Oleh/By		:	DATO' SERI DR. MAHATHIR BIN MOHAMAD 
Tempat/Venue 	: 	HILTON HOTEL, KUALA LUMPUR, 
			ON MONDAY 
Tarikh/Date 	: 	12/11/84 
Tajuk/Title  	: 	THE OPENING OF THE AOCS/PORIM WORLD 
			CONFERENCE ON PROCESSING OF PALM, 
			PALM KERNEL AND COCONUT OILS 




 Saya mengucapkan tahniah kepada American Oil Chemists Society (AOCS) dan
Institiut Penyelidikan Minyak Kelapa Sawit Malaysia (PORIM) di atas usaha
mereka menganjurkan Persidangan ini. Persidangan ini, pada pendapat saya,
adalah tepat dan sesuai dengan keadaan semasa, ketika kita sedang giat
berusaha untuk memperbaiki jentera dan suasana berbagai aspek pembangunan,
pengurusan dan daya pengeluaran negara.

2. I would like to extend a very warm welcome to all of you present here
this morning, especially to participants who have come from overseas. This
year, I understand, also marks the 75th anniversary of the American Oil
Chemists Society and I am therefore pleased that you have chosen Malaysia
as a venue for this Conference together with PORIM, in your anniversary
year. To the President and members of the AOCS, I would like to extend my
congratulations on your anniversary and hope that the Society would
continue its good work in the context of the dynamic changes in the use of
oils and fats.

3. The development that Malaysia has achieved in the last three decades as
reflected in the expanding scale of resources, both natural and man-made,
and in particular oil palm is certainly one worth studying. Although the
oil palm was brought to Malaysia about a century ago as an ornamental
tree, oil palm cultivation started on a small scale only after World War
Two. However in the 1960's, arising from the need for agricultural
diversification, large tracts of land were cleared for oil palm
cultivation. Now, the oil palm has come to be known as the 'Golden Crop'
for Malaysia.

4. It is therefore not surprising that more than 13% of Malaysia's
population of 15 million are now directly or indirectly dependent on oil
palm cultivation and related industries. This is one of those industries
where the public and private sectors have combined well to achieve
progress. This twin and complementary role of the public and the private
sector is in line with the newly enunciated concept of Malaysia
Incorporated. The private sector is regarded as an essential partner in
development and every encouragement is being given to the private sector
to play its due role in this partnership.

5. We in Malaysia take pride in the fact that we have within a period of
less than two decades emerged in the international oils and fats community
as the world's largest producer and exporter of palm oil. The global
output of Malaysia's oil palm production is expected to increase steadily
and reach 5.6 million tonnes in 1990. Palm oil has been projected by the
FAO to show the fastest growth in the oil and fats sector, with total
world production estimated at over 6 million tonnes in 1985. Clearly,
Malaysia will play a major role in the oils and fats sector in the future
as it has done in the past.

6. It is partly because of this role that we establish the Kuala Lumpur
Commodity Exchange or KLCE. Apart from developing Kuala Lumpur into an
international commodity centre, the KLCE is seen as making an important
contribution to the process of price discovery which is so crucial in
international commodity trade and commerce. Until the recent defaults in
the palm oil contracts, the KLCE has served that function
magnificently. Since its inception in 1980, the daily average turnover
increased from 122 lots in 1980 to 132 lots in 1981, 220 lots in 1982 and
776 lots in 1983.

7. As a young Exchange, the good support that the KLCE has received from
the industry suffered a setback due to the recent defaults. However steps
are being taken not only to restore the palm oil futures market to
normalcy, but also to strengthen its structure of operation. To this end
various short-term and long-term measures, such as amendments to the
Commodities Trading Act 1980 and the Rules of the Exchange and the
Regulations of the KLCCH will be undertaken. I am hopeful that these will
bring about an improved Exchange beneficial to all sectors of the trade
and industry.

8. Despite the setback, the Government absolutely has no intention of
abandoning the idea of making Kuala Lumpur an international commodity
centre nor the concept of self-regulation which is vital in the operations
of Commodity Exchanges. At the same time the Government is concerned that
those who participate in the Exchange fully appreciate and understand that
discipline and a proper code of conduct and ethics are ingredients which
are vital if the Exchange is to truly reflect the forces of demand and
supply in the process of price determination. Equally vital is the support
of the international trading community in participating and in giving
recognition to the KLCE. Their long years of experience in commodity
futures markets constitutes an important component in making the KLCE a
viable and robust Exchange that should benefit all. I am hopeful that this
recognition is mutually acceptable especially on the part of the
international community and that we in Malaysia will see more and more
participants from overseas in the KLCE.

9. I am happy to note that palm oil has speedily outpaced its other main
competitors to rank second only to soyabean as the world's largest
resource-based material for both edible and industrial uses. As an
agricultural crop produced single-handedly in the developing world like
Malaysia, the track record of the industry as one of the major
contributors to national development is most impressive. We are fully
aware that for the growth of the industry to be effectively sustained, it
has to be matched by an equally vigorous programme of research and
development. In this connection PORIM constitutes the spearhead of the
palm oil industry in advancing and broadening the base of the industry
both in the upstream and downstream activities. This is in line with the
Government's policy of laying greater emphasis on R & D. In the face of
price volatility in the world market which creates havoc with the export
earnings of primary commodity producers, we look to R & D to bolster up
the industry and to enable it to be more cost-effective and more
resilient.

