The growing concerns about non-biodegradable synthetic polymers in domestic usage have developed the urge to create sustainable alternatives using degradable polymers. Poly(3-hydroxybutyrate-co-3-hydroxyvalerate) (PHBV) provides the alternative for the non-degradable polymer due to their promising barrier properties and biodegradability, however its inherent brittleness and narrow processing window limit its application. PALF was used as reinforcement fibre to address these constraints, exploiting its excellent mechanical strength and abundance in Malaysia as agricultural waste. This research focused on improving the composite’s mechanical strength, ductility, and crystallinity by optimising the PALF loading in the PHBV matrix. The composite was fabricated through solvent casting and hot compression moulding at 175 °C to produced composite containing 10–40 wt% PALF. The performance of the composite was evaluated through tensile testing (ASTM D3039), scanning electron microscopy (SEM), and X-ray diffraction (XRD). The highest tensile strength and modulus of elasticity of the composite were obtained  at 30 wt. % PALF are 46.71 MPa and 10.36 GPa, respectively. The biopolymer composites exhibited higher performance properties than neat PHBV, highlighting their potential as a sustainable packaging material.