KL mulls palm oil-rail swap

KL mulls palm oil-rail swap

KUALA LUMPUR (AFP): Malaysia hopes to sell some four billion ringgit (US$1.05 billion) worth of palm oil to China in exchange for the construction of a rail project.

The Sun newspaper quoted Primary Industries Minister Lim Keng Yaik as saying over the weekend that he would make the offer to a rail contractor in China during a trade mission there. Lim's office confirmed his remarks.

The offer is to maintain a railway track from the state of Negeri Sembilan to Johor and construct a double track on condition that payments are in the form of palm oil, the minister said.

"If the project takes four years, then China will have to import palm oil worth the cost of the project within that period," added Lim, who left Sunday for China.

The minister attributed the current drop in palm oil prices to high supply, surpassing demand.

Other efforts to boost flagging prices included the waiver of duty on crude palm oil exports to India and the allocation of funds to some importing nations -- including Bangladesh, Myanmar, Russia and North Korea -- through a credit payment scheme.