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The Palm Oil Industry in the Philippines and Thailand: Challenges and
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Conference Paper · November 2019

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The Palm Oil Industry in the Philippines and Thailand:

Challenges and Opportunities
Agnes C. SEQUINO

University of San Jose Recoletos, Cebu City, Philippines

agnesequino@usjr.edu.ph

Ferdinand T. ABOCEJO

Eastern Visayas State University, Tacloban City, Philippines

ferdinand.abocejo@evsu.edu.ph

Abstract

This study assessed the palm oil industry in the Philippines and Thailand putting emphasis on their
challenges and opportunities. The study was implemented through interviews with the research key
informants from both countries. Secondary data relating to the palm oil industry were sourced from
existing company records and research conference materials. Interviews with key informants revealed
different sustainable practices worth emulating. Socio-cultural and demographic factors were the most
dominant external factors affecting the palm oil industry. Thailand has established itself as the largest
supplier of palm oil seedlings, achieved through years of research and development initiatives and
enhanced productivity in the agri-industry subsector. There is a promising future for the palm oil
industry in the Philippines especially if its full production potentials can be tapped to optimum
productivity. Opportunities abound for the Philippines with the present momentum of expanding
number of planters and palm oil growers paving way for high income generation, rural poverty
reduction supportive to countryside development initiatives. Thailand has already an established palm
oil industry and is committed to sustain its development over the long run. The country is very much
ahead as the third major player in the world, supplying the demand not only for crude palm oil and its
derivatives but also for seeds and hybrid seedlings. For the Philippines, government support is badly
needed to overcome the large vegetable oil import, low agricultural productivity, and high rate of
poverty.

Keywords: Palm oil industry, status, problems, challenges, opportunities, environ-mental scanning

Introduction

In recent years, the palm oil industry is among the fast growing industry. It has become a major
contributor to the economic development of some Southeast Asian countries like Malaysia, Indonesia,
and Thailand. Essentially, the industry is identified as a key factor in poverty alleviation through wealth
creation and income generation especially among the rural poor whose primary livelihood heavily
depends on the agri-industry subsector. The palm oil industry also provides small landholders effective
way of making their land productive while keeping ownership/rights and deriving sustained income.

The worldwide demand for palm oil products is projected to increase in the next few years, findings of
this study may encourage entrepreneurs to take part in the global exchange process and prepare them
for the challenges of the growing industry. The agricultural sector will be provided with information on
the potentials of palm oil farming which can produce healthy edible vegetable oil.

There is a growing market for palm oil, and the major countries with strong demand for exports to India
and China with 6.7 and 6.3 million metric tons, respectively in 2009 (MPOB, 2010). Lauric oil, on the
other hand, represented only 2 percent in 2009 of the world’s production of vegetable oils (USDA).

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The Philippines exported about 1.32 metric tons of coconut oil in 2010. The total vegetable oil
production in 2009/2010 was 140.21 million metric tons where CNO was at 3.62 million metric tons
and PKO at 5.50 million metric tons (USDA, 2011).

Although a lot has been written about the negative effects of it on the environment, other countries
continue to expand the plantation of palm trees because of its positive impact on the economy. Palm oil
trading activities abound in various forms like “rudeoil, refined bleached deodorized (RBD) palm oil,
palm olein, palm kernel oil, and palm stearin” (MPOB, 2011). It is commonly used in the production of
margarine, shortening, soaps, chocolates, vanaspati. It is also useful in frying food products. The palm
kernel oil (PKO) is utilized either alone or mixed with other oils to make cocoa “butter substitutes,
biscuit dough, filling creams, cake icing, ice cream”, and other food products (MPOB, 2011).

In Thailand, palm oil farming has become a major source of income to many families particularly in the
southernmost tip province of Krabi. This development is spearheaded by “Univanich Palm Oil Public
Company Limited”, one of the biggest companies in the country, has greatly improved the quality of
life among countryside residents. Crime incidence are reduced, families are provided with housing
facilities and their income are augmented because of palm oil farming. Both Thailand and the
Philippines are seeking to improve their economies through a robust agri-business industry subsector.
In this regard, information about potentials, uses and benefits of palm oil industry can boast commitment
for local and foreign investors to venture into such industry in the country.

