MPOB: CPO price to rise to RM4,500 a tonne next year, smart palm mills to be completed in 2024

THE construction of a smart palm oil mill initiative by the Malaysian Palm Oil Board (MPOB) in collaboration with Fusionex Group is expected to be completed by the end of 2024, and it will start operating early in 2025.

MPOB DG Datuk Dr Ahmad Parveez Ghulam Kadir said the construction of the 10ha factory in Keratong, Pahang, is expected to take about 18 months, and currently, the MPOB is trying to get approval from the local council.

“The collaboration in the construction of a smart palm oil mill with a capacity of 30 tonnes per hour at the MPOB research station encompasses artificial intelligence and IR4.0 technology in the production of crude palm oil (CPO).

“The concept of this factory can produce a skilled workforce that is efficient in the use of automation systems in palm oil mills, produce CPO effectively and productively, and develop environmentally friendly palm waste management technology,” he said at a press conference at the National Seminar on Palm Oil Milling, Refining, Environment and Quality 2022 on Tuesday (Dec 20).

He said manual labour in the factory, for example taking samples for testing, can also be reduced by up to 30% with the concept of a smart palm oil factory.

Ahmad Parveez said the concept of this factory is modular, and when it is ready, it can be used by factories of other companies that want to improve their efficiency, without having to modify their entire factory.

“In terms of production, we expect that the oil extraction rate can be increased up to 22%-23%, above the current average rate of 19-20%,” he added.

Meanwhile, in response to questions about the issue of labour shortages in oil palm plantations, Ahmad Parveez said he was informed that there was an influx of labourers, but the number was still insufficient.

He said the total workforce reduction was 200,000, and the entry as reported by the Malaysian Palm Oil Association was only tens of thousands.

“I’m not saying we can resolve the whole thing, but I hope at least by next year, we can solve the labour shortage problem. 

“We will always be in touch with other resource countries, such as India, Bangladesh and Nepal, and reduce our dependence on previous countries, such as Indonesia,” he said.

On CPO price prospects, Ahmad Parveez said it is expected to stabilise at RM4,000 per tonne.

“Right now, we see the price is still around RM4,000 per tonne, and this is due to external factors, such as the uncertainty of the war between Ukraine and Russia, and the latest mandate in Indonesia in terms of increasing biodiesel content.

“However, the price could reach up to RM4,500 per tonne if there is another crisis that is likely to further increase the price of CPO, because more than 50% of the production of edible oil in the world is controlled by palm, and whatever happens, this will have a lot of impact on the price of palm,” he added. — Bernama