Jan 20, 2012
Small farmers in big industry earn consistent incomeBack
DURBAN|Malaysia|Morocco|Nigeria|South Africa|Food Oils|Large-scale Corporate Industry Manufacturing Oils|Natural Oil|Oil|Palm Oil|Palm Oil Production|Palm Oil Products|Bernard Dompok|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
Other Energy News
Recent Research Reports
Automotive 2014: A review of South Africa's automotive sector (PDF Report)
The report provides insight into the business environment, the key participants in the sector, local construction demand, geographic diversification, competition within the sector, corporate activity, skills, safety, environmental considerations and the challenges...
Construction 2014: A review of South Africa's construction sector (PDF Report)
Construction data released during 2013 hints at a halt to the decline in the industry during the last few years, with some commentators averring that the industry could be poised for recovery. However, others have urged caution, noting that the prospects for a...
Electricity 2014: A Review of South Africa's Electricity Sector (PDF Report)
This report provides an overview of the state of electricity generation and transmission in South Africa and examines electricity planning, investment in generation capacity, electricity tariffs, the role of independent power producers and demand-focused initiatives,...
Defence 2013: A review of South Africa's defence industry (PDF Report)
Creamer Media’s 2013 Defence Report examines South Africa’s defence industry, with particular focus on the key players in the sector, the innovations that have come out of the defence sector, local and export demand, South Africa’s controversial...
Road and Rail 2013: A review of South Africa's road and rail infrastructure (PDF Report)
Creamer Media’s Road and Rail 2013 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...
Liquid Fuels 2013 (PDF Report)
Creamer Media’s 2013 Liquid Fuels report examines South Africa’s liquid fuels market, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing,...
This Week's Magazine
A structured approach, wherein managers personally engage at each level of the project, is necessary to mitigate delays to the workflow on mega construction projects, says State-owned Eskom Kusile power station projects GM Abram Masango. The 4 800 MW Kusile power...
Construction of transmission lines to evacuate power from a regional hydroelectric project in East Africa, which was hanging on the balance following the withdrawal of financing by key partners, is now back on track. After six months of uncertainty, the African...
Three Memorandums of Understanding (MoUs) were signed between South African and Malaysian companies at the Malaysian High Commission in Pretoria on Friday. These MoUs are part of the indirect offsets programme South Africa is providing in return for Malaysia’s...
The South African new vehicle market may well dip to 640 000 units in 2014, says Toyota South Africa Motors (TSAM) sales and marketing senior VP Calvyn Hamman. This is the first prediction that anticipates a drop in the market. To date economists and industry bodies...
Nissan will re-enter the South African minibus taxi industry in March, when the new NV350 Impendulo goes on sale. The 16-seater has been specifically tailored to meet the terms of government’s Taxi Recapitalisation Programme, which aims to replace South Africa’s...