Sunday July 27, 2008

Huge drop in palm oil prices

By STEPHEN THEN

MIRI: The Government will take urgent measures to counter the drop of international crude palm oil prices.

Plantation Industries and Commodities Minister Datuk Peter Chin Fah Kui said steps would be taken to ensure the decline in prices do not become a long-term trend.

Chin said the Government would lower the current stock of crude palm oil in Malaysia by exporting crude palm oil to countries like India, Pakistan, China and the Middle East instead of exporting refined palm oil and increasing export for the coming winter months to western countries where it could be used as bio-fuel.

Other measures include increasing usage of crude palm oil for bio-fuel production in Malaysia, encouraging local power producers to use crude palm oil as raw material to produce energy and having more industries and factories use crude palm oil instead of diesel as their feedstock fuel.

“The ministry expects palm oil to contribute up to RM60bil in revenue to the country’s coffers this year, but the substantial drop in the global price may upset this target. We are worried this may be the start of further decline in the price of palm oil and will take counter measures to maintain a good price,” he told a press conference here yesterday.

The past week has seen the price of the commodity tumble from more than RM3,500 per tonne to RM3,095 per tonne.

The price earlier this year was up to RM4,000 per tonne.