11/8/06 (The Star)  -  SERI KEMBANGAN: Malaysia's first shipment of biodiesel will leave for Europe next week, said Plantation Industries and Commodities Minister Datuk Peter Chin.

“Prime Minister Datuk Seri Abdullah Badawi will be launching the first Malaysian Palm Oil Board (MPOB)-initiated biodiesel plant in Pasir Gudang as well as the first shipment of 60,000 tonnes of the biofuel to Europe on Aug 15,” he said after opening the MPOB workshop on Clonal and Quality Replanting Material yesterday.

The biodiesel, believed to be heading to Germany, is processed by Carotino Sdn Bhd, a member of Johor-based J.C. Chang group of companies.

Chin said biodiesel, which was currently fetching US$700 per tonne, had become increasingly competitive, particularly in Europe, as crude oil prices continued to rise. 

On the national oil palm productivity, Chin said Malaysia must increase the pace at which oil palm was replanted to realise the Government's vision of achieving 35 tonnes of oil palm fresh fruit brunches (FFB) per hectare yearly and 25% palm oil extraction rate by 2020.

“At the current replanting rate, we cannot meet the target,” he said, adding that the local palm oil industry still had a long way to achieve the 25% oil extraction rate.

Chin attributed the low rate of replanting to the slow response from independent smallholders. He said quality replanting by smallholders was hampered by the cost of using high-yielding seeds and replanting materials. 

Improving commodity prices had also discouraged some smallholders from felling the old oil palm trees, he added.

The replanting programme is backed financially by a government RM90mil soft loan facility, where each smallholder is entitled to a loan of some RM6,000 per ha.

Chin said the Government was considering taking appropriate measures, including introducing new tax incentives, to promote the programme.

“We have no intention as yet to make the replanting programme mandatory,” he said, adding that he would wait for the outcome of the one-day MPOB workshop.

He said the Government would consider implementing the proposals and recommendations made at the workshop on replanting strategies and policies towards achieving an increased national productivity target of one tonne of FFB per hectare per year.

“Hopefully it will encourage the plantations to adopt clonal planting materials in their programmes to increase yields,” he added.

An industry source said ideas had also been mooted to consolidate the independent smallholders into a single plantation group, managed by a company appointed by MPOB. 

At present 10%, or 400,000ha, of the country’s four million hectares of oil palm plantation are owned or run by independent smallholders. Each of them owns about 10ha.