Malaysia’s Palm Oil Industry Urged to Boost Yields to Secure Sustainable Future

KUALA LUMPUR, Dec 31, 2025 – Malaysia’s palm oil industry must prioritise improving crop yields to remain competitive and sustainable in an increasingly demanding global market, according to industry leaders.

The Malaysian Palm Oil Council (MPOC) highlighted that crude palm oil (CPO) yields in the country have stagnated in recent years, largely due to ageing oil palm trees, delayed replanting programmes and labour constraints, particularly among smallholders. These challenges have raised concerns over the industry’s long-term productivity without expanding land use.

MPOC chairman Datuk Carl Bek-Nielsen noted that while earlier ambitions targeted yields of six to seven tonnes per hectare, such figures are no longer realistic under current conditions. Instead, a more achievable goal of approximately 4.5 tonnes per hectare by 2035 has been proposed. Achieving this target would allow Malaysia to increase output while aligning with sustainability commitments and avoiding further deforestation.

Improving yields is also seen as crucial as the industry adapts to stricter global regulations, including the European Union’s Deforestation Regulation (EUDR). While the implementation timeline remains uncertain, industry players stress that stronger productivity and traceability measures will help Malaysia maintain access to key export markets.

The report further points to rising production and logistics costs, as well as shifting global demand patterns. As traditional markets become more regulated, Malaysia is actively exploring opportunities in emerging regions such as Africa, where palm oil demand continues to grow.

Overall, industry stakeholders agree that smarter farming practices, timely replanting, and strategic market diversification are essential to ensuring the palm oil sector remains resilient, competitive and environmentally responsible in the years ahead.