Breaking News-RTRS-UPDATE 1-Malaysia mulls new rule on palm oil millers

KUALA LUMPUR, Nov 17 (Reuters) - Malaysia may introduce a regulation to force palm oil millers to buy from oil palm smallholders, Commodities Minister Peter Chin said on Monday. Inventories of the vegetable oil rose to a record 2.09 million tonnes in October, resulting in millers running at near full capacity and making them reluctant to buy palm fruits from smallholders, which account for 40 percent of the country's total annual production. "The trouble is we have a peak fruiting season, most of the mills are running at full capacity. My sympathies are with the smallholders," Peter Chin told an industry seminar. "I am looking at regulations to compel millers to buy these fruits." Chin later told reporters he had directed industry regulator the Malaysian Palm Oil Board to investigate millers who refused to buy palm fruits.