BANGLADESH AND MALAYSIA PLAN BILATERAL PACT ON PALM OIL

By P. Vijian

DHAKA, Dec 14 (Bernama) -- The Bangladeshi government is keen to procure
palm oil from Malaysia using its state-owned trading arm to ensure consistent
edible oil supply and price stability prevails in the domestic market.

Plantation Industries and Commodities Minister Bernad Dompok told
Bernama that Bangladesh was keen on a bilateral arrangement, and Malaysia
welcomed the proposal as it would encourage more exports of the commodity to the
populous South Asian nation.

"Bangladesh is interested to have a government-to-government buying
arrangement to ensure there is steady supply and price of palm oil is maintained
in the local market," said Dompok.

"This will also help Malaysia export more to Bangladesh because their
current per capita consumption is only 8.6 kg compared to world's average
consumption of 22 kg, there is good opportunity for growth," he said.

Bangladesh's Commerce Minister Faruk Khan conveyed the government's interest
to Dompok, who was in Dhaka to inaugurate the Malaysia-Bangladesh Palm Oil Trade
Fair and Seminar (POTS) 2009 last week.

The state-run Trading Corporation of Bangladesh (TCB) will be entrusted to
procure the supply on behalf of the government, which for the first time will
intervene in the import business that was completely dominated by the private
sector.

Annually, Bangladesh imports about 1.4 million metric tonnes of palm oil for
its domestic consumption, largely from Indonesia and Malaysia.

In 2008, Malaysia exported about 217,264 metric tonnes to Bangladesh.

But this year's January to October figures had been dismal -- only at 57,726
metric tonnes -- after many Bangladeshi buyers bitten by the rising price
shifted to Indonesian suppliers who offered cheaper rates.

The Palm Oil Credit Payment Arrangement (POCPA) will also be considered in
the bilateral discussion likely to be held in Kuala Lumpur next month.

-- BERNAMA