Impact Comparison of El Niño and Ageing Crops on Malaysian Oil Palm Yield

Abstract

Ageing oil palm crops show a significant correlation with the declining oil palm yield in Malaysia. Not only do aged crops result in lower production, but they are also more costly and difficult to harvest. The Malaysian oil palm yield recovered to the pre-El Niño level after the 1997/98 El Niño event. However, the oil palm yield failed to recover after the recent 2015/16 El Niño. Due to the accumulation of aged oil palm plantations in Malaysia, the financial losses from different magnitudes of El Niño events are increasing. Thirty-four years of monthly oil palm yield trends in Malaysia were compared with the El Niño–free yield dataset to show that the oil palm yield downtrend pattern is the same with or without El Niño events in Malaysia for the most recent 15 years (2005 to 2019). The performance of oil palm yield did not show any significant difference from 2000 to 2019. This study estimates that ageing oil palms would lead to a minimum opportunity loss of USD 431 million by December 2022. Without a proper replanting program, the total combined loss attributable to the ageing crops from 2009 to 2022 is estimated to be USD 3.94 billion, which is more profound than losses due to El Niño events within the same period. This study also concluded that a continuous 7-year replanting scheme of at least 115,000 hectares per year is needed to address the adverse impact of ageing crops on the Malaysian oil palm yield, which accounts for nearly 30% of the global palm oil production.