SHAH ALAM, June 17 (Bernama) -- Palm oil producers have been urged to gofor large scale, lower cost productions to take advantage of the high palmoil price currently.In making this call, Primary Industries Minister, Datuk Seri Lim KengYaik, said that Crude Palm Oil (CPO) price had risen steadily to RM1,450per tonne from RM700 per tonne a year ago.

Dr Lim said that the ministry had set a target for palm oil producers toproduce eight tonnes per hectare by producing 35 tonnes fresh fruitbunches (FFB) per year per hectare with an oil extraction rate (OER) of 25percent.

The national industry average has been around four tonnes per hectare peryear with a production of 20 tonnes FFB with an OER of 30 percent.

As for the cost of production, the industry average of RM900 per tonneshould be reduced to RM500 per tonne, the minister told newsmen after theopening ceremony of an oleochemical plant, Esterol Sdn Bhd, here today.

The Malaysian Palm Oil Board should also look at enabling smallholders toincrease their production, he said.

Their production level currently stands at two tonnes per hectare whilethey make up fifty percent of palm oil producers in the country, he said.

Dr Lim also advised palm oil producers not to become complacent with thecurrent higher prices but to take the necessary steps to keep productioncost at its lowest possible.

He said better productivity and lower production cost could be achievedwith planters shifting to available new clones and planting techniques.

He said he would be also asking the Malaysian Palm Oil Board to look intothe smallholders who are not performing well and to try and assist themtowards competitive production.

The marginal size of land given to the smallholders should not be of aconcern, Dr Lim said.

The land could become productive if there is proper fertilising and betterirrigation in place, he said.

Earlier, he said in his speech that there were 16 oleochemical plants inoperation with a total capacity of 1.57 million tonnes.

Lim said that the 16 companies in operation had a total investment ofRM1.78 billion. Out of the 16, 12 companies have more than 50percentforeign participation.

-- BERNAMA