By Ashley Tang and Rajendra Jadhav
Malaysia's Johor Plantations expects its palm oil output this year to fall about 5%, with the downturn likely to extend into 2026 as it replants to lower the average age of its estates.
Internal fresh fruit bunches (FFB) production is expected to fall after an output dip in the first half of 2025 despite a rebound in the second, managing director Mohd Faris Adli Shukery said on the sidelines of an industry conference on Thursday.
Johor Plantations processed 1.49 million metric tons of FFB, including 358,943 metric tons from external suppliers last year.
Mohd Faris said he expects total production to be lower in 2026 too due to an accelerated replanting programme.
"We are moving towards a 6% to 7% replanting rate ... because we are looking to ensure that the age profile of our plantations is normalised," Mohd Faris told Reuters at the Malaysian Palm Oil Board event.
The company's normal replanting rate is 2% to 4%, he said.
"By virtue of that accelerated rate, we will be looking at an age profile of about 11 years by 2030. Currently, our average age profile is about 14 years, it is still young, but the longer we hold out, the worse it could become in terms of productivity and efficiency of our estate," he said.
Replanting is done to maintain long-term productivity and profitability as oil palms more than 20 years old are considered beyond their peak and would experience significant yield declines and increased susceptibility to disease.
Newly-planted palms begin producing fruit after three to five years.
Replanting rates in the world's second largest palm oil producer, averaged about 2% over the past five years, half the government's 4% target, Malaysian Palm Oil Board data showed.
Mohd Faris said Johor Plantations' integrated sustainable palm oil complex is expected to be operational by the second half of 2026, housing several facilities, including a mill and a refinery, powered by a renewable energy power plant.
"We will also probably be producing biogas in order to supply to the grid because upon full completion, we will have excess power to export," he said.