10. In its national research efforts in the palm oil industry, PORIM
although only established in May 1979, has already achieved a number of
breakthroughs. PORIM's research programmes are directed towards improving
oil quality by selective breeding, development of mechanical means of
harvesting, evaluation of by-product utilization, definition of product
standards and improvement of the oil mill and refining processes. With the
advent of vegetative propagation through tissue culture, large scale
clonal planting and replanting is envisaged in the future. The recovery of
Vitamin 'E' from the by-products of palm oil refinery, production of
diesel fuel from the methylesters of palm oil, recovery and use of the
biogas from the oil mill waste for the generation of electricity are some
of the highlights in PORIM's result-oriented research programmes. The
mounting evidence favouring b-carotene as an anti-cancer agent and the
role of excess polyunsaturated fats in enhancing cancer progression has
also triggered the potential of using palm oil in anti-cancer studies. It
has also been confirmed that palm oil does contain a substance that is
able to 'neutralize' or overrule the prothrombotic and atherogenetic
effect of the saturated fatty acids it contains. The nutritional
significance of palm oil cannot therefore be assumed on the basis of its
fatty acid composition alone. Hence, not only is palm oil generating its
own interest in the world of medical research, but its oil mill and
refinery by-products also offer productive uses which should add to the
dynamism of the oil palm sector.

11. With developments and advancement in oil palm technologies, I would
like to call upon the traders and users of oils and fats to give palm oil
its unbiased and fair competition in the world market. Unfair accusations
to denigrate palm oil by those who have vested interests to protect other
oils will not succeed. The outstanding features of our palm oil such as
its high oil yield, that is over ten times that of soyabean per hectare,
high quality, ideal for cooking as well as for margarine manufacture,
practically cholesterol free, easily assimilated and predictable
production cannot be brushed aside. Unfortunately, there still continue to
exist discriminatory practices against palm oil in the oils and fats
markets.

12. The competition between soyabean and palm oil is a case in point. Some
so-called experts even maintain that palm oil has no unique properties and
therefore consumption will only grow if it sells at a discount to soyabean
oil. These same experts forget to explain why the American potato chips
maker is willing to continue using palm oil even when it holds a premium
over soya. Could it be that certain unique properties of palm oil justify
payment of a premium? 

13. The obstacles being faced by palm oil are multi-facetted and are
well-known. Suffice for me to say that the case of the influential
anti-palm oil or pro-soyabean lobby has shown up in the form of
protectionist policies and higher tariffs on palm oil, especially that of
processed palm oil.

14. An important feature of the Malaysian industry is that it is
especially aimed to supply the world market. Domestic consumption takes up
only about 300,000 tonnes of palm oil products per year. This fact,
coupled with relatively more predictable output of a tree crop, makes
Malaysian palm oil a very reliable source of supply. As expressed in our
National Agricultural Policy we will continue to expand the acreage under
oil palm. We recognise the fact that success in the oil palm industry
depends on a high degree of organisation and management and it is
therefore intended that future developments will be carried out mainly by
Government agencies and estates and by organised smallholders. It should
be noted that Malaysia still has very large areas of land suitable for oil
palm which are still undeveloped. Within the last 10 years, Malaysia has
built up a refining capacity to match the crude oil output, so that the
products offered have been diversified to meet a variety of market needs.

15. I note with interest that coconut oil will also be discussed at this
Conference. Malaysia is also a coconut producer and coconut oil exporter
but on a modest scale, and we have contributed in no small way to the
development of high yielding coconut hybrids. From an agricultural point
of view, coconut has proved its value in recent years as a shade crop for
cocoa. The interplanting of these two crops is proving very successful and
profitable.

16. I am told that an attractive feature of coconut oil is its content of
short chain fatty acids, which makes it particularly valuable as a raw
material for the oleochemical industry. The only other significant source
of these acids is in fact palm kernel oil. Recent industrial development
in Malaysia has included capacity for the processing of the fatty acids
both of palm oil and of the lauric oils. The latest of these developments
is the growth of the oleochemicals industry in Malaysia which represent
yet another area for downstream processing.

17. The development of the palm kernel sector itself is of special
interest to Malaysia. Being basically a spin off from the palm oil
industry, it offers ample prospects for development, especially in the
context of the launching of an industrial master-plan for Malaysia. The
development of industries arising from the incidental production of palm
kernels can contribute markedly to investments in enterprises as part of
the continued expansion of resource-based industries and the growth of
export oriented industries.

Ladies and Gentlemen, 

18. This Conference represents a very major effort from an international
focus to examine the technical, marketing and economic aspects of the
increasingly important segments of the fats and oils industry. From your
programme, I note that discussions will deal with recent advances in the
state-of-the-art processing as well as utilization of the important oils
in question. I would therefore like to take this opportunity in wishing
all of you success in your deliberations. I now have great pleasure to
declare this AOCS/PORIM World Conference on Processing of Palm, Palm
Kernel and Coconut Oil open.

Thank You