Malaysia to tap fund for palm oil biodiesel, replanting

Malaysia will tap 400 million ringgit ($110 million) from a palm oil stabilisation fund to boost palm biodiesel production and replanting of oil palm trees, an industry official said on Monday. Of the amount, 200 million ringgit will be used for biodiesel and another 200 million for replanting, said Lee Oi Hian, Chief Executive of Malaysia's third biggest planter Kuala Lumpur Kepong.
He was speaking to reporters after top industry officials met to discuss government efforts to boost palm oil prices. Palm oil prices have lost about two-thirds in value after hitting record highs of 4,486 ringgit a tonne in March. Other companies represented at the meeting were Sime Darby, IOI Corp, United Plantations, Boustead and state plantation firm Felda.
The companies said replanting of palm oil in Malaysia, covering 200,000 hectares, was likely to be completed in the first half of 2009. At the meeting, the companies also asked national power firm Tenaga Nasional to use part of crude palm oil stocks as feedstock for power generation.