Kuala Lumpur (Reuters) 6/8/2001- Officials said they are stepping upefforts to find ways to boost usage and prevent a further slide in prices.Yet the government will maintain its forecast for 2001 at 11.2 milliontonnes. Malaysia�s palm oil output is expected to hit yet another recordhigh this year, worrying producers, as well as the government- which isalready struggling to deal with an oversupplied market.Officials said yesterday they are stepping up efforts to find creative wayto boost usage and prevent a further slide in prices.Palm oil prices are set to be lower on average than in 2000, as a resultof rising output and high global inventories, Mr. Chandran, ChiefExecutive of Malaysian Palm Oil Association said. "We have good cropscoming in from all the regions," he said. "We may have to revise theproduction forecast upwards this year."Malaysia is the world�s largest producer of palm oil, used mainly in foodand soap production. Output this year could easily reach between 11.5million and 11.7 million tonnes, up from 10.84 million tonnes in 2000,Chandran said. A senior official at the association said the governmentwill continue to maintain its forecast at 11.2 million tonnes this year.Private traders, meanwhile, say production will hit 12 million tonnes.The association expects crude palm oil prices to average between RM 760 atonne and RM 780 a tonne this year, down from an average of RM 993 a tonnein 2000. Chandran said the price outlook is grim because of a glut in theglobal vegetable oils market. In Malaysia alone, with last year�s carryover stock of 1.42 million tonnes, the palm oil industry is faced with thetask of finding buyers for over 13 million tonnes of palm oil this year.Indonesia�s production is also expected to be higher this year, touchingat least 7 million tonnes, up from 6.5 million tonnes last year.Despite early setbacks, the government and industry will continue withtheir efforts to find alternative uses for palm oil. After unsuccessfullytrying to use crude palm oil as fuel in Tenaga Nasional Bhd�s powerplants, the Primary Industries Ministry is now trying to encourage smallgeneration units to use a mix of refined palm olein and diesel as fuel.The government has scheduled a meeting of experts and industryassociations today to discuss the plan. Chandran said there are about 70generating stations in East Malaysia, catering to the needs of smallertowns. A large majority of these are run by Tenaga Nasional. "Even if a50:50 blend (of olein and diesel) is used, it could easily take 20,000 to30,000 tonnes of palm olein a month" out of the market, he said. Today�smeeting is also expected to discuss possible subsidies to make the planmore attractive.