Palm Oil Production and Export

2. Palm Oil Production and Export

Following the rapid expansion in plantation hectarage, the annual palm oil and palm kernel production has increased significantly. According to Table 3.4, palm oil production in 1975 was 1.257 million tonnes and this has multiplied by 11 times more to 13.976 million tonnes in 2004. Whilst palm kernel production has increased about 15 times more from 0.232 million tonnes in 1975 to 3.661 million tonnes in 2004. Palm oil and palm kernel production have steadily increased over the years except in 1998. Palm oil and palm kernel production faced a slight decrease in 1998 due to the effects of prolonged El Nino to the climatic conditions in 1996-1997 as well as its own natural decline during the biological cycle of the palm Hai, 2000. Table 4. Annual Productions of Palm Products, 1975-2004 tonnes Year Crude Palm Oil Palm Kernel Crude Palm Kernel Oil Palm Kernel Cake 1975 1,257,573 232,821 108,260 n.a 1979 2,188,699 475,039 195,577 244,825 1981 2,822,144 588,783 243,354 339,107 1985 4,134,463 1,211,887 511,908 633,316 1987 4,531,960 1,311,218 562,861 725,993 1989 6,056,501 1,793,690 745,481 933,482 1990 6,094,622 1,844,737 827,233 1,038,221 1991 6,141,353 1,785,218 782,133 955,324 1992 6,373,461 1,874,367 811,978 984,193 1993 7,403,498 2,266,104 965,677 1,183,431 1994 7,220,631 2,203,929 978,143 1,222,747 1995 7,810,546 2,395,588 1,036,538 1,293,144 1996 8,385,886 2,488,750 1,107,045 1,383,034 1997 9,068,728 2,638,068 1,164,697 1,435,104 1998 8,319,682 2,429,468 1,110,745 1,345,277 1999 10,553,918 3,025,690 1,338,905 1,624,134 2000 10,842,095 3,162,760 1,384,685 1,639,227 2001 11,803,788 3,367,710 1,531,917 1,781,641 2002 11,909,298 3,268,635 1,472,932 1,714,522 2003 13,354,769 3,627,235 1,644,126 1,910,100 2004 13,976,182 3,661,456 1,644,445 1,894,017 Source : Department of Statistics, Malaysia : 1975-198 MPOB : 1986-2004 Rulianda Purnomo Wibowo : Palm Oil Contribution To Malaysian Economy, 2008 USU Repository © 2008 Palm oil has been the major contributor to Malaysia’s export earning, and its role was particularly significant during the 19971998 financial crisis that caused a marked decline in the Malaysian GDP. In tandem with palm oil production expansion, export of palm oil products to foreign countries also increased. Several palm oil products that have been exported to foreign countries included crude palm oil, processed palm oil, crude palm kernel oil, processed palm kernel oil, palm kernel oil and palm kernel cake. Table 3.5 refers to the largest palm product export that is crude palm oil. Palm oil exports in 1975 accounted to 0.726 million tonnes and have increased substantially about 17 times to 12.575 million tonnes in 2004. Malaysian palm oil export value is constantly influenced by two major factors: palm oil annual production and price. Palm oil annual production in Malaysia has always had a steady increase but on the contrary, the price of palm oil has been volatile over the years. It would appear from Table 3.6 that the biggest palm oil export was in 1998, amounting to RM 22.65 million or 48.54 of the total agricultural export earning. Hence, it emerged as the top export earner, exceeding the contribution from crude petroleum, petroleum products and forestry. The 1998 earning from palm oil was 178 