Friday October 1, 2004 - THE Ministry of Plantation Industries andCommodities has granted approval for additional duty-free crude palm oil(CPO) exports, given the higher-than-expected level of CPO stocks lastmonth and in the face of intense competition from Indonesia.Our concept of duty-free CPO exports is simple, said its minister, DatukPeter Chin Fah Kui.

Malaysia would only agree to go beyond the stipulated 10% duty-free CPOexport allowance if there are excess stocks which local refineries cannottake up.

Only then would we allow companies that have the capability and contractsto export the excess stocks free of duty, he told reporters after openingthe Oils and Fats International Congress 2004 organised by the MalaysianPalm Oil Scientists and Technologists Association (Mosta) in Kuala Lumpuryesterday.

Asked whether Malaysia, the world's largest palm oil producer, would raisethe percentage of duty-free CPO exports beyond 10% of total output nextyear, Chin said: All will depend on the supply and demand situation,especially with two new refineries coming onstream in East Malaysia, andwhether there is a need to cater for Malaysian companies setting uprefineries abroad.

Private forecaster Ivon Wong had estimated CPO stocks at 1.4 milliontonnes for last month compared with 1.32 million tonnes a month earlier.

But it looks like September production was better than expected, andnaturally it may be reflected in the CPO prices, Chin said.

He added that that his ministry would continue to ensure price stabilityfor CPO, whether it is traded at RM1,300, RM1,400 or RM1,500 per tonne.

Apart from the focus on CPO, Chin said he would also like to see a furtherpush by the local oleochemicals industry to produce more value-added,high-end consumer products like personal care items, cosmetics andpharmaceuticals.

On the export front, Chin said China had overtaken India as Malaysia's toppalm oil export market, while the European Union was fast catching up withIndia as well.

For next year, palm oil exports to China are expected to hit three milliontonnes compared with this year's estimated 2.6 million tonnes.

We hope to export even more to China from 2006 onwards following theabolishment of China's import quota system in compliance with World TradeOrganisation terms, Chin said.