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Malaysia and Indonesia to Use Palm Oil Surplus for Biodiesel
MALAYSIA - Malaysia and Indonesia are to use the surplus from their palm oil stockpiles to produce biodiesel in a bid to increase the palm oil price.Plantation Industries and Commodities Minister Datuk Peter Chin Fah Kui and Indonesia's Agriculture Minister Dr Anton Apriyantono told the Bernama news agency that both countries would continue to use the surplus oil for biodiesel until the edible oil commodity reached a price equilibrium in the world market.
Both ministers told a news conference that the decision was appropriate as the price of crude palm oil (CPO) at the moment was around US$871 per tonne, the lowest in 15 months.
"We have palm oil stocks which are fetching unreasonably low price in the world market. So we want to increase its usage to produce biodiesel for the local market.
"This is only logical. If the price is low, then we might as well use the commodity ourselves," Chin said.
Bernama said that Chin, who described the low price as worrying, said Malaysia had 1.9 million tonnes of surplus, and an equal amount in Indonesia, which would be used for the purpose.
"The palm oil will be use to produce biodiesel if the market is not willing to pay a reasonable price for our CPO," he said.
The amount was over and above the six million tonnes of palm oil which both countries had agreed to set aside for biofuel production.
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