26/07/2008 (Bernama), Miri - Plantation Industries and Commodities Minister Datuk Peter Chin Fah Kui will meet his Indonesian Agriculture Minister Dr Anton Apriyantono in Jakarta next week to discuss measures to be taken concerning the current downward trend of palm oil prices.

Speaking to reporters here Saturday, Chin said the meeting would be significant for both countries as they commanded over 85 percent of the world's palm oil production.

"Malaysia and Indonesia as the producing countries (for palm oil) view this trend with anxiety," he said, adding that all factors that led to the downward trend of the commodity would be analysed at the meeting.

Chin said the price of palm oil had closed at RM3,095 per tonne yesterday and this was way below the average price of RM3,500 per tonne over the last four years.

He said among the factors that had been identified so far to have caused the declining price were the declining demand for the commodity, particularly in European countries during the summer season and competitions from other commodities such as soya bean, rapseeds, sunflower and corn.

The monthly stock of palm oil in Malaysia reached two million tonnes recently and Chin said this was the highest stock volume since 2004.

He said the monthly stock which raised one-fold from the average one million tonnes could cause the commodity price to fall further, forcing exporters to sell palm oil at lower price in order to decrease stock.

"The capacity for stock is very important. If our stock level is high but our refineries had sufficient stock capacity, then it is OK. Otherwise, they would have to let go of the stock and sell it cheap," he added.