14/10/2008 (The Star Online), Petaling Jaya - The Plantation Industries and Commodities Ministry will push for mandatory biodiesel use in the public transportation industry in its next meeting of the Cabinet Committee on Competitiveness of Palm Oil, following a similar implementation in Indonesia recently.

Minister Datuk Peter Chin said the ministry would first introduce the use of B5 biodiesel in the transportation industry before gradually moving to other industries.

“We reckon that about 500,000 tonnes of B5 biodiesel could be used in this sector every year,” he told reporters after the opening of the IRRDB International Natural Rubber Conference 2008.

Biodiesel B5 is a biofuel blend of 5% processed palm oil and 95% diesel.

Currently, crude palm oil (CPO) is overstocked by 1.9 million tonnes monthly. “We hope to bring down the monthly overstock level to 1.5 million tonnes and below,” Chin said.

As part of strategies to reduce overall monthly overstock of CPO, he said the ministry had increased the export quota to 3 million tonnes per annum from 2 million tonnes previously,

Chin reckoned that Malaysia alone could not tackle the situation and should work in tandem with the Indonesian government to reduce the stock level.

“We will request Indonesia, the largest CPO producer in the world, to look at its stock level too,” he said, noting that the Indonesian overstock level was even higher than Malaysia’s.

Although overall demand for CPO was expected to drop during the current financial crisis, Chin insisted that there would still be demand from markets such as China.

“I don’t see how China can stop buying CPO to an appreciable level seeing that their (Chinese) consumption per capita has increased and they would need vegetable oil to supplement their diet.

“We might be facing declining exports in the fourth quarter but overall we should be able to match the exports of last year’s as first-half exports were strong,” said Chin.

On the CPO price, he said: “I don’t foresee the price coming down too much. We will still like to see our CPO being maintained at a comfortable level of RM2,500 per tonne.”