Overcapacity in the downstream sector

A worker loads oil palm fruit into a lorry at a local palm plantation in Shah Alam outside Kuala Lumpur. - REUTERS

He said on Tuesday refineries in Malaysia and Indonesia would need to consolidate and reckoned that oil palm refineries should be set up in the importing countries instead.

Industry expert M R Chandran said that the oil palm production in Malaysia and Indonesia is expected to increase by 11% this year to 65 million tonnes compared to 58 million tonnes last year, boosted by good weather conditions.