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The warning came after reports that some millers had suspended production following a plunge in the price of edible oil.
The Malaysian Palm Oil Board (MPOB) issued a warning letter to all millers on Thursday, said the Plantation Industries and Commodities Ministry.
“MPOB will take action against millers that affect the nation’s palm oil production,” ministry Deputy Minister Wee Jeck Seng said.
“Drastic action, including suspending their operating licences, will be taken if it is proven that this has happened, for the survival and sustainability of our palm oil industry,” he added in a statement.
Wee said he was disappointed by the millers’ decision to halt production and stop buying FFB, adding that their action has made meaningless the whole purpose of issuing operating licences.
“I take this matter seriously and request palm oil millers to not halt production, which is required under their licence, to avoid any legal action.
“Hopefully, this directive can be fully implemented by the millers in support of the government’s efforts to continue improving palm oil output in the market, which is now facing the challenge of declining prices,” he added.
The price of Malaysian crude palm oil (CPO) saw its biggest one-month drop in more than 13 years in June, tumbling 22 per cent to 4,922 ringgits (about 39,700 baht) on Monday from a high of 6,632 ringgits.
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