26/6/06 KUALA LUMPUR, Malaysia (AP) -- The Malaysian government urged oil palm plantation companies Monday to plant rubber trees to capitalize on soaring rubber prices, which are currently trading at a 20-year high.
 
Malaysia is the world's biggest palm oil producer. In 2005, 4 million hectares (9.8 million acres) of farmland were planted with oil palm trees, and palm oil output reached 15 million tons.

However, Plantation Industries and Commodities Minister Peter Chin noted that "the rubber industry is making a comeback" following a prolonged slump in prices.

"My advice is that we should now look at rubber seriously. Our planters should go back to rubber," Chin told reporters on the sidelines of an international plantations conference.

Rubber was once Malaysia's main agriculture commodity, but many plantations have switched to the more lucrative palm oil over the past two decades.

Malaysia had 1.25 million hectares (3 million acres) of land planted with rubber trees last year, with output at 1.13 million tons.

The country's export earnings from palm oil and its related products totaled 28.6 billion ringgit (US$7.8 billion; euro6.2 billion) in 2005, while export earnings from rubber and its related products were at 12.56 billion ringgit (US$3.4 billion; euro2.7 billion).

Malaysia's tire-grade SMR20 rubber is currently trading at more than 8 ringgit (US$2.20; euro1.75) per kilogram locally, its highest in 20 years.

Most palm oil is used in food products, such as margarine, cooking oil and as a substitute for cocoa butter. It also has industrial uses, including as a diesel fuel substitute and a component in soaps and detergents, candles, cosmetics, plastics and lubricants.