Archived News

PORT DICKSON, May 20 (Bernama) -- Guthrie Bhd is confident of achievingthe group's 2525 vision soon, said group chief executive Tan Sri AbdulKhalid Ibrahim.

MUMBAI, May 15. (Financial Times Limited) - THE Agriculture Minister, MrAjit Singh's flip-flop over restrictions on import of soyabean oilproduced out of genetically-modified (GM) soyabean has evoked a wide rangeof reaction- from cynicism to ridicule on the one hand and praise on theother- in the vegetable oil industry and trade circles.From a very strident stand on the subject taken in the last couple ofmonths, the minister now seems to have considerably diluted his views onthe desirability of imposing restrictions. He now holds that it istechnically not feasible to distinguish soyabean oil from GM and non-GMsources, leading to conclusion that he has given up his initial aggressivestand. Business circles are wondering about the reasons for change ofstance.An official in the Ministry of Health recently confirmed that work oncomprehensive legislation for labelling of GM products was going on andthat it would perhaps take a few months before the law is finalised giventhe fact that a wide range of imported agricultural products (both bulkand processed) are from GM sources.Mr. Ajit Singh's statement in the Lok Sabha on Monday that it was notpossible to distinguish between GM and non-GM soyabean oil by availableanalytical methods has brought cheer among importers of edible oil. Largequantities of soyabean oil from Argentina have been contracted for and theconsignments are expected to arrive at regular intervals in the comingmonths. Welcoming the minister's statement, Mr D.N. Pathak, ExecutiveDirector of Indian Vegetable Oil Processors Association told BusinessLine, "I am happy our stand is vindicated. We had represented to thegovernment that technically it was not feasible to test soyabean oil forGM traits. Imports can now continue without avoidable uncertainties".The solvent extraction industry which had been vocal in its opposition tolarge-scale edible oil imports did not extend support to the proposedrestriction on soyabean oil on the ground that imports helped a largenumber of its members utilise their refining capacity.Also, apprehensions were expressed that any move to restrict low-pricedlow-duty soyaoil would immediately benefit palm oil, and producers inMalaysia would take undue advantage of the situation by jacking up prices.Logically, restriction on imported soyabean oil should benefit domesticsoyabean producers; but none of the organisations representing farmers'interests even thought it fit to react.Interestingly, a processing industry representative pointed out that thepurpose of imposing restriction, namely an increase in local prices ofedible oils in general, had been achieved over the last several weeks evenunder the existing liberal policy and therefore, the proposed restrictioneven if not implemented would not hurt anyone.There are, however, voices of dissent and despair. A senior representativeof the vegetable oil sector, on condition of anonymity, expressed dismayat the way trade and industry bodies shifted their stand on short-termconsiderations."A strong case has been made out for negotiating an upward revision in theWTO-bound low rate of 45 per cent customs duty on soyabean oil. We couldlose out if the opportunity is not utilised. It is up to the industry andtrade as a whole to take the matter forward in a constructive way," hesaid.

KUALA LUMPUR, May 21 (Reuters) - Main edible oil consumers, such as India,China and Pakistan, still favour palm oil because of higher soyoil pricesdespite harvests in Argentina, traders said on Tuesday.South American crude, degummed soyoil was last quoted at $623.50 atonne for June shipment C&F India after tax against $586 for crude palmoil (CPO). India, the world's largest edible oil importer, buys palm oilfrom Malaysia and Indonesia."If anyone has to make a choice today, obviously they would prefer tobuy CPO," said one trader in Kuala Lumpur.India's falling domestic stocks, seen at around 200,000 tonnes, and aseasonal decline in the arrivals of oilseeds from the summer crop, wereexpected to boost palm oil imports to 300,000 tonnes in May, up from200,000 tonnes in April, traders said.India would be buying crude palm oil and refine the oil domesticallybecause RBD palm olein was expensive at $736 a tonne C&F India, they said.Traders said chaos in Argentina's grain market, triggered by a plan bya major farm group to halt sale of grains and oilseeds, will restrictexports from the world's third largest soybean producer after the UnitedStates and Brazil.This will encourage buyers to turn to soyoil, a direct competitor topalm oil, said traders.

