Sabah continues to be a significant regional palm oil producer, providing livelihood and shared prosperity for all Sabahans, said the Malaysian Palm Oil Association (MPOA).
Its chief executive officer Joseph Tek said last year, Sabah produced 23.3 per cent of Malaysia's crude palm oil (CPO), generating 4.29 million tons from its landbank of 1.51 million hectares of planted oil palm area.
"However, there was a decline in crop yield, oil and kernel extraction rates (OER and KER), by 2.4 per cent, 1.5 per cent, and 0.9 per cent respectively, year-on-year.
"Despite these challenges, MPOA expressed gratitude to the Sabah government for its continued support and cooperation with the oil palm industry," he said at the MPOA Sabah branch's annual general meeting (AGM) here today.
Tek said the global palm oil industry is expected to face tighter CPO availability this year due to several factors, including only a potential marginal increase in CPO output from top producing countries Malaysia and Indonesia by less than three per cent, respectively.
"Heavy rainfall and floods in parts of Malaysia are expected to impact CPO production due to short-term disruptions to estate harvesting operation, logistics, and poorer fruit-set.
"The last three years of La Nina have caused significant damage to oil palm root systems, leading to smaller fruit bunches, lesser oil content, and uneven fruit sets."
Tek added that the rising number of over-aged and very tall oil palm trees in Malaysia is also expected to continue to constrain supply as replanting has been slow due to high costs.
"On a positive note, authorities have facilitated the return of more foreign workers, easing labor woes among many planters. Normalcy is expected among many planters by the middle of this year."