KUALA LUMPUR: The palm oil industry, with its current slow expansion in Southeast Asia, faces a major challenge in meeting global demand for oils and fats by 2018, said Oil World executive director Thomas Mielke yesterday.

“If we do not accelerate (oil palm) planting and replanting in Southeast Asia, and if we do not raise yields to possible levels, then we will face a challenge to meet global demand in 2018/2019,” he told the Oils and Fats International Congress 2014 here.

A rough estimate by Oil World projects that an additional 32 million tonnes of palm oil will have to be produced to satisfy global demand by 2025, he said.

“When we look at the rate of Indonesian palm oil growing expansion, it makes us very nervous,” he said, adding that the reasons for the slow expansion in Southeast Asia is lack of land as well as the negative campaign directed by non-governmental organisations against palm oil.

Mielke said it would be detrimental to be hemmed in by negative sentiments or perceptions against palm oil as it is a huge contributor in satisfying the global demand for oils and fats, which is more than that for any other vegetable fat.

The drivers for increasing demand for oils and fats are growth in population and increasing urbanisation, which have led to an increase in the middle class and income growth, as well as more demand for biofuels, he noted.

China and India, the world’s largest importers of palm oil, are facing a huge demand problem with lack of land for oil seed planting, he said.

“In China, oil seed production is decreasing because acreage is decreasing, but demand is rising. In India, it is the same. They are importing close to 70% [of their] oil requirements,” he added.

Mielke said world demand for oils and fats has been growing at an average 7 million tonnes a year over the past two years and global demand is roughly projected to increase by 93.5 million tonnes by 2025.

PT Smart Tbk president director Daud Dharsono said Indonesia currently has 10.01 million ha of oil  palm plantations that produce 28.4 million tonnes of palm oil, and that the country plans to expand them to 13.074 million ha by 2025.

This, he said, will result in the production of 50.15 million tonnes of palm oil, with 23.7 million tonnes for export.

Daud said Indonesia’s expansion plans will see an addition of 350,000 ha per year from next year onwards, with a gradual decline to 150,000 ha per year by 2025.

The congress is jointly organised by the Malaysian Oil Scientists’ and Technologists’ Association and Oils & Fats International, in collaboration with the Malaysian Palm Oil Board.

This article first appeared in The Edge Financial Daily, on November 6, 2014.