17/12/2008 (Bernama), Kuala Lumpur - The country's production of crude palm oil for the year is expected to exceed 17 million tonnes, said the Minister of Plantation Industries and Commodities Datuk Peter Chin Fah Kui.

"Until October, the area planted with oil palm reached 4.45 million hectares while the production of crude palm oil increased 14.21 percent to 14.59 million tonnes," he said.

He said this in his speech at the Dinner and Presentation of the Malaysian Palm Oil Board (MPOB)Q Awards 2008 here Wednesday night.

Chin said that the improved average fresh fruit bunch (FFB) yield and oil extraction rate (OER) of palm oil had contributed to the increase in production.

The average FFB production increased by 8.19 percent to 16.65 tonnes while that for the OER was 0.01 percent to 20.17 percent.

Chin said the fall in the price of palm oil to an average RM1,500 per tonne in the third quarter of the year had affected the industry income,contribution to export earnings of the country as well as the income of the plantation sector and that of palm oil smallholders.

To strengthen the palm oil price and also enhance the competitiveness of the industry,he said the government was undertaking the Palm Oil Replanting Incentive Scheme and the use of a five percent mix of palm oil biodiesel(palm methyl esters) with petroleum diesel.

"The implementation of these two important strategies will strengthen the growth of the palm oil industry in the long term," he said.

The mandatory use of the fuel known as Envo Diesel Ester will be implemented in stages starting from February next year.

To take the industry to a higher level, Chin urged MPOB researchers to generate new innovations and products to enhance the use of palm oil.

"Encourage good practices at every level of the production network to produce quality palm oil which will enhance the image of the product and increase its competitive efficiency in the global market," he said.

"The palm oil will also give confidence to importing countries and primary users in the Europen market and in the United States, who are increasingly critical of agricultural products whch are not environment friendly," he highlighted.

Chin said that the pro-active approach of the Ministry and the MPOB as well as the participation of the industry was important in overcoming the problems faced.

"With the increase in the price of fertilisers, I would like to suggest to the MPOB that it enourages palm oil mills and the plantations to adopt technology to develop bio fertilisers from palm oil waste," he added.