14/12/2007 (Daily Express), Serdang - The current high prices enjoyed by crude palm oil (CPO), moving between RM2,800 to RM2,900 per tonne, are a source of concern for certain industry players, Plantation Industries and Commodities Minister Datuk Peter Chin Fah Kui said Thursday.

He said the high prices were not considered competitive and could burden some players, especially those in the biodiesel related group.

"Basically, the CPO prices which are comfortable for the industry should be around the RM2,300 to RM2,600 level," Chin said when asked to comment on the recent jump in CPO futures contracts traded on Bursa Malaysia Derivatives.

"If the CPO price is from RM2,900 to RM3,000, then it can be considered too high but is still good for the time being," he said.

According to him, the biodiesel players rely on CPO as raw material to make methyl ester and cannot make profit if the price rises above the RM3,000 per tonne level.

Speaking to reporters after chairing the annual dialogue between the Plantation Industries and Commodities Ministry and Universiti Putra Malaysia (UPM) here, Chin said the government could not intervene in the current high price issue despite calls by some industry players.

"The movements of the CPO prices are determined by market forces, which can be influenced by several factors such as shortage of other oils, record crude oil prices, shortage of supply due to wet weather conditions and many more," he said.

"We (the government) cannot do anything," he added.

In the past few weeks, the CPO futures contracts have crossed the RM3,000 mark for the first time, with the February 2008 contract month hitting an all-time high of RM3,038 per tonne on Nov 26 after global crude oil prices rose to a record high of US$98 per barrel.

CPO prices are also rising, given the demand for alternative energysources as well as that from food producers worldwide. -Bernama-