KUALA LUMPUR, Oct 15 (Bernama) -- Malaysia, the biggest palm oil producerin the world, fears the increase in its crude palm oil stock will bedetrimental to the industry, said the primary industry minister Datuk SeriDr Lim Keng Yaik.

"It (CPO stock) has gone up to 1.2 million tonnes again. If you don'twatch it the stock will go up to 2 million tonnes by end of this year. Ifear to know the end stock," he said, This would cause the lowering of thethe CPO prices, he told reporters after officiating a "Seminar on PalmBiomass: Opportunities For Commercialisation", here Monday.

Earlier, the government took various measures to bring down the CPO stocksin July-August to about 750,000-800,000 tonnes.

But the present world situation does not augur well for the industry asstocks will likely be on the upswing. Already, with the current US attackin Afghanistan, Malaysia's export to West Asia and Pakistan had beeneffected and this was further compounded with higher output in recentmonths.

In order to put a check to increase in stockpile, he said some 2,500tonnes would be sent to the TNB plant in Prai to be burnt as fuel addingto the same amount sent earlier.

"Within the next six or eight months we will be able to burn 400,000tonnes of CPO," he added.

Apart from the government's effort to reduce the stockpile, he said theindustry players must also help themselves to reduce the stock.

He noted that the ministry was still in the midst of talk with theMinistry of Finance to bring the Medium Fuel Oil (MFO) and CPO prices atpar to encourage more people to use them.

Dr Lim also said the industry players especially the smallholders shouldcheck their cost of production. Currently the cost of production per tonnevaries between RM550 and RM900.

He cited replanting as another factor that can reduce the stock. Thegovernment targeted to replant about 200,000 hectares by year-end andoffered incentives for the industry players.

So far, only 136,000 hectares had been replanted, he added.

-- BERNAMA