Understanding Malaysian Palm Oil Industry - Production Estimation Calculation

The basis of revenue calculation base generally on your production estimation. Before going into palm oil, it is to know that different type of soils may give you different yield. For example, soil near the river would be more fertile than those at the top of a mountain. Those sandy soil may not yield as well as red soil and so forth.

Then you need to consider the type of palm you intend to plan. One of the most popular type would be DXP whom I cannot remember who the initial producer is, probably one of the companies with the Sime Darby plantation group. Felda is also another popular choice. I would frankly advice people to not grow other types as these two types are proven to be quite effective in yields.

A rule of thumb that in general, people would attempt to yield as close to 30tonnes per hectare per year or around 1.2tonnes per acre per month. If you follow as closely to that doctrine, you will get around RM700 revenue per month per acre. This is base on a FFB (fresh fruit bunch) price of nearly RM600 (current price). So theorectically if you have a 100acre plantation it would give you a good income of RM70,000 per month on average. This is of course prior to costs.

I will leave costing to another day as costing would be a specialty in itself.

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