Meanwhile, the Philippine palm oil industry has been present for many decades. However, farm
productivity remains low because of loss of support from the government and limited farming
technology adoption and prioritization. Recent developments show that improved oil palm tree farming
programs are implemented in partnership with the banking industry in providing funding for fertilizers,
seedlings and other farm needs except for the latest farming equipment. Palm oil plantations in the
country are located in Kidapawan and Bukidnon, in the second largest island of Mindanao where the
use of latest farming equipment hastened planting, pruning and other farming procedures.

In 2010, the Philippine exports of coconut oil and other by-products reached $1.57 billion wherein
coconut oil alone had US$1.217 billion in revenue (Department of Agriculture, 2012). The coconut
industry is the top export earner and is estimated to account for about 65 percent of the world traded
coconut products (PCA, 2008).

Data from the Philippine Palm Oil Development Council show that 46,608 hectares of farmlands had
been planted with palm oil in 2009. Though less than the target of 104,000 hectares, this already indicate
substantial expansion by 160 percent, from the 29,003 hectares planted in 2005. Further increase in area
planted is seen in Mindanao, where the Department of Environment and Natural Resources (DENR)
identified about 304,350 hectares of potential areas for plantation seen to uplift the local economy
(DENR, 2013). The total potential land area of 304,350 hectares may yield approximately a total of
1,170,576 metric tons of oil as noted by the DENR.

There is about 348,000 hectares of agricultural land planted with palm oil owned and managed by
cooperatives and individual growers (CDA, 2013). These areas are limited to some regions such as the
CARAGA, Northern, and Central Mindanao Regions and the provinces of Bohol and Palawan in the
Visayas. Unlike the coconut industry, the oil palm development in the country is almost entirely through
the efforts of the private sector. The Philippines is ranked 16th among the oil palm producing countries
with only 70,000 metric tons in total volume of production.

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Study Objectives

This study compared the palm oil industry development of the Philippines and Thailand. It aimed to
provide the industry stakeholders, major industry players, government agencies and investors with the
vital information to serve as basis for policy formulation and improvement reforms for the industry.
Opportunities and challenges are delineated for the two countries to provide a research-based
information for various stakeholders as inputs to planning and decision-making processes supportive to
the growth and sustainable development of palm oil industry in the countries under study.

Research Methodology

This study was carried out following a descriptive survey research design through personal interviews
with owners of palm oil plantations, managers of mills and refineries, planters and plantation workers.
Interview guides were used to keep the study in focus. An environmental scanning was conducted to
determine the amount of contribution the industry has provided not only to the economic development
of the Philippines and Thailand but also to the socio cultural development of the people. Analysis of the
factors determining the operations was conducted to uncover the challenges faced by managers and
stakeholders in the industry.

A field visit to Krabi in southern Thailand allowed the researchers to interview farm workers onsite in
the plantation and the research staff of the Oil Palm Research Center including the Managing Director
of “UNIVANICH Palm Oil Public Company Ltd.” The UNIVANICH Research Center in southern
Thailand is recognized as the best performing company in the agri-industry for its pioneering work
along oil palm agronomy and oil palm breeding. The company now exports its hybrid palm oil seeds to
many palm oil producing countries around the world.

In the Philippines, Officers of the “Philippine Palm Oil Development Council” (PPDCI) were
interviewed. Secondary data gathered from two national conferences sponsored by the PPDCI in
Kidapawan, Cotabato City and in Cagayan de Oro City, Philippines were utilized to reinforce the
primary data generated from actual field interviews. Permission was sought and granted by the Officers
of the PPDCI to interview the speakers during the conference breaks. An appointment was also set with
the Operations Manager of Nakeen Corporation, the plantation subsidiary of A Brown and the
Production Manager A Brown Energy and Resources Development, Incorporated (ABERDI).

