The Unsung Connector: A Malaysian Oil Palm Dealer’s Story
Spanning three generations, this Johor dealer bridges smallholders and mills through trust, top-notch service, and global market access – the integral link in Malaysia’s palm oil value chain.
"When choosing a dealer, trust, integrity, and good service matter most. That’s why I have stayed with Eng Lee Heng for over 20 years,” says MSPO-certified independent smallholder Lee Ee Bin, smiling. The 68-year-old oil palm farmer is referring to Eng Lee Heng (ELH) Trading, a fresh fruit bunch (FFB) trader based in Kluang district, in the southern state of Johor in Peninsular Malaysia.
We are chatting in ELH’s office, housed within a central depot equipped with covered bays, ramps, and a weighbridge for grading and weighing fruit bunches. The depot buzzes with activity as trucks roll in and offload fruit bunches, whilst workers steer forklifts and mini excavators and scoop up fruit bunches.
A family-run business, ELH exemplifies the indispensable FFB dealer in Malaysia’s oil palm supply chain. Founded as a rubber trading outfit in the 1980s, the company expanded to oil palm in 1995. Today, ELH is led by third-generation owner Eng Poh Wuu.
The Vital Connector
As intermediaries, dealers like ELH bridge the gap between independent smallholders and mills. They buy only MSPO- and RSPO-certified FFB from multiple small-scale farmers and deliver a consistent, quality supply to mills.
For smallholders in remote areas with poor road conditions or without transport, dealers are a godsend. They handle logistics and ensure FFB reaches the mill within 24 hours of harvest to preserve quality. Dealers generate profits by price margin, transport fees (farm to depot, ramp to mill), and service fees (use of the weighbridge).
In Malaysia, there are 3,569 FFB dealers registered and licensed under the Malaysian Palm Oil Board (MPOB), with nearly a third located in Johor (Dec 2023 figures, DOSM Interim Agriculture Census 2024 – Oil Palm). To stay competitive, dealers sell fertilizers and pesticides, extend credit, rent out lorries, and provide farm workers.
“ELH is your ultimate one-stop centre. Anything you need, they can provide!” adds Lee, who has known the Eng family since his grandfather’s time. “Even if you order just one or two bags of fertilizer, the boss himself will deliver if his workers are busy. More importantly, they always stress transparency and fair pricing.”
Built on Trust
ELH prides itself on these core values, giving them an edge over their competitors. Dealers in Malaysia have been branded as ‘power brokers’ who undermine smallholders’ bargaining power. A study on legal reforms for oil palm smallholders reveals that “the lack of direct market access forces smallholders to rely on dealers, creating vulnerability to price manipulation and unfair trade practices.”
Research on FFB dealers also highlights how unfair practices reduce smallholder incomes, and how transparent dealer-farmer partnerships are critical for equity and competitiveness of the sector.
“Since my grandfather founded the business, building trust and delivering first-rate service form the bedrock of our company,” says Eng, 43. Today, ELH has nearly 300 farmer suppliers, and 90% of them are over 50 years old. “Our customer ties span two to three generations. Mr Lee’s (Ee Bin) father was my grandfather’s supplier.”
As seasoned farmers, Eng’s extended family owns 140 hectares of oil palm plots; the ELH owners are attuned to farmers’ needs.
“Say you’re a smallholder and own a three-acre farm, it’s challenging to find farm workers and buy fertilizer at a good price,” Eng explains. By bulk-purchasing inputs at wholesale prices, they pass on fair prices to farmers. The company has 60 full-time workers, earning decent living wages, with supervisors making an average of MYR 3,000 a month.
What the Farmers Say
For ‘absentee farmers’ like Tam Hon Keong, ELH’s one-stop shop is a blessing.
Tam owns an oil palm plot in Kluang but is based in Malacca. Once a month, he travels over 150km to check on his farm. He relies fully on ELH’s labour and services: from weeding and applying fertilizer to harvesting and selling FFB to the mill.
“Of course, I did my homework. I compared dealers on price, service, and weighbridge accuracy. ELH beats their competitors hands down,” says Tam, 58. He has encountered unscrupulous dealers who tamper with their weighbridge to lowball farmers. Even his dealer in Malacca, where Tam also owns oil palm and durian farms, doesn't measure up to ELH.
“It helps that my Kluang-based uncle has been their supplier (rubber) since the 1980s. Their reputation precedes them.”
If the need arises, ELH extends upfront replanting costs to long-time customers. “These loans are interest-free with no payment deadline. Again, it’s based on trust,” adds Eng. “There’s always a risk of default, but it’s rare among our farmer suppliers. It comes down to mutual respect and keeping one’s word.”
Dealers like ELH brave multiple risks, from FFB price and market volatility to fluctuations of FFB supply and quality, while rising costs – wages, fuel, and maintenance – do squeeze margins.
A study on oil palm dealers’ business risks reveals that dealers need to be more proactive at risk management because they are highly exposed to industry uncertainties. For Eng, the answer is mutual dependence (between dealers and smallholders).
