Malaysia to encourage replanting to reduce CPO stocks, boost price

Downtrend: Palm oil is among the commodities that have been affected by global economic uncertainties.

KUALA LUMPUR: Malaysia will encourage the replanting of oil palm trees in an effort to reduce crude palm oil (CPO) stock and boost the commodity's price, which has hit a low of RM1,836.50 per tonne recently.

Palm oil is among the commodities that had been affected by the global economic uncertainties with the prices spiralling downwards as compared with in 2014 where they were trading between RM1,944 and RM2,921 per tonne.

Higher production, coupled with lower demand, had pushed the stock in July to 2.27 million tonnes, he said.

"The current decline in palm oil prices has impacted the economy of palm oil exporting countries. Like Malaysia, Indonesia is also equally concerned about this downward price trend," said Plantation Industries and Commodities Minister, Datuk Amar Douglas Uggah Embas, here.

In an effort to tackle the issue, the minister said, the ministry was working out strategies to manage plam oil stock.

He said this included providing incentives for replanting of old oil palm trees to manage Malaysian palm oil stock, which would commence from this October.

"Malaysia, which is the world's second largest palm oil producer after Indonesia, will also work with the latter on price stabilisation strategy," he said at the 2015 Palm Oil Industry Leadership Award dinner.

According to the minister, these were among the things that were discussed at the ministerial-level bilateral meeting on Aug 27, 2015. "Both countries agreed to enhance cooperation and collaboration in the palm oil industry. Among the focus of discussion were price stabilisation strategy and the implementation of the Biodiesel Programme whereby Indonesia is currently implementing the B15 and Malaysia is moving from B7 to B10," he said. — Bernama