Descriptive statistical analysis are derived and presented in the succeeding chapter. Likewise, secondary
data tables, charts and photos are shown to reinforce the presentation and discussion of results.
Secondary sourced tables and charts are adopted with permission from the authors. Implications are
drawn to substantiate the salient findings of the study.

Results and Discussion

The palm oil industry has played a major role in eradicating poverty through wealth creation specially
income generation among the poor sector of the agribusiness industry. As can be gleaned from Figure
1, the best oil palm tree growing regions are those near the equator. These suggest that the potential for
palm oil industry sustainability is vast where climatic factors have not greatly affected oil palm farming
and production activities. For the past eighteen years, the industry has not only reduced poverty but also
brought down crime rates (Clendon, 2012) particularly in areas where large plantations allowed workers
to engross themselves in palm oil farming.

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Fig 1. Palm oil growing regions in Southeast Asia.

The Palm Oil Industry in the Philippines

In Table 1, among the five vegetable oils, palm oil has the highest yield per ton per hectare as compared
with coconut, rapeseed, sunflower and soybean oils which ensures investors for a high return on
investment should they opt to venture into oil palm farming. Field interview with a small oil palm farmer
in Kidapawan, Cotabato revealed that with his unfertilized four (4) hectares of land, monthly earning
reached PhP44,000 which enable the farmer respondent to use part of his earnings for fertilizer for more
yields.

Table 1. Comparative Vegetable Oil Yields per Hectare per Year

Oil yield
Crop
(ton/hectare)
Oil palm 4.00
Coconut 1.12
Rapeseed 0.67
Sunflower 0.49
Soybean 0.38
Source: Foreign Agricultural Service of USDA, 2009

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Although the palm oil industry is still young, it is a budding industry considering its potential to address
poverty besetting the Philippines. With its vast areas that can be used for palm oil farming, the country
can become a significant player in the global arena. The CARAGA Region alone has 143,010 hectares
(Table 2) for oil palm farming (DA and PCA, 2005).

Table 2. Conservative Estimate of Potential Areas for

Cultivation in Mindanao, Philippines

Area Percent
Region in the Philippines
(Hectare) (%)
Region 09 (Western Mindanao) 38,960 12.8
Region 10 (Northern Mindanao) 77,730 25.5
Region 11 (Southern Mindanao) 8,290 2.7
Region 12 (Central Mindanao) 23,810 7.8
Region 13 (Caraga Region) 143, 010 46.9
Automonour Region of Muslim
12,550 4.3
Mindanao (ARMM)
Total 304,350 100
Source: Special Research Report of Pamplona, 2010

Pamplona (Special Report, 2010) reported a conservative estimate of 304,350 hectares in Mindanao
suitable for oil palm cultivation. Besides Mindanao, there are other areas in the country, like Bohol,
which can be cultivated for oil palm, if only the government and the private sector can work together
to have these uncultivated lands used for oil palm. The estimated 70,000 metric tons annual production
of palm oil is produced from the existing oil mills in the country (Table 3). Given the geographical and
climatic conditions, the Philippines can become a major producer of palm oil. The potential may be vast
since it can address poverty especially in the rural areas.

Table 3. Rated Capacities of Existing Palm Oil Mills in the Philippines

Oil Mills and Location Milling Capacity

Filipinas Palm Oil Plantation Inc., Agusan del Sur 35MTFFB/hr
Agumil Philippines, Inc., Trento Agusan del Sur 25 MT FFB/ hr
Kenram Industrial Development, Inc., Sultan Kudarat 20 MT FFB/hr
Agumil Philippines, Buluan, Maguindanao 30 MT FFB/hr
Philippine Agriculture Land Development and Mill,
Inc. 30 MT FFB/hr
Carmen, Bohol
Source: Agumil Philippines, Incorporated

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Palm Oil and Lauric Oil Price

The existence of lush hectarage of coconut have to be complemented with oil palm plantings to meet
the country’s demand for edible oils. In comparison with the palm oil produced in the Philippines, it is
almost entirely consumed in the domestic market because the country is a large importer of palm oil
relative to its domestic production. Lauric oil has a relatively small market share. Despite its limited
share, its average price in the world market (Rotterdam price) is at its premium over other oils’ prices.
The changes in prices of the vegetable oils including crude palm oil and lauric oil in the world market
are attributed to the growing demand of a rising population with increasing wealth and demand of cities
that are increasingly urbanized. The demand has been estimated at 4 to 5 million tons extra per annum
(Lipid Library, 2011).

