29/10/2008 (NST Online) - The Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) today asked major crude palm oil producers — Indonesia, Malaysia and Thailand — to reduce their stock by one million to 1.5 million tonnes to stabilise prices in the global market.

“At the current price, we are running at cost. We are not making profit,” said its president Tan Sri William Cheng on the sidelines of a seminar themed

“Is Oil Palm Still The Glittering Star”. Palm oil prices are currently hovering at RM1,450 a tonne from the highest price of over RM4,000 a tonne early this year.

The cost of production is about RM1,300 per tonne.

Cheng said Indonesia, Malaysia and Thailand have a combined crude palm oil stock of about 6.5 million tonnes.

“By lowering the stock, I hope prices can stabilise at RM2,000 a tonne, at the least,” he said.

The amount of CPO stock available can be used for bio-diesel production, ACCCIM said.

As for reducing production cost, the chambers hoped fertilizer manufacturers could reduce the prices.

“They source raw materials from overseas where surcharges are generally about 60 percent to 70 percent. They pass on the cost to end-users to reduce their cost indirectly,” he added.

Cheng, however, said the slide in crude palm oil prices was “temporary” and that the palm oil industry would still have a bright future going forward.

“Malaysia’s cost of production is the world’s lowest compared to other countries. If we sell at cost, others will suffer the loss,” he added.

The chambers said the price drop could result in lower contribution to Malaysia’s total exports and gross domestic product (GDP).

Crude palm oil, crude oil and gas contributed about 15 percent to the countrys exports and nine percent to the GDP, it added.