Malaysia has agreed to export US$20 million worth of palm oil to North Korea in exchange for cash or goods such as steel and cement, a senior minister said Thursday.

"Malaysia will provide a credit facility of 20 million dollars for the purchase of Malaysian palm oil over a period of two years by a North Korean-nominated company," Minister of Plantation Industries and Commodities Peter Chin said at a signing ceremony.

The deal marks the third purchase from North Korea after US$10 million deals in 2000 and 2002, both under a credit scheme to "penetrate new and difficult markets," Chin said in Malaysia's administrative capital Putrajaya.

Based on current prices, some 60,000 tonnes of palm oil will be shipped, he said, adding that North Korea is currently a "very negligible" market for Malaysia whose annual palm oil exports are almost 14 million tonnes.

Chin later stressed that the trade pact had no political dimension.

"The government of Malaysia is very consistent in its policy with this palm oil credit and payments arrangement with North Korea. So there is no politics involved," he said.

"This decision was reached in consideration of the adverse economic conditions in the country, as well as based on humanitarian grounds," Chin added.