Palm oil shipments to Pakistan disrupted

Palm oil shipments to Pakistan disrupted

KUALA LUMPUR (AFP): Malaysian palmoil prices were likely to fall further due to fears possible United States military action against Afghanistan would hit exports to Pakistan, a report said Friday.

The Business Times quoted Primary Industries Minister Lim Keng Yaik as saying many shippers were reluctant to go to the area unless insurance companies provided war coverage.

"Transportation is a problem right now and shippers dare not go beyond India and have problems in getting their insurance coverage for their ships," Lim said.

The ruling Taliban militia in Afghanistan are believed to be sheltering Osama bin Laden, whom Washington blames for the Sept.11 terror strikes in New York and Washington.

"What Malaysia can do now is to intensify efforts in penetrating new markets and boost our efforts to replant and continue burning crude palm oil to generate energy," Lim added.

Pakistan is Malaysia's fourth largest buyer of palmoil, after India, China and the European Union. An average of 100,000 tons of processed palmoil is shipped to Pakistan monthly.

Malaysia, the world's largest palmoil producer, has begun a replanting project and told the national power firm to burn palm oil to generate electricity in a bid to reduce stocks and cut production.

The efforts helped push prices in July above the 1,000 ringgit (US$263) level for the first time in 10 months but prices have fallen below that after the terrorist attacks.