Malaysia is one of the world's two largest producers and exporters of palm oil, alongside Indonesia, with production concentrated in Peninsular Malaysia, Sabah and Sarawak. The sector is a major source of export earnings and rural employment, regulated by the Malaysian Palm Oil Board, and increasingly shaped by sustainability certification schemes such as MSPO and RSPO.
- Malaysia is consistently one of the world's top two palm oil producers, alongside Indonesia
- Sabah and Sarawak account for a substantial share of national planted area
- The Malaysian Palm Oil Board (MPOB) regulates and promotes the industry
- MSPO certification is mandatory for Malaysian palm oil producers
- Exports go mainly to markets including India, China and the European Union, among others
- Precise annual tonnage and price figures fluctuate; consult MPOB for current data
Who this applies to: Anyone seeking an orientation-level understanding of Malaysia's palm oil industry and its economic role.
On this page
At a glance
| Metric | Value | Period | Source |
|---|---|---|---|
| Global producer ranking | Among the world’s top two, alongside Indonesia | Ongoing | MPOB / MPOC |
| Crude palm oil production | On the order of high single-digit to low double-digit million tonnes annually | Recent full year | MPOB |
| Major growing states | Sabah, Sarawak, Johor, Pahang | Ongoing | MPOB |
| Certification | MSPO mandatory nationwide; RSPO voluntary/market-driven | Ongoing | MPOB / RSPO |
Precise annual production, planted area and export tonnage vary year to year and are subject to revision. Consult MPOB’s statistics releases for current official figures.
What the sector covers
Palm oil is one of Malaysia’s most significant commodity exports and a major source of rural income, particularly in Sabah, Sarawak and parts of Peninsular Malaysia. The industry spans upstream cultivation and milling, refining into a wide range of edible and industrial products, and downstream manufacturing of goods such as cooking oil, oleochemicals and biodiesel.
Key institutions and functions
- Malaysian Palm Oil Board (MPOB). The main regulatory and research body, responsible for statistics, R&D, licensing of mills and estates, and industry development.
- Malaysian Palm Oil Council (MPOC). Promotes Malaysian palm oil in export markets and manages trade-related communications.
- MSPO certification. The Malaysian Sustainable Palm Oil scheme is mandatory for oil palm growers, mills and related premises in Malaysia, covering environmental, social and governance standards.
- RSPO certification. The Roundtable on Sustainable Palm Oil is a voluntary, market-driven certification scheme that many Malaysian producers also pursue for specific export markets.
Who it affects
The sector affects smallholders and estate workers, mill and refinery operators, exporters, and the state economies of major growing regions, alongside downstream manufacturers of food, cosmetics and biofuel products that rely on palm oil as a feedstock.