Malaysia’s ageing oil palm plantations to hit 2 million hectares by 2027
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About 800,000ha of the plantations were infected by the ganoderma fungal disease.
PHOTO: REUTERS
KUALA LUMPUR - Malaysia’s ageing oil palm plantations are expected to rise to 2 million ha by 2027 from the current level of around 1.7 million ha, an industry official said on Feb 10, putting pressure on output from the world’s second largest producer.
About 35 per cent of Malaysian oil palm plantations will be 19 years or older by 2027, compared to around 30 per cent in 2026, said Datuk Carl Bek-Nielsen, chairman of the Malaysian Palm Oil Council, during an industry conference in Kuala Lumpur on Feb 10.
He also warned that about 800,000ha of the plantations were infected by the ganoderma fungal disease.
“Our yields have plateaued, our yields have stagnated and from a certain degree our yields have also regressed. The palm industry must do more to raise its yield per hectare,” Mr Bek-Nielsen said.
He said he believed the industry could use high yielding planting materials to increase the average yield to 4.5 tonnes of crude palm oil per hectare, up from the current 3.5 tonnes, and bring total output to 26 million tonnes by 2035.
Malaysia produced 20.3 million tonnes of crude palm oil in 2025, according to Malaysian Palm Oil Board data.
The government has allocated RM20 million (S$6.45 million) in 2026 to support automation and mechanisation in oil palm plantation technologies in an effort to boost production, Malaysia’s Plantation and Commodities Minister Noraini Ahmad said earlier at the conference.
Mr Bek-Nielsen added that land seizures in rival producer Indonesia will see its supply suffer over the next six to eight months as companies hold back on plantation upkeep and fertiliser inputs.
Indonesia’s forestry task force in 2025 seized around 4.1 million ha said to be operating illegally in forest areas, targeting both major oil palm companies and smallholder farmers.
The enforcement campaign is set to expand further in 2026, with the government looking to seize an additional four million to five million ha of plantations.
Mr Bek-Nielsen said that the postponement of Indonesia’s B50 programme would also be bearish for the market.
He added that crude palm oil prices were expected to trade at between RM3,900 and RM4,000 per tonne in 2026.
The average CPO closing price in 2025 stood at RM4,233.
Indonesia in January announced that it was scrapping plans to implement the mandatory B50 grade for palm oil-based diesel in 2026 due to technical and funding concerns.
The government said its B40 mandate, which uses a blend of 40 per cent palm oil-based biodiesel, will remain in place.
REUTERS
