Oil Palm Industry Economic Journal Vol. 12 (2) September 2012 p. 36-43

An Analysis of Crude Palm Oil Production in Malaysia

Ramli Abdullah
Received:    Accepted:    Available Online:


Palm oil is a very important commodity in Malaysia, and as such, it has become one of the 12 economic sectors under the National Key Economic Areas (NKEA) to realise the country’s vision towards attaining a high income nation status in 2020. However, land is a limited resource for future oil palm expansion, thus, land productivity is pivotal in achieving the target of the NKEA. This can also affect future production of palm oil. Thus, it is the objective of this article to understand its behaviour in the past in order to determine its trend in the future. Based on historical data, palm oil production behaviour can be characterised by four components, namely trend, cyclical, seasonal and irregular components. The cyclical component is less obvious due to the nature of the data which is on monthly basis. However, this monthly data is suitable for exhibiting the seasonal and trend components. The seasonal component produces significant monthly indices which show performance of monthly production in a year. The trend component shows that production of palm oil is generally on the uptrend. The last irregular component indicates the production behaviour which is not described by the other three components and is considered a totally random error. Having understood the production pattern which consists of the four components, various key factors (mostly biological in nature) which affect and determine the movement of the palm oil production were also discussed in this article. These factors include rainfall (which affects more on the fresh fruit bunches yield), matured areas and fertiliser application. Coupled with the four components, they give a clearer picture of the production pattern of crude palm oil production in Malaysia.

About Post Author


Malaysian Palm Oil Board,
P. O. Box 10620,
50720 Kuala Lumpur, Malaysia.
Email: ramlia@mpob.gov.my