higher than that of the previous year and this was attributed to the sharp increase in CPO prices. In 1998, CPO fetched an average FOB price of RM 2,377 per tonne compared with RM 1,358 in 1997, an increase of 175. Export value in 1999-2001 was lower than 1998 due to the sudden decline in CPO prices. CPO prices increased again in 2002-2004 resulting in an increase in export value earnings. Rulianda Purnomo Wibowo : Palm Oil Contribution To Malaysian Economy, 2008 USU Repository © 2008 Table 5. Annual Export of Palm Oil Products, 1975-2004 tonnes Year Crude Palm Oil Processed Palm Oil Palm Oil Crude Palm Kernel Oil Processed Palm Kernel Oil Palm Kernel Oil Palm Kernel Cake 1975 957,411 215,515 726,187 n.a. n.a. 109,153 n.a. 1976 882,300 457,805 941,827 n.a. n.a. 123,611 105,917 1977 701,078 726,187 1,559,922 n.a. n.a. 104,981 160,726 1978 574,002 941,827 2,073,563 n.a. n.a. 132,085 103,785 1979 356,098 1,559,922 2,346,749 n.a. n.a. 203,886 224,255 1980 197,659 2,073,563 2,809,206 n.a. n.a. 218,937 259,593 1981 138,779 2,346,749 3,073,784 n.a. n.a. 242,145 266,307 1982 67,716 2,809,206 3,124,110 n.a. n.a. 334,164 387,512 1983 90,673 3,073,784 3,420,974 79,094 289,633 368,727 464,255 1984 59,341 3,124,110 4,441,321 352,502 38,971 391,473 476,059 1985 13,051 3,420,974 4,047,674 409,395 27,720 437,115 683,683 1986 117,485 4,441,321 4,320,547 483,165 51,901 535,066 792,393 1987 170,670 4,047,674 5,172,872 384,008 115,300 499,308 705,326 1988 21,463 4,320,547 5,633,502 320,358 215,307 535,665 735,363 1989 19,239 5,172,872 5,483,344 350,447 310,146 660,623 960,256 1990 93,949 5,633,502 5,493,408 297,152 392,575 689,727 868,591 1991 89,879 5,483,344 6,058,498 256,477 414,816 671,293 819,288 1992 71,624 5,493,408 5,565,032 99,515 356,484 460,735 842,676 1993 58,674 6,058,498 6,117,171 88,502 463,082 391,258 931,317 1994 55,114 6,695,124 6,750,238 50,515 410,219 465,442 960,906 1995 17,274 6,495,682 6,512,956 36,544 354,713 396,785 910,036 1996 68,999 7,142,910 7,211,909 71,067 394,375 462,459 994,215 1997 31,303 7,458,667 7,489,969 17,808 378,977 549,893 1,087,732 1998 41,418 7,423,507 7,464,925 66,410 396,049 520,280 1,217,001 1999 262,123 8,650,272 8,912,395 84,170 465,722 549,893 1,245,493 2000 398,352 8,683,201 9,081,553 20,072 500,208 520,280 1,349,945 2001 1,275,732 9,349,098 10,624,830 74,226 788,962 668,606 1,807,429 2002 1,165,881 9,720,378 10,886,259 59,623 638,822 698,445 1,543,311 2003 1,239,578 11,026,486 12,266,064 79,696 786,962 868,658 1,809,957 2004 1,324,478 11,250,923 12,575,401 88,920 689,938 778,857 1,795,918 Source: Department of Statistics, Malaysia: 1975-1989 MPOB: 1990-2004 Rulianda Purnomo Wibowo : Palm Oil Contribution To Malaysian Economy, 2008 USU Repository © 2008 Table 6 Malaysian Palm oil Export Value, Share of Agricultural Export and CPO Prices,1997-2004 Year Export Value Million RM Share of Agricultural Export CPO Prices RM per tonne 1997 12,758 35.7 1,358 1998 22,648 48.54 2,377 1999 14,475 52.3 1,449 2000 9,948 43.2 996 2001 9,876 49.46 894 2002 14,838 56.36 1,363 2003 20,224 59.96 1,544 2004 20,107 55.58 1,610 Source: Export value and share of agricultural export 1997-1998: Ministry of Primary Commodities Export value and share of agricultural export 1999-2004: Bank Negara Malaysia 2004 CPO Prices 1997-2004: MPOB 2006

3. Poverty Alleviation Program