The country’s policy to attain sufficiency in lauric oil and palm oil is boosted by a number of
opportunities, namely: “(1) Increasing demand for palm oil as cooking oil by fast food and fish canning
industries (2) Growing interest of the private sector to develop the industry (3) Coconut industry’s thrust
to use the coconut oil for the production of higher value products such as in the oleo-chemicals”. The
Philippine Coconut Authority believes that, like coconut, the oil palm industry is an industry with
potentials to alleviate poverty in the country by providing a stable source of income to Filipino farmers
and their families.

Challenges

The primary challenge besetting the Philippine palm oil industry concerns with the mindset of the
country’s national leaders which are crucial in establishing support for the expansion of oil palm
plantations. This calls for a government policy supportive to the large scale utilization of vast
agricultural areas for oil palm planting. There is a felt need to establish a global quality science and
technology (SAT) research institution on palm oil to adequately respond to the emerging opportunities
and challenges in the palm oil production and utilization in the country.

In the ecology front, environmentalists clamor about the virgin forest destruction and oil palm
processing pollutants in Indonesia that could also happen in the Philippines, painting a false and
damaging advocacy which could hamper the growth of the promising palm oil industry in the country.
The fact is, over a million hectares can be planted without cutting a single tree in a virgin forest using
zero waste technology. Technologically, the Philippines can utilize oil palm processing waste to
produce organic fertilizers, biofuel, and electricity to solve the energy problem in Mindanao.

The Philippines’ Department of Agriculture (DA) could provide leadership with strong involvement of
Philippine Coconut Authority (PCA) in the preparation of the master plan for the palm oil industry
development. More funds could be allocated for R&D through PICCARD. The Lug’s could generate
funds for the establishment of commercial oil palm nurseries and oil processing plants. A fund from
countryside development fund could be allocated for the development of oil palm nurseries and demo
farms.

The PCA has as its goal, the complementary production of coconut oil and palm oil to achieve maximum
outputs for domestic consumption and export. Working towards this goal means moving forward to
provide the country with food security, poverty alleviation, employment generation, and foreign
exchange earnings. Evidently, there is a need to implement trainings to improve the skills of the growers
on production, processing, and enterprise development and to strengthen the farmers’ organizations
such as cooperative on micro-finance and management (Coco munity, 2011). These trainings must
address both oil palm growers and coconut farmers.

One positive challenge to pick up is increase in the use of biofuel as a source of energy which can offer
another milestone for the industry. Thailand alone, the necessity to produce six (6) MN liters of
biodiesel per day (Wongsuryrat 2011) can be seen as both a challenge and an opportunity. While

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challenges are evident in the implementation of the three pronged strategy of high income, value
addition and on zero waste, the Thailand government has been very supportive in formulating and
implementing policies geared towards addressing these challenges.

Opportunities

The Philippine Palm Oil Development Council, Inc. takes pride in promoting the expansion of oil palm
plantings to over 73,460 hectares during the last ten years in the face of many challenges. Although
there was lack of support from the national government in the promotion of this farming activity and
articles written by environmentalists posed damaging statements to the state of the industry, the council
has initiated some steps to inform people about the benefits of oil palm farming.

Opportunities abound in this fast growing industry. In fact, data of the Index Mundi revealed that the
Philippines was ranked number 1 for annual growth rate among countries growing palm trees as of
2013. This ranking indicates that the support to the industry come not only from the government but
also from other non-government units and the private sector. Privately owned oil palm plantations have
already started producing outputs despite the series of calamities that the country had.

