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 Agriculture News
Updated 7 minutes ago Russia's second-largest oil company, privately controlled Lukoil, said on Friday it planned to invest in Nigeria with US oil major Chevron Corp, part of its push to seek opportunities away from Russia's state-dominated oil sector. "We have decided to enter a joint...
Updated 14 minutes ago Eskom started with scheduled blackouts on Friday afternoon, the power utility said. "Load shedding will continue until 8pm tonight," it said in a short power update.
Updated 3 hours ago Construction company Group Five says its strategy is strongly focused on expansion in Africa, with selected projects in Russia and Northern America also possibly on the horizon. Outgoing CEO Mike Upton says the South African construction industry saw what appears to...
Recent Research Reports
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.
Real Economy Insight: Construction 2014 (PDF Report)
This five-page brief covers key developments in the construction industry over the past 12 months. It provides an overview of the sector and includes details of employment in the sector, infrastructure and municipal spending, as well as insight into companies’...
Real Economy Insight: Electricity 2014 (PDF Report)
This five-page brief covers key developments in the electricity industry over the past 12 months, including details of State-owned power utility Eskom’s generation activities, funding and tariffs, independent power producers and prospects for the sector.
This Week's Magazine
JSE-listed real estate investment trust (REIT) Rebosis Property Fund achieved a distribution growth of 8.1% to 99.45c per linked unit in the financial year ended August 31, despite volatile market conditions.
A low-cost, inflatable incubator won this year’s international James Dyson design award, which aims to encourage and inspire the next generation of design engineers.
The World Bank released its ‘Doing Business 2015: Going Beyond Efficiency’ report last month and ranked South Africa 43 out of 189 global economies for its ease of doing business, with Singapore topping the rankings.
Air Products South Africa officially launched its R300-million Eastern Cape air- separation unit (ASU), at its new manufacturing facility in the Coega Industrial Development Zone (IDZ), earlier this month. It is the second facility that Air Products launched in South...
BMW South Africa (SA) has signed a power purchasing agreement with energy company Bio2Watt. The offtake partnership will bring renewable energy to the carmaker’s Rosslyn plant, north of Pretoria.