KUALA LUMPUR, Oct 5 (Bernama) - Malaysia must intensify efforts to raisepalm oil exports and boost competition amidst rising stocks andcompetition from other edible oils, Primary Industries Minister Datuk SeriDr Lim Keng Yaik said here Friday.

He said that Malaysia should also diversify its markets rather than dependon only a few major markets to avoid any negative impact should there beany significant shortfall in one of those markets.

"India remains the single largest market followed by European Union (EU),China, Pakistan and Egypt. Total accumulated palm oil exports for thesefive countries accounted for about 61.5 percent of Malaysia's total palmoil exports," Dr Lim said at the Palm Oil Refiners Association of Malaysia(PORAM) anniversary dinner.

He said that the increase of import duty by one country, such as thatimposed by India currently, could to some extent affect exportperformance.

Other implications, such as disruption of exports due to potentialoutbreak of war could also adversely affect exports, he said.

He pointed out that the situation in Pakistan is of major concern. Basedon recent development, he said this year's production is forecast to bearound 11.2 million tonnes, an increase of about 0.4 million tonnescompared to last year.

"With replanting scheme going on and the land planted with higher yieldingclones, we can expect higher oil productivity three years from now and wemay face another oil glut again," Lim said.

However, he noted that Malaysia recorded impressive export performance forthe first eight months of the year.

Palm oil stock as at the end of August this year dropped to 878,300 tonnesfrom 921,700 tonnes as at the end of July.

This was a very big reduction from the stock level at end January 2001 of1.52 million tonnes. This could be attributed to good export performance,he said.

He also said that the much anticipated admission of China into the WorldTrade Organisation (WTO) is expected to witness some credible increase inpalm oil exports.

He said that China, which is likely to make its admission into the WTO inNovember, will phase out import quotas on palm oil after five years of hermembership.

He also said that in view of growing competition from other oils, issuessuch as efficiency in plantation management, effectiveness in marketing,improving and developing new products need to be look at seriously tosustain the viability of the palm oil industry.

One way is to use palm oil to produce methyl esters, carotenes and VitaminE. Methyl esters can be used for diesel substitutes and oleochemicalfeedstock.

Lim said that palm oil is also a good source of renewable energy if theworld experiences shortage of energy one day due to depleting fossil fuel.

"Malaysian Palm Oil Board (MPOB) and Petronas are now undertaking adetailed feasibility study on the viability of the project," he said. --BERNAMA