Management of the Malaysian Palm Oil Supply Chain: The Role of FFB Dealers
Source: Oil Palm Industry Economic Journal. v.9(1)/2009 | Author: Ayat K Ab Rahman
Subject:

Intro:

The study found that there are areas for improvement in the FFB dealer sub-sector in the Malaysian palm oil supply chain.


Abstract:

The fresh fruit bunch (FFB) dealer sub-sector is part of the Malaysian palm oil supply chain. It is inter-related with other sub-sectors either directly or indirectly. It serves as a intermediary between the smallholders and the millers. FFB dealers need to be efficient so that the FFB sent to the mills within 24 hr after harvesting remain in good quality. Shortfalls may effect the efficiency of the other sectors as well as the whole industry. The study found that the dealers have found ways of making profits and have undergone several structural changes. Despite the challenges, there is still scope for their improvement.

Elements of inefficiencies among oil palm dealers:

  • Offering OER to smallholders without following standard procedures
  • Not offering KER to smallholders
  • Dirty conditions at the ramp
  • Delay in conveying FFB harvested by smallholders
  • Conveying unripe FFB

The study found that there are areas for improvement in the FFB dealer sub-sector in the Malaysian palm oil supply chain. Increasing their efficiency will benefit other sub-sectors, especially the mills which will receive higher quality FFB. In return, the smallholders will also benefit as they will be able to receive a higher income due to an improved supply chain in the industry.

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