Pamplona (2012), a retired Professor of the University of Southern Mindanao, a plantation owner and
an expert in oil palm farming, suggested the steps to attain stability in oil palm cultivation in the country.
For the PCA to implement a program making oil palm industry and the coconut industry as partner
industries. For the National Government to negotiate with the World Bank and other financial
institutions in the country for oil palm expansion and establishment of palm oil mills

Although the officers of the Philippine Palm Oil Development Council, Inc. (PPDCI), the organization
spearheading the initiatives to develop the industry in the country, are very optimistic as to the future
of the industry, a lot of effort still needs to be exerted in the form of an advocacy in order to keep more
people informed not only of the economic benefits of the palm oil but also its health benefits.

Reduced price of palm oil since Oct 2012 to date has also reduced farmers’ income yet still above the
poverty threshold level giving a typical OP small farmer (3 ha) the capacity to buy adequate nutritious
food plus other household needs. Income of oil palm farming among smallholders at 6 to 25 years price
of FFB of P6.00/kg. With 3 ha, a farmer can buy enough nutritious food for the family plus surplus
cash for other household needs and support the college education of his children.

Small landholders (3-5 ha) are amazingly transformed from surviving to thriving (prosperous) farmers.
The change from traditional crops to OP easily liberated smallholders from poverty. Fields which are
difficult to farm with traditional crops and risky for bank to invest or for bank to finance (due to low
and uncertain income) are transformed to high productivity with OP. Farmers are provided with high
bi-weekly and sustainable income thus expanding the breadth of the Philippine agriculture.

In CARAGA and Compotela Valley Regions, low income forest tree plantations are converted to OP
using zero burning. With forest crops like Acasia mangium and falcata, income and employment comes
only at planting and harvesting of trees. Oil palm provides employment and income every 15 days for
25 years. PPDCI officials provided the uniting force in reviving the “bayanihan” (helping each other)
spirit in palm oil farming to the Philippines. These include the intensified global technology search and
technology transfer, the promotion through training crop-livestock integration among smallholders for
staple food production. Added income and to cope with fluctuating global price of palm oil and climate
change. Convinced Lug’s and national leaders to support OP farming to overcome poverty and to
promote rural prosperity. Prepared, produced, and distributed techno guides, extension materials, and
book on OP production. Conducted dialogues with lawmakers for legislative support and customs
officials to overcome smuggling.

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The Palm Oil Industry in Thailand

Thailand being the third largest player in the global market for palm oil has positioned itself not only
as a key supplier of crude palm oil (CPO) but also as a leader in the propagation of hybrid palm oil
seedlings. Small farms with less than 20 acres comprise 80 percent of the area planted with oil palms.
No clearing of primary forest was done by the locals as areas planted to oil palm were areas planted to
other crops with less income potential.

The supply and demand for oil palm in Thailand are driven by four factors (Clendon, 2012): namely;
“new high demand from domestic biodiesel policy, improved drought tolerance oil palm breeding,
increased cop yields, and new investment windows from formulated energy policies”. In 2008, planted
area in Thailand was 580,000 hectares which grew to 736,000 hectares by 2011. Crude palm oil (CPO)
production has reached up to 1.60 million tons in 2011 from 1.29 million tons in 2010 (Clendon, 2012)

Fig 2. Area Planted to Oil Palm Trees in Thailand by 2008

Fig 3. Production and uses of palm oil in Thailand as of 2010

As of 2008, area planted to oil palm was only 671,700 hectares. Three years after, it was expanded to
736.000 hectares. Thailand’s edge over other palm oil producing countries is its R&D sustained
initiative through continuing quest for new knowledge in palm oil cloning and breeding. Continued
experimentation has highly empowered its oil palm farming technology, which is now being
benchmarked by other oil palm producing countries like Africa, Colombia, Malaysia, Indonesia, and
the Philippines. Thailand’s focus on seed propagation and breeding has contributed a lot to the
industry’s growth in other developing nations all over the globe.

