KUALA LUMPUR: The domestic agriculture sector is forecast to expand by 2.2% in 2026, supported by all subsectors except forestry and logging.

The oil palm subsector is projected to produce higher CPO output attributed to increased FFB and oil extraction rate (OER).

These improvements are mainly driven by expected favourable weather conditions, expansion of matured plantation areas, and further improvements in harvesting practices, as well as continued adoption of mechanisation.

Additionally, improved OER, owing to more frequent harvesting activities and better field management, is likely to enhance fruit quality and reduce losses.

The report noted that these developments will provide a lift to the overall expansion of the oil palm subsector during the year.

In terms of price, the average CPO price is forecast to range between RM3,900 and RM4,100 per tonne.

In 2025, CPO production and output of competing vegetable oils are expected to increase.

Meanwhile, the rubber subsector is anticipated to rebound in line with higher production from both the estate and smallholding segments.

Further, the report noted that the output of livestock, fishing, and other agriculture subsectors are also expected to expand, attributed to growing demand from household spending and tourism activities.

In addition, the upcoming action plan under the national blueprint on food security is expected to propel the growth of subsectors.

Furthermore, the 13th MP initiatives aim to modernise the agriculture sector by prioritising large-scale agriculture, accelerating modern rice farming, and adopting the latest technologies, which will further catalyse these subsectors, the report said.

 Business