I visited Kuala Lumpur, Malaysia’s capital, at the invitation of the Malaysian Palm Oil Council (MPOC), the agency responsible for promoting the country’s palm oil industry.
The highlight was the two-day Malaysian Palm Oil Forum, attended by hundreds of delegates from more than 20 countries. But beyond the presentations by government officials, scientists and industry experts, the visit offered an opportunity to see how Malaysia produces, processes and adds value to palm oil.
For a Nigerian, the experience was striking. Nigeria was once regarded as the world’s leading producer of palm oil before crude oil discovery and subsequent neglect pushed the industry into decline.
During four days of visits to plantations, mills and refineries, I saw how Malaysia has transformed palm oil production through mechanisation, processing, research and sustainability practices.
The message was simple: palm oil is more than cooking oil, and the guiding principle is ‘zero waste’.
In Malaysia, what is commonly known in Nigeria as red palm oil is called crude palm oil, which can be processed further into different products. These include refined cooking oil, margarine, soap, cosmetics, detergents, processed foods and industrial materials.
Palm kernels are also processed into oil for food, personal-care and industrial products. Meanwhile, empty fruit bunches and other suitable residues can be used for fertiliser, animal feed, biomass energy and other applications.
‘Our responsibility is not only to produce more, we must produce better and create more value for every product,’ Malaysia’s Minister of Plantation and Commodities, Dr Noraini binti Ahmad, said at the forum.
Malaysia produced 12.6 million tonnes of crude palm oil in the first eight months of 2026, while palm oil exports exceeded 10.4 million tonnes, up 8.2% compared with the same period in 2025.
Its palm oil industry remains strongly export-oriented, with more than 80% of production destined for international markets. In 2025, exports of Malaysian palm oil and palm-based products generated approximately USD28.1 billion in earnings.
The industry contributed close to 3% of Malaysia’s Gross Domestic Product and supported the livelihoods of more than one million Malaysians across the value chain.
Behind these figures are plantations, mills and refineries, as well as millions of people whose livelihoods depend on the industry.
Smallholders and sustainable farming
Malaysia’s experience shows that sustainability involves more than planting trees. It requires improving yields on existing farmland, managing waste, protecting forests and helping smallholder farmers meet market requirements.
The country’s position as the world’s second-largest palm oil producer rests not only on large plantations owned by major companies but also on small farms managed by independent farmers.
Official figures put the number of smallholder palm oil farmers at about 450,000. They manage roughly 27 per cent of Malaysia’s oil palm planted area, covering close to 1.5 million hectares.
Support programmes run by non-governmental organisations and other stakeholders help farmers improve farm records, use fertilisers more efficiently and diversify their income.
‘As the industry grows, our smallholder farmers must grow along with it,’ the minister said.
We visited Judah village on Carey Island, about 72km southwest of Kuala Lumpur, to see how smallholder farmers were adopting sustainable farming practices.
At the farm of Bidin Loya, a farmer supported by Wild Asia, a non-profit organisation promoting sustainable practices among independent farmers, we saw methods aimed at improving soil health and reducing waste.
One is the ‘cut and drop’ method. It involves cutting palm fronds into smaller pieces and spreading them around the base of the trees, where they decompose and return organic matter to the soil.
Another practice involves producing bio-enzymes from organic waste.
The raw materials include unsold fruits and vegetables or produce unfit for consumption, mixed with molasses and non-chlorinated water.
Wild Asia says about 50kg of fruits and vegetables can produce 200 litres of bio-enzyme. The mixture ferments for about three months before it is diluted and applied to the plantation. A similar process is used to prepare products from fish waste.
The approach turns organic waste into a useful resource and is intended to reduce farmers’ dependence on chemical inputs.
Anthony David, Wild Asia’s regional technical coordinator, explained that the products were not conventional fertilisers but inputs designed to support soil health.
He said the microorganisms in them help break down organic matter and improve the availability of nutrients to plant roots.
To demonstrate the difference in soil conditions, Afiq Muhammad, a Wild Asia field officer, scratched the soil with his fingers. Within seconds, an earthworm appeared, followed by another.
The soil was dark, moist and relatively loose. A nearby plot managed using conventional practices appeared more compact and was harder to dig.
Afiq said earthworms indicate biological activity in the soil. Their tunnels improve the movement of air and water, while their castings help enrich the soil with nutrients.
The approach seeks to retain vegetation on the ground and minimise practices that disrupt soil life.
However, it does not require farmers to abandon all chemical products. Afiq said pesticides could still be used selectively when necessary.
For Bidin, the method also offers financial benefits. He said his experiments with bio-enzymes had reduced his fertiliser expenses by about 3,600 Malaysian ringgit (about N1.2 million) annually.
Shrinking arable land, growing population
The need to produce more food on existing farmland is becoming increasingly urgent as the global population grows and arable land per person declines.
Speaking at the palm oil forum, MPOC Chairman Carl Bek-Nielsen said the world must improve agricultural productivity to meet rising food demand without increasing pressure on forests.
He said that between 1990 and 2050, arable land per capital was projected to decline by 41 per cent, while the global population would increase by 85 per cent. Land under agriculture, however, was expected to grow by only eight per cent.
‘The arable land per capital is on the way down. So that means we have to produce more food on the existing land in order to increase food production for a growing population,’ he said.
Bek-Nielsen said sustainable farming was necessary to minimise deforestation while meeting demand.
‘We’ve got to produce more with less. We have to increase our yields,’ he said.
He also said Malaysia remained committed to reducing deforestation.
According to him, the country’s oil palm planted area had declined over the previous five years by an area equivalent to four times Singapore’s land area.
Lessons for Nigeria
Malaysia’s experience offers lessons for Nigeria, where smallholder farmers also play a major role in palm oil production.
Data attributed to the Council of Palm Oil Producing Countries (CPOPC) put Nigeria’s annual palm oil consumption at about 2.61 million tonnes, against domestic production of 1.57 million tonnes.
The figures suggest a shortfall of approximately 1.04 million tonnes, highlighting the gap between local supply and demand.
Increasing production is important, but Nigeria also needs to improve processing and extract more value from every part of the oil palm.
For instance, processors could sell crude palm oil to refineries, palm kernel oil to soap manufacturers, palm kernel cake to animal-feed producers, and suitable fruit fibres and shells to biomass-energy users.
Such an approach would create additional income streams, reduce waste and expand opportunities for farmers, processors and manufacturers.
Nigeria has major players in the palm oil industry, but the challenge is to build a system that enables smallholder farmers to benefit from improved production methods, processing facilities and access to markets.
Malaysia’s experience demonstrates that a successful palm oil industry requires more than large plantations. It needs investment in technology, research, sustainable farming, processing and market development.
For Nigeria, the opportunity lies in moving beyond the production and sale of raw palm oil to building an industry that creates more jobs, supports farmers and produces a wider range of goods.
Producing more palm oil matters, but extracting greater value from every harvest could be just as important.