Thursday, October 30, 2008

RM200 Million Govt Allocation For Oil Palm Replanting

October 30, 2008 22:01 PM

KUALA LUMPUR, Oct 30 (Bernama) -- Prime Minister Datuk Seri Abdullah Ahmad Badawi on Thursday announced an allocation of RM200 million for replanting 200,000 hectares of oil palm nationwide, saying the time when the price of palm oil was low was good to replace low-yielding, old palms.

He said the replanting would give rural smallholders the opportunity to maintain their yield and step up downstream industries.

"The rise in supply of palm oil will result in an increase in the downstream industries. This is important as the government regards the oil palm industry as strategic because the product is a national resource and the sector provides many job opportunities," he told reporters after chairing a meeting of the Cabinet committee on the Competitiveness of the Oil Palm Sector, at Parliament House here.

"Palm oil is used not only to produce foodstuff but also in making cosmetics and medical-related items and may be used as fuel to meet our needs," he said.

Abdullah said replanting could not be introduced earlier as the high price of palm oil was prohibitive for such an exercise.

Today's meeting also decided on the use of biofuel -- comprising five per cent methyl ester (palm oil) and diesel -- for government vehicles from February 2009, he said.

The implementation, in stages, would be followed by the industrial sector and the transport sector after that, he said.

Asked whether biofuel would be implemented for public vehicles, Abdullah said it could be done once the government had developed the infrastructure for the purpose nationwide.

It is estimated that the production of biofuel with five per cent palm oil would require 500,000 tonnes of palm oil annually when fully implemented in early 2010, he said.

"This does not pose a problem as we have large reserves of palm oil. We produce 17.8 million tonnes of palm oil. As such, it is not difficult to use 500,000 tonnes of palm oil annually to produce biofuel and it will not hamper other ongoing activities such as production of food, medicines, food supplements, cosmetics and other uses," he said.

Asked how the replanting exercise could boost the global price of palm oil, Abdullah said the government was trying to sustain the local production of palm oil in the future and produce high quality palm oil.

"A lot of palm oil trees must be chopped down, thus it cannot be sustainable. When the price is low, then the decision to begin replanting would be a good decision," he said.



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