KL to cut palm oil output

KL to cut palm oil output

KUALA LUMPUR (Reuters): Malaysia is considering cutting palm
oil output by 450,000 tons a year to help support prices by
replanting aging trees, Primary Industries Minister Lim Keng Yaik
said on Monday.

"Perhaps it's time to think about replanting," Lim told
reporters after a meeting with Vietnamese Foreign Minister Nguyen
Dy Nien in Malaysia's capital.

"If we replant 150,000 hectares per year, let's say an average
one hectare can produce three tonnes of oil, we would have
reduced production (by) 450,000 tons per year through
replanting," said Lim.

Crude palm oil output in Malaysia, the world's largest
producer, is expected to rise to nearly 11 million tons in 2000
from 10.5 million in 1999, but rising production has depressed
prices.

Lim said the government had set aside 80 million ringgit
(US$21 million) for a soft loan scheme to help small growers
replant old trees. Asked when the replanting would start, he
said: "Immediately."