KUALA LUMPUR (Jan 13): The Malaysian Palm Oil Board (MPOB) will launch an official national reference price for used cooking oil (UCO) in the first quarter of this year. 

Announced by Plantation and Commodities Minister Datuk Seri Dr Noraini Ahmad, the measure is designed to improve market transparency, promote fair trading, and protect smaller industry players from price manipulation. This comes amid the rising demand for UCO as a feedstock for biofuels and palm-based chemical products, she said in her opening speech at the Palm Oil Economic Review and Outlook Seminar 2026 on Tuesday. 

“This benchmark will provide clearer price signals, support fair trading practices and help protect industry players, especially small operators, from price manipulation and incorrect information,” she said. 

She added that MPOB will continue “to strengthen governance, clear tracking and market oversight to ensure that UCO is managed in a safe and orderly manner”. 

The MPOB said the reference price is based on the local delivered price, reflecting UCO sold within Malaysia and including local transport costs, rather than export-based free on board (FOB) pricing.

“It (the reference price) is to make it more transparent, so that people have a reference whenever they would like to sell whatever UCO they have collected. This will help ensure that they get a good price and that the market is more regulated, so people are treated fairly and not cheated. Basically, we want to make sure it becomes a healthy business, that people are more interested, and that more people are encouraged to collect and sell,” MPOB director general  Datuk Dr Ahmad Parveez Ghulam Kadir told reporters. 

“This also creates another source of revenue for the country. It is a good business and, of course, good for the environment as well. That is why we are doing this, to assist consumers, specifically those who use cooking oil and sell it off, so they can get the best price for their used cooking oil,” he added.

In addition to strong domestic demand, MPOB chairman Datuk Mohamad Helmy Othman Basha said UCO is widely sought after for biodiesel production, particularly in European markets.

UCO comes from oils and fats that have already been used for cooking or frying, and is produced by restaurants, fast food outlets, food processors, and households.

UCO has become an important raw material for biofuels, especially as sustainable aviation fuel (SAF) is expected to drive growth in the biofuels market in the coming years.

Noraini emphasised the need to expand mechanisation across the oil palm industry to improve efficiency and address labour shortages, noting that current usage is uneven — 44.5% for fertiliser application and 51% for in-plantation collection.

Harvesting — the most labour-intensive segment — continues to lag significantly, with mechanisation at just 4.3%, she added.

“In the near term, the industry will continue to require sufficient manpower, particularly for field operations and harvesting,” she said.

She said the government will work closely with relevant agencies to facilitate approved labour needs, including appropriate foreign worker arrangements, while efforts to raise productivity continue.

On the other hand, Noraini urged estates and smallholders to adopt a more proactive approach to replanting, use improved planting materials and strengthen good agricultural practices.

“Globally, palm oil production is expanding beyond Southeast Asia, including in parts of Africa and Latin America. This makes it essential for Malaysia to continue improving practices so that our palm oil remains recognised as a responsibly produced and highly efficient crop”, Noraini added.