KUALA LUMPUR, July 19 (Bernama) -- The potential for more Malaysian palmoil to penetrate Ukraine and its neighbouring areas including theCommonwealth of Independent States (CIS) countries can be further enhancedif exported via the Ukrainian port city of Odessa.

The Black Sea port has immense potential to be a distribution centre forMalaysian palm oil, Primary Industries Minister Datuk Seri Dr Lim KengYaik, said Saturday.

Dr Lim said that the Black Sea port, which lies in the south of theUkranian capital, Kiev, could be used not only as a distribution point forUkraine, but also for other neighbouring countries and CIS countries, manyof whom were landlocked countries.

Ukraine, situated in the south-eastern part of Central Europe, is thebiggest eastern European country after Russia covering over 600,000 squarekilometres.

It borders the Black Sea, Belarus, Hungary, Moldova, Poland, Romania,Russia and Slovekia.

Dr Lim said the port could be developed to handle the imports of some400,000 tonnes to 500,000 toness of palm oil in future.

Currently, Ukraine, which lies in a strategic position at the crossroadsof Europe and Asia, imports about 100,000 tonnes of palm oil.

"I think the potential is great. We can use the Odessa port as adistribution point," Dr Lim, who is also Gerakan President, said afterlaunching the SATU Academy at the party headquarters in Menara PGRM heretoday.

Dr Lim accompanied Prime Minister Datuk Seri Dr Mahathir Mohamad duringhis visit to the former Soviet republic from July 13-16.

Dr Lim said Dr Mahathir had the opportunity to tour and have a close lookat Odessa port while there and also visited palm oil storage facilities.

"I think Odessa port is a very strategic port, a big and deepwater port.(It) can take in bigger ships," he said.

Dr Lim said that in the past, Malaysia was thinking of getting a suitableplace as a palm oil distribution centre to CIS and neighbouring countries,and Bandar Abbas in Iran and Istanbul of Turkey was among the places whichwere considered.

He said Malaysia had offered US$10 million (RM38 million) in palm oilcredit payment arrangement (POCPA) to Ukraine importers and this wouldincrease Malaysian palm oil imports by Ukraine.

Replying to a question, Dr Lim said Kazahkztan were also given US$10million (RM38 million) under POCPA.

"For others, (CIS countries), we will consider it on a case by casebasis," he said.

Diplomatic relations were established between Kuala Lumpur and Kiev inMarch 1991.

The volume of trade between the two countries last year was only US$83.1million (RM315 million).

-- BERNAMA