Kual a Lumpur, 17 September 2001 (Business Times) - AN AGREEMENT to extendRussia a US$50 million (US$1 = RM3.80) credit to buy about 200,000 tonnesof Malaysian palm oil has been put on hold.

The two countries were to have formalised the pact last week during avisit by Prime Minister Datuk Seri Dr Mahathir Mohamad to Russia.

But the trip was cancelled following the terrorist attacks on the US lastTuesday, an industry source said.

Dr Mahathir had planned to visit Russia on September 12-15 and GermanySeptember 18-20.

He was slated to sign the Palm Oil Credit Payment Arrangement (Pocpa) dealin Moscow with Russian Federation President Vladimir Putin.

"The signing of the pact will be rescheduled. . . but a new date has notbeen set," the source told Business Times.

Under Pocpa, which was introduced in 1992, credit is offered to long-termbuyers of Malaysian palm oil.

The countries, in particular those which face a shortage of foreignexchange, are normally granted a two-year credit line to buy the commodityfrom Malaysia.

A bilateral payments arrangement scheme, it promotes counter tradeinvolving the exchange of palm oil for a host of products, while expandingthe global market for the Malaysian commodity.

Of the US$500 million allocated for the scheme, Malaysia has so farextended US$227.4 million in credit to nine countries.

The recipients are Algeria, Sudan, Pakistan, Iraq, Iran, Myanmar,Bosnia-Herzegovina, Cuba and North Korea.

New deals in the works include those with Egypt, Bangladesh, Ukraine,Djibouti, Hungary, the Czech Republic, and various other countries inAfrica and South America.

Malaysia was exporting 350,000-400,000 tonnes of palm oil a year to theformer Soviet Union before its collapse, of which 80 per cent was consumedby Russia.

Since 1993, Russia has been buying 40,000-60,000 tonnes a year.