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

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 Nino level after the 1997/98 El Nino event. However, the oil palm yield failed to recover after the recent 2015/16 El Nino. Due to the accumulation of aged oil palm plantations in Malaysia, the financial losses from different magnitudes of El Nino events are increasing. Thirty-four years of monthly oil palm yield trends in Malaysia were compared with the El Nino-free yield dataset to show that the oil palm yield downtrend pattern is the same with or without El Nino 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 Nino 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.

Automated summary

Ageing oil palm crops in Malaysia have a significant negative impact on the oil palm yield, leading to lower production and increased harvesting costs. Despite the recovery of the oil palm yield after the 1997/98 El Nino event, it failed to recover after the recent 2015/16 El Nino. This is due to the accumulation of aged oil palm plantations in Malaysia, resulting in increasing financial losses. The study shows that the oil palm yield downtrend pattern is consistent regardless of El Nino events for the most recent 15 years (2005 to 2019).