Bernama.com (Malaysian National News Agency), 13 March, 2007

Bio-Fuel Industrial Act To Be Ready By May This Year

KUALA LUMPUR, March 13 (Bernama) -- The Bio- Fuel Industrial Act is expected to be ready for implementation by May this year, Plantation Industries and Commodities Minister Datuk Peter Chin Fah Kui said Tuesday.

He said the Act would give the government the right to revoke bio-fuel licences.

"Currently, there are about 90 bio-diesel licences in the country. Being a new industry, it is expected to face many challenges related to feedstock prices and volatility of crude oil prices, tariffs and non-tariff barriers, including environmental pressures against palm oil," he said at a media briefing after the Annual Palm and Lauric Oil Conference and Exhibition.

Malaysia, the minister said, has made some progress in the bio-diesel industry.

"To date, there are five bio-diesel plants operating with a total palm oil feedstock requirement of 0.35 million tonnes. Five more plants are expected to come onstream this year," he said.

"We see a lot of potential in the bio-diesel industry. The growth in demand for bio-diesel in Europe will also spur the growth of the bio-diesel industry," he added.

On the outlook for crude palm oil (CPO) prices, Chin said it would be on the uptrend.

"This year's crude palm oil production is projected at 16.5 million tonnes, reflecting only a small growth considering the impact of the recent floods in the affected oil palm areas and predicted occurrence of the El-Nino weather phenomenon," he said.

Production of crude palm oil increased from 15 million tonnes in 2005 to 15.9 million tonnes in 2006, up by 6.1 percent, and it was the eighth consecutive year that Malaysia witnessed a positive growth in production, Chin said.

"This positive growth was attributed to the increase in mature areas by two percent and a rise in the average fresh fruit bunches yield per hectare by 3.8 per cent to 19.6 tonnes due to better management and agricultural input," he said.

Chin also said that certain recent developments in the world palm oil market were expected to boost the industry.

"The reduction in duty of vegetable oils in India recently will be positive for us," he said.

"We are now currently on G to G (government to government) talks with the Indian government, relating to palm oil and trade related issues on commodities," he added.

-- BERNAMA