Sabah Palm Oil 2026 — Production, Hectares & Mill Data

Why palm oil matters to Sabah

Palm oil is embedded in Sabah’s identity and economy. It is the state’s largest agricultural export, second only to petroleum in total export value, and a major source of rural livelihoods.

Production and area

According to MPOB, Sabah had 1,496,558 hectares of oil palm in 2025, up 0.9% from 1,483,699 ha in 2024 (which was down 1.7% from 1,510,025 ha in 2023). That is about 26% of Malaysia’s 5,700,050 ha. Sarawak (1,659,857 ha) has more planted area than Sabah.

Sabah produced 4,274,440 tonnes of crude palm oil in 2024, down 5.2% from 4,507,460 tonnes in 2023, and about 22% of Malaysia’s 19.34 million tonnes. That made Sabah Malaysia’s largest CPO-producing state that year, according to the Ministry of Plantation and Commodities in a written parliamentary reply reported by Bernama on 29 October 2025 (Sarawak: 4,172,409 tonnes). Sabah’s fresh fruit bunch yield was 15.74 tonnes per hectare and its oil extraction rate 20.53%, against national averages of 16.70 t/ha and 19.67%.

In 2025 Sabah produced 4,410,291 tonnes, up 3.2%, about 22% of Malaysia’s 20.28 million tonnes. Sarawak’s output rose faster, 7.8% to 4,496,339 tonnes, putting it ahead of Sabah. Sabah’s estate fruit yield improved to 16.76 t/ha (national 17.77) and its oil extraction rate was 20.31% (national 19.74%) (MPOB, Overview 2025).

Source: MPOB, Overview of the Malaysian Oil Palm Industry 2024 and 2025 (checked 28 September 2026). Earlier versions of this page gave 1.59 or 1.68 million ha, 28% and 4.8 million tonnes; those figures did not match MPOB.

The palm waste opportunity

Oil is only about 10% of the oil palm; the rest is empty fruit bunches, fibre, kernel shells, fronds and trunks. The state energy plan (SE-RAMP 2040) says Sabah produces about 24.7 million tonnes of this biomass a year, but only about 5% is used for power (17.7 MW in 2021). Using all of it could give an estimated 364 MW. The plan counts 124 palm oil mills, mostly on the east coast, and estimates that a biomass public-private partnership could bring RM13.5 billion of investment and about 25,000 jobs.

The plan also proposes a state policy that would require a minimum amount of empty fruit bunches to be made available for power generation. Status as of September 2026: we have not found a published policy yet. More on the renewable energy page.

Who grows Sabah’s palm oil

Sabah’s oil palm is grown by large plantation companies, by independent smallholders, and on state and federal land schemes such as those of the Sabah Land Development Board (SLDB) and FELDA. Estates usually run their own mills; smallholders sell fresh fruit bunches to nearby mills.

The Malaysian Sustainable Palm Oil (MSPO) scheme reported that 80% of Sabah’s oil palm plantations were MSPO-certified, as reported in January 2024, against 92.42% nationally, across 33,074 estates and smallholdings in the state.

Source: MSPO, announcement of 12 January 2024. We have not found an official breakdown of Sabah’s planted area by estates and smallholders, so earlier estimates (55% / 35% / 10%, “87,000 smallholders”) have been removed.

Where it is grown

In the same reply, reported in October 2025, the ministry said 129 palm oil mills operate in Sabah (the state energy plan counted 124). Most are on the east coast, according to the plan, around Tawau, Lahad Datu, Sandakan and Kinabatangan. We have not found official planted-area figures by district, so the earlier district chart has been removed.

Export value and global trade

Palm oil exports are a pillar of Sabah’s trade profile. In 2025, Sabah exported RM16.8 billion of palm oil, about 29% of all Sabah exports and just behind crude petroleum at 29.7% (DOSM, reported by Bernama). That was down from RM17.3 billion in 2024.

MPOB does not publish export destinations by state. For Malaysia as a whole in 2024, the largest buyers were India (17.9% of palm oil exports), China (8.2%), the European Union (7.7%), Kenya (7.5%), Türkiye (5.4%), the Philippines (4.1%) and Japan (3.6%). The average CPO price in 2024 was RM4,179.50 per tonne, up 9.7% on 2023 (MPOB).

Industry challenges and future outlook

Ageing trees: older palms yield less, and replanting means several years without a harvest, which is hardest on smallholders. Sabah’s CPO output fell in 2021, 2022 and 2024 (MPOB).

Price volatility: in 2024 alone the monthly average CPO price ranged from RM3,783.50 (January) to RM5,119.50 (December), per MPOB. Smallholders feel these swings most.

Labour scarcity: Much plantation work is done by migrant workers from Indonesia and the Philippines. Recent immigration enforcement and COVID-related restrictions have created labour shortages, raising wages and eroding profitability. Automation (harvesting robots, drones) is emerging but remains expensive and not yet competitive with cheap labour.

Environmental scrutiny: Western buyers and NGOs increasingly demand certified sustainable palm oil (MSPO, RSPO). Compliance is costly and requires traceability systems. Some buyers are shifting to alternative oils or reducing palm use, constraining demand growth.

Downstream opportunities: The state government is promoting downstream processing — building more refineries, oleochemical plants, and biodiesel facilities — to capture more value locally. However, capital requirements and competition with larger facilities in Indonesia are barriers.

Frequently asked questions