IPOH, June 14 (Bernama) -- Malaysia has positioned itself as the world'slargest producer and exporter of palm oil last year, with revenuesamounting to RM27.7 billion but it is facing stiff competition fromIndonesia.

Plantation Enterprises and Commodities Minister, Datuk Peter Chin saidthat Malaysia produced 13.4 million tonnes of crude palm oil and of this,12.25 million tonnes were exported.

Chin said Indonesia had managed to increase its production within a fewyears and had taken an aggressive stance in its export market promotion byabolishing export duties and offering comparatively lower prices.

"As such, the country has effectively penetrated Malaysia's majorinternational markets for palm oil like India and Pakistan," he said whenofficiating the National Seminar "Plant or Perish" organised by theIncorporated Society of Planters here Monday.

Furthermore, he said increasing cultivation of oil palm was taking placein many parts of the world, among them in Papua New Guinea, thePhilippines, India, Africa and South America where soil and climaticconditions have proven to be suitable.

Chin said with current high price of palm oil hovering around RM1,600 toRM1,800 per tonne, plantation companies and smallholders should embark onreplanting of unproductive oil palm trees.

"Carrying out replanting exercise when commodity prices are high will beless burdensome to you because the extra income generated from higherprices will help you to sustain while the replanted areas are still undergestation period," he added.

Chin said of the 3.8 million hectares under oil palm, 3.4 million hectareswere matured areas accounting for the 13.4 million tonnes of crude palmoil that was produced in 2003.

He said if the present trend of growth continued over the next few yearsand prices remained at profitable levels, the area under oil palm mightcontinue to grow and reach four million and production levels go up toaround 14 or 15 million tonnes of oil by 2006.

Chin said at the moment there were 326,600 hectares of oil palm landnationwide due to be replanted.

Over the last three years, approximately 60,000 hectares of old oil palmareas have been replanted annually, he said, adding that about half ofagricultural land in Malaysia were under oil palm.

-- BERNAMA