Wednesday January 12, 2005 - MALAYSIA is keen to seek Indonesia’sco-operation to stabilise the price of crude palm oil in the world marketby managing the supply of the commodity together since both countriesaccount for 85% of the world's production.

Plantation Industries and Commodities Minister Datuk Peter Chin said noone could predict the price of palm oil as it was volatile.

He said the price of crude palm oil was close to RM2,000 per tonne inApril last year but was now down to RM1,365.

"We need to stabilise the price in the long run especially for smallholders and one of the methods would be supply management," he said.

Chin proposed to implement a procedure to channel the excess palm oil inthe market for fuel consumption.

"The ministry and Malaysia Palm Oil Board can allocate a certainpercentage of the excessive palm oil to use as fuel by blending it withdiesel," he told reporters after opening a two-day national convention ofsmallholders yesterday.

"We can work out a way to ensure the amount of crude palm oil in themarket is just enough and use the balance of the production for fuel," hesaid.

In this way, Chin said price of crude palm oil would be stabilised withconstant supply.

Chin said the ministry would have to convince the Economic Planning Unitand the Treasury that good things would result from this implementation.

Malaysia had yet to blend palm oil into diesel like what some Europeancountries had done, he said.