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The data in Figure 3 show the usage of palm oil in the manufacture and production of various
commodities in Thailand. Only 9.0 percent of the country’s total production is exported to other
countries while the rest of the 1.2 million tons of crude palm oil is distributed to other industries, with
biodiesel having the highest usage in 2010. In 2012, palm oil was in demand in fifteen different types
of industries either as a main product or an additive for the production of various products. Although
Thailand has been globally recognized as a major exporter of its hybrid seeds and seedlings, it has
slowly developed its new markets for crude palm oil to other parts of Asia and Europe. Univanich paved
the way for Thailand to broaden its export market, being the largest producer of palm products in
Thailand.

Fig 4. Seed exports to 10 other countries

A major contributor to Thailand’s economy, UNIVANICH’s business structure does not only show a
profit-oriented organization but also a socially responsible one. Aside from milling the harvest from the
company-owned plantations, it also services other outside growers by conducting initial farming
activities such as trainings, and making them a venue for milling its harvest. Moreover, Seeds are
exported (Figure 4) and are already growing in ten different countries, namely; the Philippines,
Myanmar, Vietnam, Cambodia, Indonesia, Malaysia, India, Nigeria, Ethiopia, and India. The company
is also supplying quality seedlings to the small holders within Thailand. Thailand’s focus on research
and development has actually gained attention from other palm oil producing countries as these
countries have benefitted in terms of a continuous supply of seedlings and a shorter harvest waiting
periods. Hybrid cross breeds of up to 650 have been tested to produce new generation of palms. These
hybrid palms are able to bear fruit 24 months after planting. These are selected for high yield despite
Thailand’s dry climate.

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Fig 5. Nutrients equivalent of biomass replacing chemical fertilizers (Biomass coming from trunks
and fronds of palm oil)

A study on irrigation was conducted to identify solutions to four or five months of dry season causing
soil water deficit. The study that tested the oil palm’s water requirements and the best way of applying
such technology revealed increases in yields by 10 tons of fruit per hectare. However, the amount of
fertilizers should also be increased. The increase in yield as a result of the experiments has benefited
not only the local farm growers but also other countries that are dependent on the supply of the seeds
and seedlings. Myanmar, India, Vietnam, Cambodia, Indonesia, Nigeria, Ethiopia, Colombia, Brazil,
and the Philippines are recipients of the exported palm seeds from Thailand.

Terracing the hillsides is one planting practice intended to prepare the soil to conserve the moisture and
protect the soil before planting. Thailand is able to constantly find means to develop environmentally
sustainable planting practices. Higher yields were seen after experimentation. However, it took them
years to discover that the exportation of hybrid seedling can be a major source of income and a
contributor to the economic growth of Thailand. The normal planting density as practiced by farmers
in Thailand is 143 palms per hectare of land area. This density gives enough room for underplanting.
However, continuous experiments in other areas for higher density planting were also done to maximize
yield.

The methane capture of palm oil mill effluent (POME) from large biogas facility generate electricity.
The gas generators, which are fueled by methane gas, are used to provide electricity to the national grid,
thus, increasing economic and environmental sustainability. There is now a large reduction of
greenhouse emissions.

Thailand’s Initiatives

Part of Thailand’s initiative is to accommodate researchers to their facility to provide information on

palm oil cultivation. In a visit to the research center last September 1, 2012 – the researcher was
educated on the potential benefit of palm oil cultivation. The series of experiments that the research
center conducted to reduce the waiting period for harvest has greatly benefited its own local industry
but also their client countries who have started oil palm farming.

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Fig 6. Magnitude of the gap between production and utilization

Source: Manit Wongsuryrat, Vice Chairman, Palm Oil Industrial Club

The magnitude of the gap between production and consumption or utilization is vast as manifested by
the increase in the demand versus the volume of production. The demand is much greater than the
volume produced by Thailand in 2011 as reported by Wongsuryat, the Vice Chairman of the Palm Oil
Industrial Club, during the Asian Palm Oil Conference held at the Maritime Resort and Spa on August
28 – September 01, 2012. This report indicates that there is a need to strengthen collaboration among
industry associations to narrow down the gap between production and consumption. Utilization of oil
palm products by the different industries needs to be given much attention so as to strengthen the
industry’s bond with the consumers.

