By Ahmad Ibrahim

Palm oil is a critical pillar of Malaysia’s economy. With an annual revenue exceeding RM100 billion, palm oil accounts for almost 4% of the country’s GDP, a big chunk of the agriculture GDP. Many look at palm oil as one of the most inclusive economic crop, touching the lives of most Malaysians. Its greatest economic impact is on the livelihood of smallholder farmers in the rural areas. The latest count suggests there may be more than 300,000 oil palm smallholders in Malaysia. As the price of palm oil hovers close to RM4000 a ton, one can appreciate how the crop has lifted many rural farmers out of poverty.

But the rise of palm oil as the leading edible oil in the world is not without its share of trials and tribulations. For years, competing oils have been tormenting palm oil with all kinds of unbridled accusations. Many in the palm oil industry still remember the episodes in the 90s when it was mercilessly attacked left and right. It was depicted as bad for health. But as scientific evidence gathered more understanding of the oils and fats nutrition, the picture was reversed. The trans fats from the hardening of the other oils proved to be the real culprit of the negative health effects. Soon nutritional studies confirm palm oil, with its high level of the monounsaturates, is just as good as the gold standard of fats nutrition, olive oil. Tan Sri Augustine Ong who was instrumental in coordinating much of the studies explains that it is the chemical positioning of the saturates in palm oil that accounts for the positive nutritional character.

Many in the industry then were passionate about palm oil. Augustine was one who, even to this day, remains active uncovering more positive evidence on palm oil. He is a firm believer that with the right research strategy palm oil yield can go much higher approaching its theoretical yield of around 17-19 tons of oil per hectare per year. The national average has been stagnating at about 4 tons. More R&D in breeding is needed. The other name which stood out among the palm oil research leaders was Tan Sri Yusof Basiron. Many remember him as the DG of MPOB who pushed hard for the implementation of the palm biodiesel Act. If there is a single factor which has led to the stabilisation of the palm oil price is the commercial use of palm oil as biodiesel. The rising demand for biofuel has enabled better palm oil stock management. This has effectively supported prices.

Many must still remember some of the industry leaders who passionately championed palm oil interest internationally. One which comes to mind is Tan Sri B Bek Nielson of the United Plantations. No one dares say negative things about palm oil in his presence. He would respond with weapons on palm oil facts blazing. The other is Mr Toh Pang Huat, a one time president of PORAM. He lived and breathed palm oil till the end. There were others as well who passionately defended the interests of palm oil. But the plantation minister Tun Dr Lim Keng Yaik stood out as a formidable champion of the oil. In one of his public engagement, he threatened to drop his so called hydrogen bomb if competing oils dared question the positive attributes of palm oil. He was of course referring to the trans fats revelation arising from the hydrogenation of the soft oils which has badly tarnished the image of competing oils.

Now the main issue confronting palm oil is the environment. Palm oil is blamed on all fronts. Palm oil destroys the forest they say. The carbon emission from the palm oil industry is higher than the other oils they claim. But the evidence says otherwise. At a recent conference presentation by Professor Dennis Murphy of the UK, the oil palm has an unbeatable carbon sequestration power. And the claim of uncontrolled deforestation is grossly unfounded. The current Minister Dato Seri Johari has come out to say that in Malaysia any plantation which practices deforestation will be denied the license to process their fresh fruits bunch, FFB. Dato Seri Johari has also established himself as no push over as well. Since assuming office, he has come out with strong statements which many in the industry find comforting. He is seen as taking aggressive initiatives to sustain the strong performance of the industry, working closely with indusry captains.

Many in the industry are pleased with recent developments in defending the position of palm oil. The new evidence that has come out of research has reignited the passion that has been dormant for a while now. The industry, as always, remains committed to sustainability. The impressive progress in sustainable practices, such as the Malaysian Sustainable Palm Oil (MSPO) certification, provide testimony to that. Even at the recent COP29 in Baku, the industry successfully showcased the commitments to zero deforestation and conservation of biodiversity.

It is no longer a secret that the industry is investing in precision agriculture, blockchain for traceability, and AI for yield optimization to enhance transparency and traceability. Under the watch of the ministry, the industry is actively engaged in international dialogues to address misconceptions and promote balanced narratives. This was evident at the recent dialogue with the EU on the controversial EUDR ruling. All stakeholders at the engagement, including some EU member states, agreed that many issues must be properly resolved before the ruling can be enforced. Many are heartened that the passion for palm oil which has long been dormant is seen returning back with greater vengeance. This augurs well for the future of palm oil.

_{The author is an Associate Fellow at the Ungku Aziz Centre for Development Studies (UAC), Universiti Malaya, and may be reached at uacds@um.edu.my}