12/1/07 (The Edge News) - Kuala Lumpur: Malaysian palm oil exports reached a record 31.81 billion ringgit (9.05 billion dollars) in 2006, thanks to high prices and strong demand from the food and biodiesel sectors, a report said Thursday.

The result was a five percent increase on the 30.44 billion ringgit recorded in 2004, Malaysian Palm Oil Board director general Mohamed Basri Wahid told the New Straits Times.

Mohamed Basri said China remained the biggest buyer and that its imports surged to 3.58 million tonnes last year.

"China has been buying more and more of our palm oil every year, but in 2006 it was a very good 20 percent growth," he said.

Demand from the United States also increased sharply, as food manufacturers there switch to palm oil instead of hydrogenated oils which contain trans fats and have been criticised on health grounds.

"In 2005, demand from the US rose 65 percent because of the US government's mandatory labelling of trans fat content on packaged food by January 1, 2006," he said.

Mohamed Basri said it was possible that the US may become Malaysia's third biggest export market, replacing Pakistan.

Malaysia is the world's biggest palm oil producer, but Indonesia has said it wants to claim that title by 2008, by allowing new plantation areas and launching a revitalisation program for existing plantations.

The two countries account for 85 percent of world production.

Meanwhile Malaysia is aiming to become the world's top producer of biodiesel, as high prices for crude oil cause demand for the alternative fuel to soar.- AFP