Archived News

08 July 2002 (The Star) - SUTRAJAYA Shipping Sdn Bhd, a shipping linecreated by the country’s single largest shipper, Felda, is continuing tomake waves.

JAKARTA, June 28 (Reuters) - Growth in Indonesia's crude palm oilproduction is seen slowing over the next few years as refining capacityfails to keep pace with the expansion of areas under cultivation, industrysources said on Friday. Refining capacity is already beginning to lagplantation output due to the lack of investment in the expensive refiningsector since the Asian financial crisis of 1997."On the other hand, production of fresh fruit bunches is rising as newtrees planted before and during the crisis mature," Nafis Daulay, chairmanof the Indonesian Edible Oil Industry Association, told Reuters.Indonesia is the world's second largest palm oil producer after Malaysia.The sprawling archipelago's total area under oil palm cultivation isestimated to have gone up to 3.3 million hectares in 2001, from slightlyover two million hectares in 1995, the Indonesian Palm Oil ProducersAssociation said.Indonesia is expected to produce 9 to 9.2 million tonnes of palm oil in2002, compared with 8.3 million tonnes in 2001, it said.Exports were seen rising to 5-5.5 million tonnes, compared to 4.9 milliontonnes in 2001 as Indonesia pushes exports as output exceeds domesticdemand.Industry sources said the shortage of refining capacity was most acute inKalimantan -- the Indonesian side of Borneo island -- and in Sumatra andeastern Indonesia, where many plans to build refineries have been on holdsince the late 1990s.Ethnic conflict in Kalimantan, between indigenous people and migrants, andsecurity problems in Sumatra have also delayed the building of manyfactories."In my estimation, there was around one million tonnes of fresh fruitbunches wasted last year because they could not be processed," said oneplantation owner in North Sumatra.A Jakarta trader said: "When prices are low, smallholder farmers, who donot have their own mills, make no margin by taking their crop to otherpeople's mills so they let the bunches rot."Even the main growing of Sumatra, where around 240 refiners operate, facesa shortage in refining capacity during peak output months.Industry sources say Sumatra has around 2.15 million hectares of matureplantations which yielded some 44-45 million tonnes of fruit bunches lastyear.And in turn they add this amount of oil requires a refining capacity of10,300 tonnes/hour, while current capacity at the refineries is onlyaround 9,640 tonnes/hour.

06/20/2002 (BusinessWorld) - The Philippines, the world's biggest coconutoil supplier, foresees a 36% drop in coconut oil exports this year due toan expected fall in local copra production.The United Coconut Association of the Philippines, Inc.'s (UCAP) revisedcoconut industry forecast shows that coconut oil exports is expected toreach only 900,000 metric tons in 2002. This is 36.1% lower than lastyear's export volume of 1.407 million metric tons.UCAP is the umbrella organization of local coconut oil millers, refinersand traders."Production deficit anticipated for 2002 will correspondingly reduce coprasupply for coconut oil milling and consequently, coconut oil volume forthe export market,"UCAP said.It also said preliminary data show coconut production for 2002 isanticipated to drop significantly to 2.161 million metric tons (in copraterms), down 23.6% from last year's all-time high of 2.828 million metrictons.The decline is due to two successive years of heavy fruiting at above-normal levels, which has stressed coconut trees and resulted in a declinein copra deliveries.Despite the uptick in coconut oil prices in the world market, the declinein export volume will continue to dampen export revenues.UCAP said revenues from coconut oil exports will continue to decline to$310.05 million, down 24.7% from last year's revenues pegged at $411.52million.The group also said it expects coconut oil prices to average $345 per tonof coconut oil, or 17.8% higher than last year's $292 per ton. Wirereports, however, show that coconut oil prices have gone up to $430 perton in the world market.UCAP, however, stressed that improved price levels during the year willnot offset the decline in revenues.For the first semester ending in June, UCAP expects coconut oil exports toreach only 465,000 metric tons, down 33.5% from 698,851 metric tons in thesame period last year.In the second semester, coconut oil exports are expected to reach only435,600 metric tons, posting a sharp 38.6% decline from 708,769 metrictons a year ago."The trend was based on the rainfall pattern in 2001 which showedbelow-normal levels in the second semester in many areas particularlyduring the latter part of the year. This export trend is replicated insubsequent projections for other products namely, copra, copra meal anddesiccated coconut,"UCAP said in its revised forecast report.BusinessWorld earlier reported that preliminary data from UCAP show thatfor May, total coconut oil exports totaled 81,950 metric tons, declining44.79% from 148,442 metric tons shipped abroad in the same month lastyear.Industry sources said the continued slowdown in copra production causedthe sharp drop in coconut oil exports, which may continue for the rest ofthe quarter.The UCAP revised report also said that with the expected decline in localcoconut production this year, other coconut exports such as copra, coprameal, desiccated coconut and oleochemicals are also expected to decline involume."With projected output in 2002 declining, export is likewise forecast todrop by 31.6% to 1.665 million metric tons from last year. A shortfall inrevenue is likewise expected for the year with total export valueamounting only to $404.72 million, down by 21% from last year,"it said.UCAP said it expects the volume of copra exports to decline by 55%, coprameal exports by 31%, and desiccated coconut by 6.5%.

