RP, Malaysia ink accord for expansion of palm oil project

KUALA LUMPUR, Malaysia – Within the course of President Arroyo’s three-day state visit here, Agriculture Secretary Leonardo Montemayor "quietly signed" an agreement to expand an existing palm oil project in the Philippines with C.K. Chang of Agusan Plantations of Malaysia.

Montemayor inked the agreement on the second day of the state visit of President Arroyo, with Presidential Adviser for Regional Development Paul Dominguez who did the spadework as advanced party of the presidential entourage.

Though the palm oil project was one of the principal items in the agenda of President Arroyo’s state visit here, Montemayor tried to keep quiet about the signing of the agreement after receiving word from Manila that militant coconut farmers were up in arms to oppose and block it.

Filipino coconut farmers have expressed fears that the palm oil project would dislocate them because palm oil is preferred in the world market over coconut oil.

Palm oil is now the major raw materials for soap, butter, toothpaste and other manufactured products which used to depend on coconut oil which is being phased out because of its supposed high level of aflatoxin that causes liver cancer.

Montemayor told The STAR he signed the palm oil project agreement with C.K. Chang to expand their firm’s current palm oil plantation in Agusan del Sur which covers only 6,500 hectares.

Under the agreement between the DA and Agusan Plantations, the palm oil hectarage would be increased by another 13,500 over the next three years or until 2004.

Montemayor said similar plantations will be put up in Bohol and Cotabato or Sultan Kudarat.

Montemayor said the Malaysian firm will invest an average of P50,000 per hectare in terms of raw material inputs and technology.

In her state visit here, President Arroyo was reassured by Malaysian Prime Minister Dr. Mahathir Mohammad that Malaysia is ready to respond to her offer and invitation to invest in some 165,000 hectares for palm oil industry in the Philippines.

President Arroyo identified Mindanao as the most appropriate place for palm oil plantations since it is in this part of the Philippines which could approximate the climate and altitude required for palm oil trees.

Palm oil trees look like coconut trees but are smaller and bear fruits that are much smaller than coconut.