm Oil Council and Director-General of Malaysian Palm Oil Board.

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