Comparison of the Palm Oil Industry in Malaysia and Ghana

Malaysia and Ghana are both producers and exporters of palm oil in the world. The path of their industries diverged in the early stage of development, and eventually went in opposite directions. Malaysian industry has been dynamic and successful, and Ghana, inactive and limited. Malaysia and Ghana had different industry structures, and different market orientations. Because the oil palm tree is indigenous to West Africa, the fruit of the palm tree was well known and used by natives of southern Ghana for many centuries.

Even today, it is part of their daily life routines, and constitutes the most important source of edible oil. For Ghana, crude palm oil production was not Just to meet the growing demands of the world economy, but also part of the local economy which met domestic needs. For Malaysia, however, there was virtually no tradition of using palm oil before the colonial era. Traditionally, coconut oil has been used as a frying medium, and palm oil, beyond its industrial uses, has no special cultural significance for local communities. Ghana and Malaysia were both British colonies.

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The first oil palm plantation and mill was established in Ghana by the British Alexander Cecil Goff in the early sass. The British in Malaysia went to Ghana to learn more about the culture of oil palm plantation and production techniques. The first palm oil plantations made in Malaysia were British and were implemented in 1917. Malaysia has a great history and cultural experience of large- scale planting of crops, including palm oil. She began dominating the world market or palm oil in the early sass with 573,000 metric tons exported per year.

According to the U. N. Food and Agriculture Organization, Malaysia is currently the number two exporter of palm oil in the world after Indonesia. In contrast, neither the pre-colonial nor the colonial period in Ghana generated much experience with large-scale plantations. Successive initiatives in Ghana to stimulate palm oil production have met with little success, leaving the country with a small palm oil industry. Ghana started exporting the palm oil in 1993 with only 3,000 metric tons. According to the U. N.

Food and Agriculture Organization, Ghana is currently the 1 5th exporter of palm oil in the world. According to the United States Department of Agriculture (USDA), in 2011 Ghana exported 100,000 metric tons of palm oil, while in the same year Malaysia exported 164,000,000 metric tons. There exist two different markets for palm oil in Ghana, the home consumption and industrial market. They have a structure of manufacturing that is unlike Malaysia. In Ghana you can find small and medium scale mills in addition to the large scale oil palm plantations.

Unlike Ghana, the Malaysian palm oil industry is more focused on creating product for export. According to the U. S. Department of agriculture, Malaysia paid for “important agricultural research and varietals development that benefited palm oil producers throughout the region. As a result of the coordinated efforts of government and commercial companies over this extended period (1979-2010), Malaysian palm oil production increased roughly 600 percent – averaging 7 percent growth per annum.

Ghana by contrast did not have the resources or interest in investing as much. In Comparison of the Palm Oil Industry in Malaysia and Ghana By Jim differently developed. Ghanaian industry was from the very beginning dominated by smallholders, and palm oil is a key element in the national diet. Malaysia industry did not integrate smallholders, and its production has been completely market-oriented towards the outside world, while the domestic market is negligible. However, both industries contribute to the development of their countries.