Jan 20, 2012
Small farmers in big industry earn consistent incomeBack
DURBAN|Expertise|Africa|Components|Ports|Africa|Malaysia|Morocco|Nigeria|South Africa|Food Oils|Large-scale Corporate Industry Manufacturing Oils|Manufacturing|Natural Oil|Oil|Palm Oil|Palm Oil Production|Palm Oil Products|Products|Bernard Dompok|Infrastructure|BIOFUELS
© Reuse this
About 40% of the country’s 18.2-million tons of palm oil production comes from small- holders, who consistently earn between R600/acre and R1 000/acre of mature palms each month.
“It is a good crop to elevate people out of rural poverty and lots of Malaysians who have land or have developed their properties are much better off than before. If a farmer has 5 ha of mature palm oil, he can get R6 000 to R10 000 a month.
“It [resolves] some of the problems in the rural areas, where people have land but no other income,” he stated at the Malaysian Palm Oil Trade Fair and Seminar, in Sandton, in December.
The certainty of the farmer’s income is linked to the large-scale demand created by the greater industry, the scale of which also helps to reduce supply risks and, thus, price volatility. The country’s production from January to September was around 18.2-million tons of palm oil and related products, earning it around R123.5-billion, or 9.8% of its total exports each year, with 150 000 t of palm oil being exported to South Africa in 2010.
The oil is used in the manufacture of food oils, soaps, biofuels, phytonutrients and cosmetics, with proponents noting that the oils are derived from natural sources, not petroleum, making them renewable.
For the cosmetics industry, demand for palm oil products is expected to increase as people seek out products made from the high-quality natural oil. Further, the oil also contains tocotrienols, a type of vitamin E, and there is growing interest in the oleochemicals owing to the oil’s price and fatty acid composition. Malaysia has produced 2.15-million tons of oleochemicals from palm oil for the year up to September 2011, he said.
The Minister noted that, prior to attending the seventeenth Congress of the Parties conference in Durban, he had visited a business in Pietermaritzburg that manufactured soaps using imported Malaysian palm oil.
However, Malaysia practises a market economy and Dompok noted that, although there was no explicit limit on land ownership, the country had achieved 40% of palm oil production from smallholders.
“[Palm oil] planting companies can become very big. There is trading of land, buying and selling, but most of the time people develop the land and do not sell it, preferring to target incomes coming out of good oil,” he explained.
Further, Dompok noted that a number of Malaysian companies and plant companies were establishing joint ventures with South African firms and that the government, in partnership with industry body the Malaysian Palm Oil Council, were encouraging more.
“We are also happy to see some companies owned by South Africans who want to venture into this industry, and we can work out what encouragement and assistance we can give to them,” he noted.
The Palm Oil Trade Fair and Seminar was aimed at attracting new entrepreneurs to invigorate trade in the commodity and Malaysia aims to play a significant role in developing downstream activities in importing countries, such as South Africa, Morocco and Nigeria, besides others.
The industry employs in excess of 570 000 people in Malaysia.
“All these developments would not have materialised without the government taking a proactive approach to complement the private sector initiatives by improving the national infrastructure and supporting facilities such as ports, bulking installations and transportation,” said Dompok.
Malaysia offers the right policies to help the growth of the palm oil downstream sector. In the upstream sector of the industry, such as the palm oil plantations, Malaysia is ready to help relevant multinational parties and contributes to technology, labour, expertise, raw materials and other inputs for the industry, he said.
Significant research is being done in the industry, including mapping the genome of the plant species that will help to improve production yield, concluded Dompok.
Edited by: Martin Zhuwakinyu© Reuse this Comment Guidelines (150 word limit)
Other Energy News
Recent Research Reports
Liquid Fuels 2014 - A review of South Africa's Liquid Fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2014 Report examines these issues, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing, competition in the sector, the...
Water 2014: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2014 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
Defence 2014: A review of South Africa's defence industry (PDF Report)
Creamer Media’s Defence 2014 report examines South Africa’s defence industry, with particular focus on the key participants in the sector, the innovations that have come out of the sector, local and export demand, South Africa’s controversial multibillion-rand...
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move road...
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
This Week's Magazine
South Africa remains an important manufacturing and export platform for Ford Motor Company, says executive chairperson Bill Ford. However, he adds that other countries on the continent are “becoming interesting”, and that the US carmaker is casting its net wider for...
Germany’s Max-Planck-Society (MPG) and the Max-Planck-Institute for Radio Astronomy (MPlfR) are investing €11-million (about R150-million) into South Africa’s MeerKAT radio telescope array programme. The money will be used to design, build and install S-band radio...
Infrastructure spend in sub-Saharan Africa will grow from $70-billion in 2013 to $180-billion by 2025, says PwC capital projects and infrastructure Africa leader Jonathan Cawood. This is one of the findings of PwC’s Capital Projects & Infrastructure report on East...
Private-owned defence and aerospace manufacturer Paramount Group and the Ichikowitz Family Foundation unveiled its Anti-Poaching Skills and K9 Training Academy in Magaliesburg last month.
The inclusion of Bluetooth to provide sub-three meter accuracy and heightened functionality for users is one of the ways to change existing wireless networks into engagement networks. An engagement network differs from common wireless networks in that it enables the...