16/09/2007 (AFP), KUALA LUMPUR - The value of Malaysia's palm oil exports is expected to reach a record high this year thanks to strong worldwide demand fuelled by the boom in biofuels, a report said Sunday.
Plantation Industries and Commodities Minister Peter Chin told the Sunday Star that export values were up despite a fall in volume, to 8.9 million tonnes for the first half of 2007 compared to 9.3 million tonnes in the first half of 2006.
"Because of the current sharp hike in demand for palm oil, the price per tonne has also shot up. Due to this, our revenue from exporting this oil has also shot up tremendously this year," he told the newspaper.
Chin said that revenue from exports of palm oil and related products hit 17.9 billion ringgit (5.15 billion dollars) in the first half of 2007, up 23.6 percent from the 14.1 billion ringgit earned in the same period a year ago.
"If this trend continues, this year will be a record year in terms of palm oil earnings," he said.
Chin said that earnings from other commodities including cocoa and rubber were also doing well.
Malaysia, the world's top producer of palm oil, has warned that output in 2007 will likely fall to 14 million tonnes, the lowest in two years, due to heavy flooding.
Palm oil production in 2006 was 15.8 million tonnes, up from 14.96 million tonnes in 2005.
Malaysia and Indonesia account for 85 percent of world production, and Indonesia is on track to claim the mantle of top producer as it expands the area of land it has under plantation.
Palm oil prices have been surging as high prices for crude oil cause demand for alternative fuels to soar.