SITS 2008 TO HELP STABILISE THE MARKET PRICE OF PALM OIL

KUALA LUMPUR, Dec 11 (Bernama) -- The Oil Palm Replanting Incentive Scheme
(SITS 2008) with an allocation of RM200 million (US$=RM3.61), is aimed at
stabilising the market price of palm oil while enhancing productivity.

The Deputy Minister of Plantation Industries and Commodities Senator A.
Kohilan Pillai said that the scheme, implemented on Dec 1, was open to all
estates and oil palm smallholdings as well as settlers or participants in
goverment programmes such as FELDA, FELCRA and RISDA.

The scheme also involves state government agencies licensed by the
Malaysian
Palm Oil Board (MPOB) and is based on a "first come,first served" basis, he
said.

The scheme is being undertaken voluntarily with an incentive of RM1,000 for
every hectare of oil palm trees of above 25 years that were cut, Kohilan told
the Upper House of Parliament when answering a question on the oil palm cluster
replanting programme Thursday.

He said that SITS 2008 had also target to replant 200,000 hectares of oil
palm and reduce the production of crude palm oil to 700,000 tonnes
annually.

"The reduction will contribute to the lowering of palm oil stocks and thus
help push up the market price of palm oil," he explained.

He also said that a similar scheme was previously undertaken in 2001 and
it
had proven successful in increasing the market price of palm oil from RM894.5
per tonne to RM1,363.5 per tonne in 2002.

In this regard, the average price of palm oil in 2003 improved to the
RM1,544.5 level.

-- BERNAMA