Call for removal of oil palm seed export ban

This ia written by my colleague Zaidi Isham Ismail.

Malaysia can be the the world's largest supplier of germinated oil palm seeds, provided that the government drops its existing gazette that bans the export of the commodity.

The government, since the 1970s, prohibits the export of oil palm seeds to ensure enough supply for local farmers as well as protect the seeds' intellectual property rights from being copied by other oil palm producers. Malaysia, however, does supply oil palm seeds to Malaysian companies overseas as well as to Honduras, Colombia, Sierra Leone, Thailand and Indonesia on a government-to-government basis.

Felda Agricultural Services Sdn Bhd executive director and chief executive officer S. Palaniappan said the situation has now changed where the country's oil palm sector produces more than enough oil palm seeds to cater for domestic use as well as the export market.

"Malaysia, in total, produce 80 million oil palm seeds, of which 50 million are supplied to local planters while the remaining 30 million can be sold to other customers.

"We have received a lot of enquiries from overseas customers and hope that the government will lift this gazette," Palaniappan told Business Times at Felda's headquarters in Kuala Lumpur recently.

He added that the oil palm seeds can be a significant income earner for the country as it can fetch a higher price in the overseas market, at almost RM3 per seed compared to almost RM2 per seed in Malaysia. He estimates that Africa and Indonesia alone have demand for 50 million and 130 million oil palm seeds a year respectively as everybody now wants to cash in on the crop.

Felda Agricultural Services is the technical and advisory arm of the Federal Land Development Authority (Felda), providing the plantation owner and land scheme manager oil palm-related advice, research and development findings, fertilisers, planting materials and seeds, products and consultancy services.

Felda's oil palm seed under the brand name Yangambi (an African word) is 100 per cent made at Felda and is the country's top-selling oil palm seed among many plantation companies.

Palaniappan said Felda Agricultural Services is going all out to maintain its grip as the country's top brand in oil palm planting materials and seed production. "Over a period of 40 years in the seed production business, Felda is proud that its oil palm seed is now the top selling and a well-known brand with a 27 per cent market share," he added.

Felda Agricultural Services produced 23 million oil palm seeds in 2010 and is expected to produce 27 million seeds in 2011. He said Malaysia produced about 86 million oil palm seeds in 2008, of which 23 million seeds were supplied by Felda Agricultural Services and the country's second largest oil palm seed producer Sime Darby Bhd.

The Yangambi brand continues to lead as the country's top- selling brand for oil palm seeds and was last month awarded the Brand Laureate SMEs chapter award for the best brand specialty award in brand innovation (Felda Yangambi).

"About 25 per cent of the oil palm planting materials are for Felda's internal use, while the remaining 75 per cent are sold to our 100 clients, including smallholders and main board companies," Palaniappan said.

They include the Rubber Industry Smallholders Development Authority, Federal Land Consolidation and Rehabilitation Authority (Felcra), Ta Ann Holdings, Rimbunan Hijau Group, Genting Plantations, Lembaga Tabung Haji's TH Plantations and others.

"Our oil palm seeds have potential to produce about eight tonnes of crude palm oil per hectare per year, double the national average. Our own estates at Felda Agricultural Services produced in 2008 an average yield of 26.6 tonnes of fresh fruit bunches per hectare per year compared with the national average of 20 tonnes per hectare per year," he added.

Palaniappan said Felda Agricultural Services is among the country's top two players in producing oil palm clones, targeting to produce one million by 2010 and later on go for full commercial production. It has one of the world's largest oil palm breeding programmes since 1968, carrying out its tests and trial activities at its 14 stations located across 12,500ha of its oil palm land nationwide.

Malaysia, which is the world's second largest palm oil producer after Indonesia, needs 60 million to 80 million oil palm seeds a year.

Felda Agricultural Services is 23.1 per cent owned by Koperasi Permodalan Felda Bhd, which in turn is held by settlers and Felda staff. The remaining 76.9 per cent is owned by Felda Holdings Bhd, which in turn is a wholly-owned subsidiary of Felda Global Ventures, the commercial arm of Felda.

Felda is possibly the world's largest plantation owner and manager owning over 800,000ha of rubber and oil palm estates, of which 730,880ha are oil palm land. There are about 112,000 settler families.

Out of the 800,000ha, some 500,000ha in 2008 have received Felda Agricultural Services agronomic recommendation and other consultancy services.  In 2009, Felda Agricultural Services made a pre-tax profit of RM116 million. It spends RM40 million a year on research and development activities.

2 Responses to Call for removal of oil palm seed export ban

  1. "We have received a lot of enquiries from overseas customers and hope that the government will lift this gazette,"

    " oil palm seeds can be a significant income earner for the country as it can fetch a higher price in the overseas market, at almost RM3 per seed compared to almost RM2 per seed in Malaysia."

    now concerns with lively hood of people overseas or stick to original eradicating poverty program by the govt. and to protect the competitive advantage Malaysian has over other planters because the price selling here is only RM 2 compared to RM 3 overseas.

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