24/11/2008 (Business Times, Malaysia) - PALM oil producers including Sime Darby Bhd and IOI Corp, the world's two largest, backed proposals by the Malaysian government to reduce output after the price of the commodity slumped.

Six growers in Malaysia, the second-largest producer of palm oil, will collectively replant 200,000 hectares (494,000 acres) of old trees, Sime Darby and the other producers said in a statement today outside Kuala Lumpur.

This will cut production by 700,000 metric tons annually from January 2009, according to the statement. The six plantation companies supply almost 60 per cent of Malaysia's palm oil, they said in the statement.

The measure was first proposed by the Malaysian government on October 30 under plans to give estate owners RM1,000 (US$276) for each hectare of mature oil palm they replant. Palm oil, used mostly as an edible oil, has slumped 60 per cent in the past six months.
 
Meanwhile, Malaysia’s palm oil growers said state-controlled power utility Tenaga Nasional Bhd should burn part of the country’s palm oil supply to convert into energy in an effort to reduce stockpiles. -Bloomberg-