KOTA KINABALU 15/12/2012: Oil palm mills in Sabah have no reason to refuse Fresh Fruit Bunches (FFB) sold by farmers.
Plantation Industries and Commodities Minister Tan Sri Bernard Giluk Dompok said the capacity of mills in Malaysia was 5.89 million tons, and only 43 per cent of that had been utilised.
In the context of Sabah, only 46 per cent of the 1.84 million tons capacity of tanks at mills have been utilised.
“I don’t want them to refuse the FFB from farmers. I will talk to the millers on the reasons (why they are refusing the FFB),”
He added earlier that he had heard of millers refusing to take the FFB from farmers and the farmers had thought that the reason was due to the capacity of the mills’ FFB tanks.
Dompok said the Government is planning to implement B10 fuel programme in unsubsidized sectors next year to boost utilization of the country’s huge stock of crude palm oil (CPO).
He said the move was expected to help bring CPO inventory to a healthier level and stabilize prices.
In addition, he said the Government has also agreed to use palm oil as fuel for generating electricity, especially in Sabah.
“The Ministry has done consultations with relevant parties on this matter… Besides the biofuel being sold to power stations, we believe Sabah Electricity Sdn Bhd (SESB) could also use biodiesel as their power generation source,” he told reporters after the Ministry’s Career Carnival at Tun Fuad Stephens Hall, here.
He said the move will bring positive impact on the prices of CPO with regard to the supply-demand situation, adding that one million tonnes of CPO was expected to be utilized under the programme annually.
Dompok explained that the programme was necessary as decreasing demand caused by unsteady economy in major consumer nations had resulted in downtrend in the global CPO prices.
Overproduction during high season on top of monthly stocks that were already above normal level had caused further pressure on the market prices, he added.
Malaysia currently implements B5 mandate to channel the huge domestic palm oil stocks as feedstock to biodiesel producers.
An upgrade from B5, B10 is a blend of 10 per cent palm methyl ester (PME) and 90 percent diesel.