KUALA LUMPUR, June 26 (Bernama) -- The loan credits incurred outstandingby four countries under the Palm Oil Credit and Payment Arrangement(POCPA) now totalled RM542.7 million or US$142.82 million, said he deputyfinance minister, Datuk Dr Shafie Mohd Salleh, Wednesday.The four were Algeria, Iraq, Sudan and Cuba and the government waspursuing the outstanding amounts, he said.

IPOH, June 27 (Bernama) -- Consumer products-based Yee Lee Corporation Bhdis looking for bigger export markets, especially in Thailand and itsMekong River Delta neighbours, once the Asean Free Trade Area (Afta) comesinto effect next year.Deputy chairman and managing director Lim A Heng said the company washoping that Thailand would liberalise its import duty on palm oil productsnext year.

AHMEDABAD, 06/13/2002 (Asia Intelligence Wire)- The Rs 1,165-crore AdaniWilmar Ltd, the 50:50 joint venture between Adani Exports Limited andWilmar Holdings Pte Ltd, is planning to expand its edible oil refiningcapacity at Mundra from the existing 800 metric tonnes per day (mtpd).The expansion is being done mainly in preparation for the company's forayinto the southern market, which includes the four southern states, andOrissa in 2003, Mr Gautam Adani, chairman, AWL, told newspersons here onTuesday. He, however, refused to divulge the total cost of expansion asdetails were yet to worked out.The company is also in the process of delinking and doubling its vanaspatirefining capacity from the existing 100 mtpd to enable manufacture ofvalue added products like bakery shortening and speciality fats likemargarine.The vanaspati refinery expansion is being done at a cost of Rs 12 crore,which is in addition to the Rs 100 crore that AWL has invested so far inits edible oil refinery at Mundra.Adani Wilmar's Fortune brand of edible oil has grabbed a 9.7 per centshare of the total 18 lakh tonnes per annum branded refined oil market asper the April 2002 data of AC Nielsen ORG-MARG made available by thecompany.Fortune is followed closely by Agrotech with its Sundrop brand ofsunflower oil, which has an 8.8 per cent market share. The other brands inthe segment include Marico's Sweekar and Saffola, NDDB's Dhara, amongothers.According to Angshu Mallick, general manager, sales and marketing,soyabean oil consumption had gone up from 62.9 per cent in first quarterof 2001-02 to 173 per cent in the fourth quarter of 2001-02.AWL is a player in the refined edible oil market with sunflower, soyabean,cottonseed and groundnut oils under the Fortune brand, vanaspati under theRaag brand and refined palmolein under the Jubilee brand.

