Thestar.com. Malaysia,
Wednesday, March 21, 2001.
MALAYSIA will provide a 1.21 billion yen (US$10mil) credit facility for Cuba
to purchase 35,000 tonnes of palm oil under the Palm Oil Credit and Payment
Arrangement (POCPA) scheme.
A memorandum of understanding (MoU) on the facility was inked by the two
governments in Kuala Lumpur yesterday.
Malaysia was represented by Primary Industries Deputy Minister Datuk Anifah
Aman and Cuba by its ambassador to Malaysia, Teresita Fernandez Diaz.
The POCPA agreement setting out the mechanism of credit utilisation and
repayment schedule would be signed by the two countries' central banks soon.
The POCPA scheme would be implemented by two companies one Malaysian and one
Cuban over a period of 14 months.
The credit facility is also tied to a counter-trade arrangement, whereby the
Cuban company will provide Cuban products to Malaysia or other third countries
through the Malaysian company.
Proceeds from the exports will be used to settle the credit facility.
Anifah said the POCPA scheme was a Malaysian government strategy to expand
the palm oil market to selected countries which were experiencing shortage of
foreign exchange.
"By doing so, we not only maintain our traditional markets but open up
new ones as well,'' he said.
Nine countries Pakistan, Algeria, Iran, Iraq, Myanmar, Bosnia-Herzegovina,
Sudan, North Korea and Cuba--are participating in the scheme, which was
introduced in 1992. To-date, some US$227.4mil of the total US$500mil in credit
allocated by the government has been used.
"The POCPA scheme has proven to be an effective marketing tool to
penetrate new and difficult markets,'' Anifah said.
This is the second time the POCPA scheme has been offered to Cuba. In 1998,
Malaysia offered the republic a credit facility of 1.25 billion yen and Cuba
bought 11,160 tonnes of palm oil.
Anifah said Cuba was heavily dependent on oils and fats imports as it
produced only a small amount of its requirement.
In 1999, Cuba imported 100,100 tonnes of oils and fats, with palm oil
accounting for about 23,000 tonnes or 23%.
Ambassador Fernandez said the usage of palm oil was only at the initial
stage and there was still a lot of promotional work to be done in the country.
Fernandez said there may be a possibility of Cuba importing more palm oil
for use in manufacturing later.
Anifah said other than exploring new markets (for palm oil), the government
was promoting the use of crude palm oil (CPO) to replace diesel oil at power
stations and factories.
Datuk Dr Abdullah Mohd Tahir, secretary-general of the ministry, said
plantation companies had agreed to set aside 5% of their annual production for
use as fuel. | 