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In 2025, the gross domestic product (GDP) contribution from palm oil in Malaysia was estimated to be at *** percent of its GDP. Palm oil is one of Malaysia’s primary industries, and its main agricultural export globally. 

Importance of palm oil to the Malaysian economy

Malaysia is the world’s second-largest producer and exporter of palm oil, after Indonesia. In 2024, it exported around **** million metric tons of palm oil and palm-based products. These exports were valued at around ** billion Malaysian ringgit. All in all, the palm oil industry contributed around ** billion ringgit to Malaysia’s total gross domestic product.

Outlook of the palm oil industry

In recent years, concerns about the negative impact of palm oil cultivation on the environment, as well as the rise of protectionism in the global economy, has threatened Malaysia’s palm oil industry. The European Union, Malaysia’s most valuable export market, had effectively passed a law to phase out the use of palm oil in biofuels by 2030. Furthermore, unfavorable weather and the COVID-19 pandemic had led to a decrease in palm oil stockpiles and production.

To counter the volatility in global palm oil demand, Indonesia, the commodity’s largest producer and exporter, has introduced policies to increase domestic consumption through biofuels. Malaysia’s domestic consumption of palm oil, however, is but a small fraction of what it exports. It would therefore need to do more to secure a market for its palm oil.