6/21/2002 (Europe Intelligence Wire) - Airing their views at the secondinternational conference 'Russia's Oils and Fats Complex' on Tuesday inMoscow, representatives of Russia's fat-and-oil complex expressed disquietregarding the country's upcoming membership in the World TradeOrganization.Russia joining the WTO means expansion of trade ties, and for thefat-and-oil section more free raw materials exports and imports ofvegetable oils and fats, which will lead to tougher competition on theRussian market, director of the all-Russia scientific research institutefor fats (St. Petersburg) Alexander Lisitsyn announced.Lisitsyn said that in such conditions effective sector functioning ispossible only in the event that its products give no ground to non-Russian-made products in terms of quality and pricing, and that volume andvariety of goods are able to meet the population's and industry's growingneeds.According to the latest research, consumption of fat-and-oil industryproduct in Russia is pretty low. In particular, vegetable oil consumptionis a per capita ten kilos per year against a recommended 13.6 kilos. Bycontrast, that figure is significantly higher; in Britain it is 18 kilosper year, in the United States and the Netherlands 25 kilos.Lisitsyn said he thinks that Russian enterprises making such products haveto increase production efficiency and product quality by means oftechnological modernization and new equipment, as well as automatingproduction processes.In the opinion of the vice president at Rosselkhozakademiya, YevgenySizenko, the domestic fat-and-oil sector finds itself in a difficultsituation as Russia's WTO membership draws ever nearer. Insufficientinvestment, he said, is resulting in many enterprises having to make dowith out-dated equipment, which has a telling effect on product qualityand variety. However, the main problem is that there is not enoughdomestically-produced raw material to go around.The main oil-bearing crop in Russia is sunflower, from which around 85% ofall vegetable oils is produced in the country. Two years ago, Russiaposted a 10-year record level of oil production - 1.375 million tonnes.That figure was down 10% the next year to 1.238 million tonnes of oil.Russia joining the WTO requires of the fat-and-oil industry that it workout new state standards for product-making, noted president of the RussianUnion of Dairy Sector Enterprises Vladimir Kharitonov. This notablyconcerns products that have complex raw material formulation, which areknown in Russia today as 'combined butter', and as 'spreads' around theworld. As a result, the Russian consumer confuses 'combined butter'-theproduction of which involves the use of cheaper vegetable fats-with creambutter. The producers of the latter incur losses due to unscrupulouscompetition from producers of the former.Russia currently produces around 1.5% of the world's oilseed and 11% ofits sunflower. The country produces roughly 11% of the world's vegetableoil.

SINGAPORE, June 19 (Reuters) - Asia's palm oil trade may see a drop involumes in coming weeks, with Indian buying gradually running out of steamand rising Argentine soy supplies making soyoil increasingly attractive,traders said on Wednesday.While improved U.S. weather has boosted U.S. soy crop prospects,pushing down Chicago Board of Trade soyoil prices, Argentine farmers areslowly but surely pushing more sales after the peso weakened against thedollar in the past few sessions."If we weigh the factors for palm oil, I think the situation is not allthat bullish. The Indians are in an overbought situation. China's demandis uncovered but they could look either way -- to Malaysia for palm or toSouth America for soyoil," a regional edible oils trader said.Another trader added: "Indian buying may not continue at the same paceand Pakistani traders feel the prices are too high."This echoed views of some India-based traders who said India's palm oilimports in July were expected to dip to 250,000-300,000 tonnes from320,000 tonnes in the same month last year.On June 6, Malaysian palm oil prices hit three-year highs, hoveringjust below the 1,500 ringgit a tonne mark, on hopes of tight globalsupplies and surging demand from China and India. But they have sincegiven up some of their gains.At 0733 GMT, the benchmark third-month September contract was up nineringgit at 1,433 ringgit ($377.11) a tonne after trading as low as 1,407ringgit.CBOT soyoil on Tuesday closed down 0.18 to 0.27 cent per lb, with Julydown 0.27 cent at 17.86 cents.Traders said palm oil may see fierce competition from soyoil as sellersin South America seek to unload stocks before new U.S. soy arrivals."We may not see that kind of rally again in palm oil prices which wesaw recently," said an edible oils trader. "We know that Argentina cannotafford to go on holding onto their stocks forever. They have to sell itbefore the U.S. hits the market."

KUALA LUMPUR, June 21 (Bernama) -- Austral Enterprises Bhd is hoping thatits innovative agronomic practice of mixing water and fertilser trapped insilt pits will help enhance the production of fresh fruit bunches (FFB) onoil palm estates.The company has embarked on marrying its expertise in water and fertilisermanagement by mixing both water and fertiliser in the silt pits which hadbeen dug on hilly terrain to prevent water run off.

