22/09/05 BANGI, (Bernama) -- The more expensive crude oil becomes, thedearer it will be for makers of downstream petroleum products but thisbrings good news to palm oil producers, says Malaysian Palm Oil Board(MPOB) director-general Tan Sri Dr Yusof Basiron.

Dearer crude oil translates into a positive impact for oleochemicals orchemicals derived from biological oils and fats, especially palm oil,which is competitively-priced, he said.

Dr Yusof also believed that the relatively high crude oil prices wouldencourage more producers of consumer products now using petrochemicals toswitch to oleochemicals.

"The palm oil-based oleochemical industry has been expanding very much inline with the output of crude palm oil (CPO) because oleochemicals areused to produce daily needs like soap, detergents, shampoos, cosmetics andmany more," he said in an interview here.

The prospects for palm-based oleochemicals are expected to be discussed indetail at the upcoming International Palm Oil Congress or PIPOC at theSunway Pyramid Convention Centre in Petaling Jaya from next Monday untilThursday.

Intensive research on palm oil has produced improved raw materials fordetergents known as Subordinated Methyl Esters (SMEs), which are cheaperbut have better quality than those made from petrochemicals.

"So you can imagine how much cheaper (oleochemicals can be) once thepetroleum price increase takes effect downstream. We are thereforepromoting the use of palm-based detergents, which are better andenvironmentally-friendly because they are a renewable resource," said DrYusof.

The outlook for the future is rather promising as only five percent of thetotal palm oil produced in Malaysia is used as oleochemical feedstocks.

Malaysia exported 1.8 million tonnes of oleochemicals last year, with theEuropean Union, the United States, Japan and China as the major markets.

"Currently, Malaysia has the capacity to produce about 20 percent of theworld production of oleochemicals," said Dr Yusof.

Due to the abundance of palm oil in Malaysia, he said MPOB's AdvancedOleochemical Technology Division would explore the use of palm oil invalue added oleochemicals products.

These products include biodiesel, methyl ester sulphonates (MES), polyolsand polyurethanes, biolubricants and dihydroxystearic acid (DHA) which areused in cosmetics and personal care products.

There are now 17 oleochemical factories in Malaysia producing 1.8 milliontonnes of oleochemicals annually like fatty acids, fatty esters and fattyalcohols.

There was an increase in consumption of palm oil by local oleochemicalplants last year and this also resulted in higher exports of oleochemicalproducts.

Dr Yusof believed that there would be increased consumption of palm kerneloil (PKO) by the oleochemicals industry.

At present, more than 60 percent of the PKO produced in Malaysia is usedas raw materials for oleochemical production.

In citing an example on the competitiveness and superiority of palm oil,he said the increase in crude oil pricers may encourage more candle makersto switch to palm oil.

It has also been found that candles made from palm oil are brighter, havea better burn, have less smoke and do not drip easily.

-- BERNAMA