Reading a plantation's age profile and yields

The age of the palms goes a long way to deciding what an oil palm estate will produce over the next 10 years. Two estates of the same size can harvest very different amounts of fruit because one is in its prime and the other is due for replanting.

So a valuation starts with two things you can check: the area planted in each year and the yields the estate has actually recorded. A projected yield in a sales memo is no substitute for either.

Immature and mature blocks

Estates are run in blocks, and each block has a planting year. Plantation records split the planted area into immature palms (tanaman belum menghasilkan, TBM) and mature palms (tanaman menghasilkan, TM). Immature blocks are usually counted as TBM 1 to TBM 3, by year since planting. They need weeding, fertiliser and road upkeep but give little or no fruit. A block joins the mature area once regular harvesting starts, often about 30 months after the seedlings go into the field. The basics of a plantation business cover the full life cycle.

Put the blocks into a table of hectares by planting year and you have the estate’s age profile. It shows when output should rise, as immature blocks come into harvest, and when it will fall, as old blocks reach replanting age. It also shows how much of the price you’re paying for palms that don’t produce yet.

A replanted block starts again as immature and gives no fruit until its first harvest, some 30 months on. An estate planted over two or three years will age all at once, and its replanting will cut income for several years in a row unless it’s phased.

How yield moves with age

Yields follow a curve. The first harvests bring small bunches and low tonnage. Output then climbs steeply for several years, holds through the prime years and declines slowly after that. Old palms are tall, so harvesting is slower and more loose fruit is lost, and the stand thins as palms die. Replanting usually comes at about 25 years.

The government’s own yardstick is in its smallholder replanting programme. Under Agriculture Minister Regulation 5 of 2025, a plot qualifies for replanting if its palms are older than 25 years, if it yields 10 tonnes of fresh fruit bunches (tandan buah segar, TBS, or FFB) per hectare a year or less at seven years old or more, or if it was planted with non-superior seed. A block of seven years or more that sits near that figure is a replanting case by that measure.

Above that floor, yields vary too much for one figure to mean much. They depend on soil, rainfall, planting material, planting density and management. Compare an estate with blocks of the same age on similar soil in the same district, never with a figure from a brochure.

Age also changes the price of the fruit. Provincial fruit price lists usually give a separate price for each age band, because fruit from young palms carries less oil.

Oil extraction rate

The oil extraction rate is the weight of crude palm oil (CPO) a mill gets from the fruit, divided by the weight of fruit it processes. The kernel extraction rate works the same way for palm kernels. Both depend on the planting material, the age of the palms, how ripe the bunches were at harvest, how fast they reached the mill and how well the mill runs.

Planting material sets the ceiling. Commercial estates plant tenera palms, a cross whose fruit has a thin shell and more oil. Dura palms have a thick shell and less oil, so dura palms scattered through a tenera block point to poor seed. Indonesia’s fruit pricing rule builds the gap in. Where an independent grower’s fruit hasn’t been tested, Agriculture Minister Regulation 13 of 2024 prices dura fruit at an extraction rate of 81% of the provincial table rate for tenera. The same rule asks every partnership contract between a mill and its growers to record the share of tenera and dura palms and the results of extraction tests.

What pulls yields down

Most yield problems show up late, so last year’s figures can look fine while next year’s are already set.

• Poor seed can’t be fixed without replanting. Illegitimate seedlings carry a share of dura palms, and the replanting programme treats non-superior seed as a reason to replant on its own.
• A long dry spell, often linked to El Niño, cuts yields months later and can hold them down into the following year, because bunches start forming long before they’re harvested.
• Cutting fertiliser saves cash now and costs fruit in later years. That makes it an easy way to flatter the accounts before a sale.
• Ganoderma is a fungus that causes basal stem rot, a disease that kills palms and has no cure. It tends to be worse on replanted land, where it survives in old roots and stumps.
• Long harvest rounds, unripe bunches cut early, loose fruit left on the ground, broken roads and flooding all lose fruit the palms did produce.

Before you rely on a yield figure

A seller’s yield figure is a claim until the paperwork backs it. Ask for at least five years of monthly data, so one drought year or one good year doesn’t set your view, and check these records:

• A block map with the planting year and area of each block, matched against the map of the right to cultivate (Hak Guna Usaha, HGU) and what you see on the ground.
• Monthly harvest records by block: bunches cut, tonnes and average bunch weight.
• Weighbridge tickets and mill receipts for the same months, with the grading deductions. Their totals should match the harvest records and the payments received for fruit.
• A palm census by block, showing palms per hectare, gaps, dead palms and Ganoderma cases.
• Fertiliser purchases and application records, leaf analysis results and rainfall from the estate’s own gauges.
• Seed purchase records or certificates for every planting year.

An ISPO certificate states the productivity and total production of the unit it covers, a figure to compare with the seller’s records. The mill side, including grading and deductions, is in mill or no mill, and the wider purchase checklist is in buying an existing plantation.