KUALA LUMPUR, June 21 (Bernama) -- Island & Peninsular Bhd (I&P) hasproposed to set up a palm oil refinery and fertiliser plant, both inBintulu, Sarawak as part of its plantation expansion plans.Both initiatives would be undertaken via joint ventures involving Sarawakparties.I&P managing director, Dr Radzuan Abdul Rahman, said with theestablishment of the palm oil refinery it could add another RM100 millionto the group's turnover annually.Speaking to reporters after the I&P's AGM and EGM and Austral EnterprisesBhd's AGM Thursday, Radzuan said he hoped that the refinery could beginoperations in 2004 with a capacity of 1,000 tonnes a day.Radzuan said the refinery would cut down on the group's refinery costsinvolved when selling its palm oil.I&P could also gain the processing margin from the venture, he said.Currently, there is only one refinery operating in Sarawak, leavingsellers without much choice but to use them for processing, he said."The refinery would add value to our plantation portfolio. Currently, weare the net seller. Once we set the refinery, we can process on our own,"he said.Radzuan said I&P will have the majority stake in the refinery.--BERNAMA(The informations and opinions expressed in this article represent theviews of the author only. They should not be seen as necessarilyreflecting the views of Palm News)

18/6/2002 (The Star) - MALAYSIA’S position as the world’s largest palm oilproducer is under threat and might not last for very long if planters donot lower production cost and increase yields, a national seminar inKuching was told yesterday.“Our production cost is too high and yet our production per hectare islow.“Although researchers and smallholders have consistently proved that onehectare can produce up to 40 tonnes of fresh fruit bunches (FFB), thenational average is still below 20 tonnes,” according to the IncorporatedSociety of Planters (ISP) chairman Emerson Liau.He said the industry’s survival was at stake as Malaysia’s competitors hadvast tracts of good land, cheap labour and low production cost.“When the crude palm oil (CPO) price fell below RM700 per tonne last year,alarm bells were ringing everywhere,” he added at the opening of ISP’snational seminar.More than 500 participants from Malaysia and Indonesia are attending thetwo-day event themed Plantation management – back to basics.Liau attributed the country’s low yields to poorer soil, poor plantingmaterials and poor management.He said good management required more than just technical expertise andexperience; it needed close supervision of managers on the ground.“Managers need to walk the fields to see for themselves the realsituation.“Basic estate practices, like proper fertilising, regular harvesting,loose fruit collection, maintaining good field conditions, and repairingbroken bridges and bad roads, require the managers’ personal attention onthe ground.“Vehicle maintenance and repairs is another costly item that needs to beaddressed and cannot be done by remote control,” said Liau.Sarawak Chief Minister Tan Sri Abdul Taib Mahmud said in his openingspeech that the dismal national average yield of 19 tonnes of FFB and 3.5tonnes of oil per hectare had remained stagnant for the past 20 yearsalthough many private firms had achieved more than 23 tonnes per hectare.He said the government’s target was to increase the national average oilyield to 4 tonnes per hectare by next year, and 5.5 tonnes by 2010.

Saturday, June 15, 2002 (The Star) - OLEOCHEMICALS manufacturers currentlyoperating in the Pasir Gudang industrial estate will make investments ofabout RM300mil under their expansion programme within the next two years.Pasir Gudang local council president Tan Sri Muhammad Ali Hashim said theadditional investments were for downstream activities to cater for a risein demand for palm oil by-products.He said there were at present five to seven oleochemicals manufacturersproducing fatty acids, crude and refined glycerine, stearic acid andcuprylic acid in the area.Among the major manufacturers are Kulim (M) Bhd’s Natural OleochemicalsSdn Bhd and Pan Century Oleochemicals Sdn Bhd.Ali, who is also Johor Corp chief executive officer, said the palm oilby-products had wide applications including in food and beverageproduction and health and beauty products.“Demand for palm oil by-products has been strong as more and moreconsumers worldwide go for non-animal fats in their foods and otheritems,” he said after an appearance on a radio talk show in conjunctionwith the 25th anniversary of Pasir Gudang.He said most of the major food and beverage companies and beauty houses inthe world had been using the locally-produced palm oil by-products intheir finished goods.Ali added that the Pasir Gudang–based oleochemicals makers also cateredfor the domestic market, especially the food-based industry.He said Pasir Gudang had developed from a small fishing village into awell-planned industrial estate housing about 300 factories with 30,000employees.He said the Pasir Gudang local council covered an area of 8,923ha andthere was still a further 1,500ha slated for industrial development,including 1,000ha in the nearby Tanjung Langsat area.The 1,887ha Tanjung Langsat industrial park is being developed into apetrochemical hub at a cost of RM501mil by Johor Corp subsidiary,JohorTechnopark Sdn Bhd.The park envisages that petrochemical plants would account for 60% of itsactivities, with gas production, steel-making and marine andmarine-related industries accounting for the balance 40%.(The informations and opinions expressed in this article represent theviews of the author only. They should not be seen as necessarilyreflecting the views of Palm News)