16 October 2001 (business Times)

MALAYSIA has expressed concerned over the swelling palm oil stocksoverhang that could hit 2 million tonnes unless serious support isattained from the commodity’s producers.Towards this end, the Government’s oil palm replantation initiative hasnot achieved the desired response as the targeted audience, namely thesmallholders, is not giving the expected support.Primary Industries Minister Datuk Seri Dr Lim Keng Yaik said to date, thesmallholders have yet to actively pursue replanting efforts despite beingrequested do so since last March.“Out of the total 185,000ha in registrations received by the Government bythose who indicated the desire to replant, a mere 136ha, to date, hasactually been replanted. They are not serious in helping the Government toimprove the sector which may see high stocks by year-end.“I worry that national stockpile may touch 2 million tonnes by year-endbecause stocks have already reached 1.2 million tonnes in August comparedwith 800,000 tonnes in July,” Dr Lim told reporters after officiating at aseminar on biomass commercialisation potential in Kuala Lumpur yesterdayThe Government had in March introduced a replanting scheme to both rubberand palm oil smallholders as part of its efforts to assist smallholders ofboth sectors which had faced hardships due to low prices.

Under the scheme, the Government has made available a fund of RM200million to farmers which replant of which RM1,000 per ha will be for palmoil and RM1,100 per ha for rubber.The scheme has earmarked 200,000ha to be replanted and is aimed atremoving 600,000 tonnes of palm oil from the market by end of 2002. It wassupposed to end on June 30, but had been extended until year-eand due totremendous response from some 4,000 smallholders.Handled by the Malaysian Palm Oil Board, farmers will only be paid theincentive once replanting efforts are completed and not for registeringalone.Dr Lim said the main reason of why smallholders are slow in replanting isthat they are hoping prices will go even higher.“They must replant because the high production months are still ahead andto have 400,000ha of oil palm trees above 25 years old still growing isnot a good agricultural practice.Meanwhile, Dr Lim urged palm oil players to fully exploit its biomasssector which can be a bigger income earner compared with palm oil and palmkernel oil products generating an income of between RM2 billion to RM4billion in its initial stages yearly.Biomass is simply the utilisation of renewable energy sources to generatepower such as electricity. Biomass include agricultural waste such as oilpalm planting waste, forestry wood waste, cuttings and grass, waste fromsaw mills, wind and solar.