17/1/06 CYBERJAYA, (Bernama) -- The Malaysian palm oil industry is likely to expand aggressively with the increasing demand for the commodity, particularly due to its usage for biodiesel, Plantation Industries and Commodities Minister Datuk Peter Chin Fah Kui said.

"Malaysia exported RM30 billion worth of palm oil in 2005 and, of course, the prospect of this industry getting bigger is always there because not only the acreage has been increased in Sabah and Sarawak, but the downstream products now are getting more, especially on the use of biodiesel," he told reporters after launching the "National Level Malaysian Palm Oil Awareness Campaign for Schools" at Sekolah Menengah Seri Puteri, here Tuesday.

The campaign by the Malaysian Palm Oil Promotion Council (MPOPC) is aimed at ensuring a wider acceptance of products made from palm oil among Malaysians, particularly the younger generation.

According to Chin, the palm oil industry is likely to go for aggressive expansion this year.

"With biodiesel taking off, the demand for raw materials will rise," he said.

On challenges facing the industry, Chin said: "As I have said before, Malaysia has limited land, so the challenge to the industry is how to increase the yield or productivity."

"This is one of the obstacles that we have to work on," he said.

Asked about the commodity price outlook, MPOPC chairman Datuk Lee Oi Hian said: "The price is supportive because of the potential demand for biodiesel following prices for petroleum being sustained at a very high level."

On whether the price could go up further, Lee said this would depend on the Brazilian soybean harvest due in the next few months.

However, Chin said he would prefer that the palm oil price was maintained at its current level.

"If the price goes too high, it doesn't mean that it's good for the industry. At the present level of RM1,400, I think it is very comfortable," he said.

"We hope this will continue into 2006," he added. Chin said the ministry has targeted to increase the production yield from four tonnes per hectare per year at the end of the Ninth Malaysia Plan,

"We look forward to increasing the yield by another tonne or so to five tonnes. It will be a big achievement," he said.

"With an extra one tonne, we will increase production by 25 percent and this will be a big help to the country's total production," added.

-- BERNAMA