18/01/2009 (iStockAnalyst) - MALAYSIA, in efforts to reduce its fertiliser import bill, will barter US$70 million (RM250.6 million) worth of palm oil for fertiliser with North Korea and Russia.

Last year, without much leverage from barter arrangement, oil palm planters paid more than RM6 billion to fertiliser importers for an estimated 3.5 million tonnes at market pricing.

Plantation Industries and Commodities Minister Datuk Peter Chin Fah Kui said his ministry and Bank Negara, last month, approved US$20 million (RM71.6 million) credit with North Korea for palm oil orders until end-2010.

"In the last nine years, we've bartered US$60 million (RM215 million) worth of palm oil for fertiliser with North Korea. We've approved another US$20 million for another two years," he told reporters after meeting with the Malaysian Estate Owners' Association (MEOA) in Putrajaya over the weekend.

"Russia is a bigger fertiliser producer. We're bartering US$50 million (RM179 million) of palm oil for potash this year," he said.

Bartering of palm oil for fertiliser could facilitate more competitive pricing in fertiliser components. The aim is to get better pricing from smaller suppliers. The giant crop nutrients suppliers are in Canada, Norway and Chile, Chin said.