Kerala is Planning on Doubling its Palm Oil Production in the Next Five Years

Kerala is planning a strong push to more than double the area under palm oil production in the next five years, attracting farmers with subsidies and price support mechanisms to reduce the state's significant reliance on palm oil imports for domestic usage. 

By 2027-28, the state plans to expand oil palm planting to another 6,500 hectares (ha), largely through Kollam-based Oil Palm India, Kottayam-based Plantation Corporation of Kerala (PCK), and individual growers distributed across 13 districts. 

Kerala consumes 2.5 million tonnes of palm oil each year but only produces 30,000 tons of fresh fruit bunches (FFBs). Only 17 percent of the FFBs are made out of crude palm oil.

India is too reliant on imports, the majority of which comes from Indonesia and Malaysia. Given the rising prices of edible oil, the goal is to encourage oil palm development as an alternative to rubber and other crops," said Vincent George, general manager (projects), Oil Palm India, a 51:49 joint venture business between Kerala and the Centre. 

Future expansion would be driven by Oil Palm India, which has 3,646ha of planting distributed among three estates in Kollam: Yeroor, Chithara, and Kulathupuzha.

According to George, individual private farmers will be encouraged to switch from rubber and other traditional crops to oil palm through subsidies, and viability prices will be pushed as well.

According to a senior officer at PCK, which has an oil palm plantation on 705 ha of its land in Kalady, the company plans to expand its oil palm plantation by another 60 ha in 2023. 

"As our Kalady estate is close to Sholayar Valley and Athirappilly, and risks frequent elephant assaults," he stated, "we have severe limits to expand the area under cultivation."

Palm oil prices have risen from '411/10kg in 2015 to '1,068/10kg in 2021. Following the start of the Ukraine war, the price of fresh fruit bunches has risen from '7-8/kg to '19/kg.