“We take calculated risks, but prioritizing the interests of our suppliers helps mitigate those risks,” says Eng. For example, ELH sources top-quality chemical and organic fertilizers from trusted producers, as well as premium-quality seedlings from reputable plantations. This ensures farmers achieve consistent, high-quality yields.
“They are also generous with their farming knowledge and advice,” says independent smallholder Lee Yen Bin, an ELH supplier for a decade now. Lee’s family owns rubber and palm holdings in Kluang, and his father is a long-time ELH customer dating back to the 80s.
“Not only are they principled dealers, but they are also committed to public welfare and giving back to the community,” he adds. “When we need to repair roads or the bridge connecting our farms, ELH will chip in for construction costs.”
The Enabler and Gatekeeper
In 2018, ELH was introduced to Wild Asia by Kluang-based Sindora Mill, owned by Johor Plantations Group Berhad. Under a Wild Asia-dealer-mill partnership model, ELH works with Wild Asia Group Scheme (WAGS) to provide technical support to farmers to help them achieve the RSPO (Roundtable Sustainable Palm Oil) certification, and channel the certified FFB to their mill partner.
“We encourage our farmers to pursue certification not only because they will receive premiums for certified FFBs, but also because it helps improve their farm management, reduce production costs, and boost yields,” says Eng.
In 2020, ELH became Johor’s first dealer in Johor to lead 108 independent smallholders to become RSPO-certified.To date, 90% of its nearly 300 farmers are certified, unlocking premiums and global market access for smallholders.
This partnership demonstrates how dealers like ELH can be enablers who bring more smallholders into the certified supply chain. They also serve as gatekeepers by facilitating traceability through the flow of certified crops and data from farmer to mill. And Wild Asia ensures this innovative model is credible and scalable.
Traceability with Digital Technology
In November 2023, the MPOB rolled out the Sawit Intelligent Management System (SIMS), a digital, web-based platform designed to digitise, monitor, and trace every transaction across Malaysia’s palm oil supply chain. From FFB suppliers and dealers to mills, processors, and exporters, SIMS enables seamless end-to-end traceability, ensuring compliance, transparency, and data-driven decision-making.
Through SIMS, smallholders can record details such as FFB sale prices, weights, grades, and dealer information, which empower them to make informed decisions. FFB dealers, in turn, can log purchase and sales data, promoting transparency and accountability within the value chain. The platform also helps licensees (farmers, dealers, and mills) comply with MPOB’s licensing, reporting, and enforcement requirements via digital automation.
From July 2024 onwards, the use of SIMS is mandatory for all stakeholders in the Malaysian palm oil supply chain.
According to a report by MIDF Research (Amanah Investment Bank Berhad), by the end of 2024, around 87% of FFB dealers had registered with SIMS, but only 60% were using it consistently.
As one of the early adopters, ELH recognises SIMS’s potential but also the challenges that come with digital transition. Among the hurdles are time constraints: the need to update data frequently even during busy periods, and a less user-friendly interface that can be technically demanding. The occasional system bugs and disruptions also affect data entry and storage. For their farmer suppliers, the barriers are unstable internet connectivity in rural areas and limited digital literacy, especially among older farmers.
“The system is good for streamlining our records and managing data more efficiently,” says Eng. “But we’re still learning and adapting.”
"We want to keep supporting and encouraging more farmers
to meet national and global sustainability standards.”
Looking ahead
Come January 2026, all dealers in Malaysia must obtain the MSPO certification to renew their MPOB licenses. Under the updated MSPO 2.0 standards, every dealer must comply with the principles outlined in MSPO Part 4-3, which cover traceability documentation and adherence to legal, social, and environmental requirements. The certification ensures that dealers are fully committed to sustainable practices and transparent supply chains.
As part of the upgrade, MSPO introduced the e-MSPO platform, a centralized digital system that manages the entire certification process, from application and audits to approval and renewal. Traceability is the key feature of the system, which connects every stage of the oil palm supply chain, from crop production and processing to exporting. By ensuring end-to-end visibility, e-MSPO enhances transparency and accountability, helping Malaysia’s palm oil industry meet global sustainability benchmarks such as the EU Deforestation Regulation (EUDR).
Some dealers have raised concerns about meeting the certification deadline, citing challenges such as tracing FFB purchased from smallholders who often lack consistent records - a process that can be time-consuming and resource-intensive. In addition, the financial and administrative costs of certification, audits, and documentation can be prohibitive for smaller dealers.
However, dealers like ELH, who have already undergone the RSPO certification process with their smallholder group, are better equipped to meet the MSPO requirements. Their prior experience with RSPO’s rigorous standards, documentation, and audit processes gives them a head start in knowing what is needed for compliance.
Building on this foundation, ELH has already begun preparations for the MSPO certification process.
“The key is to lead by example,” says Eng. “We want to keep supporting and encouraging more farmers to meet national and global sustainability standards.”
For ELH, being a dealer is more than just moving harvests – it’s connecting people, ensuring palm oil nourishes families, and building trust across the supply chain.
Three generations on, ELH’s story demonstrates how trust, integrity, and dependable service can turn a dealer from a mere trader into the unsung connector of Malaysia’s palm oil value chain.
