This article proposes an industry-level approach towards improving the competitiveness of the palm oil industry with reference to the fresh fruit bunch (FFB) milling sector. The approach can be described as a cross-sectional inter-firm cost variance analysis, which evaluates the cost performance of a firm by comparing its costs with the average or standard in the industry. The approach also analyses the structure and policy environment of the industry, and their effect on costs, as a means of identifying and instituting policies and policy instruments that would improve the structure and competitive base of the industry.

Keywords: industry structure, palm oil milling, public policy, standard cost format, variance analysis