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Malaysia urges palm oil mills to resume production despite price drop

KUALA LUMPUR, June 28 (Reuters) - Malaysian authorities on Tuesday called on palm oil millers to resume production and buy oil palm fruits from farmers, after a recent plunge in prices of the edible oil prompted some companies to halt processing. Unprofitable pricing meant mills in Malaysia, the world's second-largest palm oil producer, had temporarily halted operations, an industry body said on Monday. Malaysian crude palm oil futures posted their biggest one-month decline in more than 13 years in June, recording a 22% drop and erasing most of this year's gains. Prices had rallied to a record high earlier in 2022 due to supply concerns. POI/ Wee Jeck Seng, deputy minister for plantation industries and commodities, said the government has received complaints about mills refusing to buy oil palm fruits. "The fruits cannot be kept for more than two to three days, or they will rot. It will affect smallholders," Wee told reporters on the sidelines of an industry seminar. "The millers should be responsible, no matter if prices are high or low," he said. The state-run Malaysian Palm Oil Board, the industry regulator, will discuss the matter with the mills, Wee said. The Malaysian Palm Oil Millers Association (POMA) told Reuters on Monday that at current prices, the mills - which are already facing labour shortages and high input costs - stood to lose at least 150,000 ringgit ($34,114.17) for every 100 tonnes of crude palm oil produced. ($1 = 4.3970 ringgit) (Writing by A. Ananthalakshmi Editing by Ed Davies) The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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