Challenges and Opportunities

The challenge for Thailand is to sustain its efficient and high level performing palm oil industry attained
during the decade. With other emerging countries like Malaysia fast tracking its palm oil production,
there is no life time guarantee to ever capture the demand market over the long run thereby the need to
stay competitive with the rise of new market players. Another challenge is the labor intensive palm oil
production from the plantation, to the milling, to the distribution channels.

The mandate to increase the use of biofuel as a source of energy can be another opportunity. Thailand
needs to produce 6 MN liters of biodiesel per day (Wongsuryrat, 2011) can be seen as both a challenge
and an opportunity. A challenge in the sense that palm oil production from the plantation to the mill to
the distribution channel is labor intensive. However, it can be viewed as an opportunity that needs to be
continuously prepared in all aspects - from farm preparation and management, sustainable mill
operations and practices, to the transportation and distribution of products and its derivatives.

Another source of opportunity for the palm oil is its health benefits. Palm oil has high vitamin E content
with about 600-1000 ppm in the form of tocotrienols (70 percent) instead of tocopherols(30 percent).
The vitamin naturally fights, provides a longer oxidation, shell-life, reduces LDL-cholesterol, and
contains anti-cancer properties. There is a huge market for the commercialization of palm Vitamin E
for both human health foods and animal feeds (Basiron et al., 2004). While challenges are evident in
the implementation of the three pronged strategy of high income, value addition and on zero waste, the
Thailand government has been very supportive in formulating and implementing policies geared
towards addressing these challenges.

Conclusion

The palm oil industry suggests a promising future for the Philippines and Thailand. Positive
opportunities outweigh the challenges for the Philippines in palm oil industry with Thailand being much
ahead as the third major player in the world, supplying the demand not only for crude palm oil and its
derivatives but also for seeds and hybrid seedlings.

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The years and resources spent for research and development (R&D) have paid off for Thailand, valuing
from the fast growing industry during the past decade. Programs dealing with economic viability, social
responsibility and environmental sustainability are in place to provide the needs of the Thai stakeholders
of the industry. The UNIVANICH, as a private entity, is essentially paving ways in improving the
quality of life of Thai workers by solving part of the unemployment problem in Thailand. Overall,
Thailand’s palm oil Industry has caught up with the global competition.

Although the Philippines often experiences natural calamities and disasters that are threats to the
development of the palm oil industry, there is a vast promising local and international markets with
viability and sustainability as confirmed by R&D studies. Oil palm planting expansion in the Philippines
is presently gaining momentum with increasing number of planters and palm oil growers. This
accelerating expansion provide farmers open opportunities for high income generation, promote rural
prosperity, and is seen to reinforce country side development on upstream and downstream palm oil
industry and related initiatives.

Recommendations

Collaboration of government organizations such as the Ministry of Agriculture, Office of Agricultural

Economics and other non-government associations like the Thai Palm oil Association, Palm Oil
Industrial Club, Crushing Mill Association, Refinery Association, and Biodiesel Association is needed
to strengthen the palm oil industry in Thailand. Meanwhile for the Philippines, government support is
badly needed to overcome the large vegetable oil import, low agricultural productivity, and high rate of
poverty. More research activities may be undertaken to find out the effect of segmentation of gas
brought about by oil palm planting.

The two countries under study, particularly the Philippines, may benchmark from neighboring oil palm
growing country like Malaysia with respect to technological applications for farming and sustainable
production of palm oil. The “zero waste” practices in Malaysia in the full utilization of biomass from
the plantation and the mills are worth emulating to make use of the wealth generated from the fruit
bunches. Income derived from producing construction materials and furniture out from the waste is
something that the Filipinos should take advantage to solve the unemployment problem in the country.

References

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