Malaysia’s Palm Oil Industry Must Strike Balance Between Sustainability, Profitability
BANGKOK, Oct 13 (Bernama) -- Malaysia’s palm oil industry must balance sustainability with long-term profitability and growth, while ensuring that rising compliance costs do not disproportionately burden smallholders, said Malaysian Palm Oil Association (MPOA) chief executive officer Roslin Azmy Hassan.
Roslin said sustainability and profitability were mutually dependent, with sustainable practices needing to make economic sense for producers. “The most sustainable sector is the sector that we already have, if we can make it more productive,” he told a seminar entitled “Plantation 360: Mobilising Private Capital for More and Better Jobs” here on Tuesday.
Co-organised by the Council of Palm Oil Producing Countries (CPOPC) and the Office of the Executive Director for the South-East Asia Voting Group (EDSI 6) of the World Bank Group, the seminar was held on the sidelines of the 2026 International Monetary Fund and World Bank Group Annual Meetings.
Roslin said increasingly stringent requirements for certification, traceability, greenhouse gas emissions, biodiversity protection and supply chain due diligence were essential to maintaining market access and investor and consumer confidence. However, he cautioned that higher compliance costs could burden producers without necessarily improving productivity or generating economic value.
Roslin outlined five priorities for balancing sustainability and economic performance, starting with boosting productivity through replanting ageing oil palm trees; better planting materials; improved agronomic practices; mechanisation; and automation and digital technology, rather than expanding cultivated land.
He said Malaysia’s 450,000 smallholders, who account for nearly one-third of the country’s planted area, needed greater support to meet sustainability requirements, given their limited access to finance, technology and manpower.
"Governments, financial institutions, development banks and the private sector should provide innovative financing, including concessional loans and guarantees, to support replanting, technology adoption and sustainability improvements," he added.
Roslin also called for sustainability to be treated as an investment, with funding for renewable energy, methane capture, biomass utilisation, digitalisation and climate adaptation helping to cut emissions while improving efficiency and profitability.
He said the industry should generate greater value from every tonne of palm oil through downstream products, including oleochemicals, renewable energy, biogas and biofertilisers, while turning agricultural waste into additional revenue streams.
He added that stronger cooperation across the supply chain was needed to ensure sustainability standards delivered credible environmental and social outcomes while recognising the realities faced by producing countries.
“We should not be choosing between sustainability, profitability and growth. We need all three,” he reiterated.
Malaysia is the second largest palm oil producer after Indonesia, accounting for roughly 24-26 per cent of global crude palm oil (CPO) production with about 5.6-5.8 million hectares dedicated to oil palm cultivation.
-- BERNAMA
