KUALA LUMPUR, April 18 (Bernama) -- The Palm Oil Refiners Association of Malaysia (PORAM) is against a total liberalisation of the policy for the palm oil refineries in Sabah and Sarawak.

In a memorandum submitted to the Ministry of International Trade and Industry at the 2006 Dialogue Session yesterday, it said the problems of excess refining capacity have existed in the refining sector in Peninsular Malaysia since the eighties.

Having faced such a situation all these years, it does not want to see it repeated in Sabah and Sarawak.

It wants new manufacturing licences for palm oil refining in both states be considered for companies with plantations, where 50 percent of the crude palm oil (CPO) could be sourced from within the company or related companies.

PORAM also wants the Government to promote investments in the further downstream sector such as specialty fats, oleochemicals and biodiesel rather than in pure refining to avoid excess refining capacity.

"In order to boost the sector, we suggest that import duty of 5 percent on refined refined bleached deodorised palm stearin be abolished," it said.

For Peninsular Malaysia, PORAM wants the issuance of manufacturing licences for new refineries to remain frozen.

For existing companies, undertaking expansion could be approved subject to the recommendation from Ministry of Plantation Industries and Commodities.

-- BERNAMA