Lang
Malaysia’s palm oil industry has called for more targeted incentives and policy support under Budget 2026 to strengthen export competitiveness, raise productivity and yields, and enhance sustainability, according to the Malaysian Palm Oil Board (MPOB).
MPOB Director-General Datuk Dr. Ahmad Parveez Ghulam Kadir said the government should intensify trade promotion and branding initiatives to position Malaysian palm oil as a sustainable and climate-smart commodity.
He said strong branding reinforces Malaysia’s commitment to sustainability standards such as Malaysian Sustainable Palm Oil (MSPO) certification and the national traceability system, improving transparency and accountability.
He added that this credibility helps counter negative campaigns in key export markets and reassures buyers that Malaysian palm oil meets the demands of climate-conscious consumers.
The industry is also seeking financial incentives for downstream products, including oleochemicals, specialty fats, bioenergy, and sustainable aviation fuel. Ahmad Parveez described these as key levers to future-proof the sector against regulatory pressure, changing consumer preferences, and global sustainability requirements.
He also called for strategic support to improve logistics efficiency, including incentives for greener and lower-cost export solutions that address immediate cost pressures and long-term market positioning.
Improving Productivity and Yields
Ahmad Parveez said a 100% reinvestment allowance for oil palm replanting should be encouraged to accelerate replanting by private and government agencies.
He said the initiative is expected to raise the oil palm replanting rate from 2.5%, or 101,809 hectares, to 5.1%, or 210,000 hectares, annually.
He expressed hope that the government would approve RM280 million in funding for oil palm replanting programs targeted at independent smallholders.
He said the government remains committed to helping independent smallholders renew ageing plantations and accelerate replanting under the 13th Malaysia Plan, including through better delivery mechanisms, easier access to financial assistance, and stronger engagement with smallholder communities.
He also said the launch of a RM100 million soft loan program for small and medium-sized oil palm farms is timely, as it supports the renewal of ageing and unproductive trees that currently contribute to lower productivity and weaker competitiveness.
Strengthening a Sustainable Future
Ahmad Parveez proposed a 3% export duty on refined, bleached, and deodorized palm stearin to limit excessive exports and ensure adequate supply for the domestic oleochemical sector.
He said maintaining sufficient domestic raw material supply would support production and competitiveness while indirectly strengthening the palm-based oleochemical industry.
He also proposed export duties of 10% to 20% on waste oils, including used cooking oil and palm oil mill effluent, to encourage domestic utilization and value addition by securing feedstock for biodiesel, renewable fuels, and oleochemicals.
In the long term, he said these measures would accelerate Malaysia’s transition toward a more circular and environmentally responsible palm oil industry while strengthening its global competitiveness.
Overcoming External Challenges
Ahmad Parveez said Budget 2026 can play a key role in helping the palm oil sector overcome external challenges while strengthening growth, productivity, and resilience.
He said replanting programs for smallholders and small and medium-sized plantations should be expanded, with an emphasis on high-yielding and disease-resistant planting materials.
He added that sustainability compliance should also be strengthened through wider adoption of MSPO certification and robust traceability systems.
He concluded that incentives for mechanization, digitalization, and precision agriculture would further help reduce dependence on manual labor and improve operational efficiency.