20 May 2002 (Business Times) -THE proposed RM12 billion project to doubletrack Peninsular Malaysia’s main railway lines, announced a year ago, ison hold until the Transport Ministry issues the “statement of need” tocontractors — India’s Ircon International Ltd and China RailwayEngineering Corp.Double-tracking refers to the construction of a new track parallel to theexisting one to enable uninterrupted two-way train traffic.Ircon, responding to an e-mail query by Business Times, said it is readyto proceed with the project, but had not received the document whichspecifies the broad technical parameters and contract conditions for theproject from the Transport Ministry yet.Its managing director B.S. Kapur said the “statement of need” will pavethe way for the project to start by the middle of next year.The agreement for the project was supposed to have been signed lastDecember, but it has been delayed due to a variety of reasons.Among these are difficulties in costing. The RM12 billion is supposed tobe paid for in kind, that is palm oil, rather than cash.The fluctuating price of the commodity has complicated the process ofestimating how much will be needed to finance the project, according toindustry observers.“The statement of need by the Malaysian Government may be issued to Irconby end-May and it will form the basis of Ircon’s proposal,” Kapur said.“Ircon will then be given eight weeks to submit its technical andfinancial proposals to the Government.“This will be followed by negotiations which will culminate in anagreement between the Malaysian Government and Ircon,” said Kapur.Malaysia endorsed the participation of China and India in the railwayproject under a RM12 billion counter-trade programme involving payment incrude palm oil for work done.The endorsement was pledged in a memorandum of understanding, which wassigned during Indian Prime Minister Atal Behari Vajpayee’s official visitto Malaysia.The deal will see the delivery of some 8 million tonnes of the commodityover a period of five to six years to both India and China.Malaysia has agreed to parcel out the project to Ircon and a consortiumled by China Railway Engineering Corp.Ircon, which is a state-run engineering and construction firm, willundertake double-tracking and electrification works for the northern gridspanning 338.8km that links Ipoh with Padang Besar. The parcel isestimated to be worth RM6 billion.China Railway and local partners — DRB-HICOM Bhd, Emrail Sdn Bhd and KienHuat Group — will work on the 297km southern grid linking Seremban andJohor Baru, also valued at RM6 billion.The railway forms part of the Trans-Asia Rail Grid stretching fromSingapore to Kunming in south China.“The Ipoh-Padang Besar project has many complex features so thenegotiations are likely to be time-consuming,” Kapur said.He was unable to comment on when the project would get going as it is inthe hands of the Transport Ministry.“It is, therefore, not possible for us to indicate when the agreement willactually be signed and when work on the project will actually commence,”according to Kapur.He did say, however, that a field survey and data collection are alreadybeing carried out by Ircon’s 27 workers based in Malaysia.“Taking into account the time period of about five to six months foracquisition of land by the Government, the actual construction in thefield may start by middle of 2003,” said Kapur.He confirmed the funding for the project would be against export of palmoil to India. However, the actual modalities have yet to be worked outbetween Ircon and the Government.He said the likely cost of the project would be known only after thestatement of need, which would indicate the detailed specifications, isreceived.On a separate issue, Kapur said the project would not be delayed eventhough Ircon’s former managing director Shri Arun Prasada is underinvestigation by the Indian authorities for alleged graft.There was an article in the Indian Express on March 9 this year which saidthe project may be delayed due to the investigation, but Kapur firmlydenied it.“The investigation in question is due to certain procedural lapses and itwill not have an effect on the execution of the project,” said Kapur.He said Ircon is a public sector undertaking under India’s RailwaysMinistry and the selection as well as superannuation of senior executivesof Government undertakings follow well laid out procedures by the IndianGovernment.“There is no question of external influence having any role to play inthese procedures and the previous managing director Arun Prasada hassuperannuated on January 31 2002 on attaining the age of 60 years as perGovernment rules,” said Kapur. To strengthen Ircon’s commitment in theproject, Kapur said the company has already set up a strong team inMalaysia headed by project director Shri A.P. Mishra, a senior railwayofficer with over 25 years of experience.Ircon first started operations in Malaysia in 1988 and has completed twoprojects which include double-tracking a 10km railway line in the Port ofTanjung Pelepas, Johor.Headquartered in New Delhi since 1976, the company is currently leasing 30locomotives to KTM Bhd.India has one of the world’s oldest and largest rail networks with 7,000trains plying its 130,000km tracks in a day carrying 12 millionpassengers.

PORT DICKSON, May 19 (Bernama) -- The government was Sunday asked toabolish the 20 per cent quota on the export of palm oil.Guthrie Berhad Group chief executive Tan Sri Abdul Khalid Ibrahim said itwas time to abolish the export quota and have an open market."I think it's time for Malaysia to be more internationalised. In fact theWTO (World Trade Organisation) has asked us not to put any curbs on ourexports," he told reporters after taking part in the group's tenniscompetition, here.He said that if Malaysia did not lift the quota it would face curbs fromother countries.For example, he said, Indonesia had reduced its quota to less than fiveper cent compared with 80 per cent previously."So Indonesia's exports will be more than ours...and our country's overallearnings will also be reduced," he said.He also said that with the quota, there would be too much stock in thecountry, and the prices would fall.He said Malaysia now produced more than 12 million tonnes of Crude palmoil a year.He added that the government should be proactive in the matter so thatMalaysia could continue to compete in the world market. --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)

17 May 2002 (Business Times) - MALAYSIA and Indonesia are expected tobenefit from a squeeze in vegetable oil supplies in China due to severeweather conditions in the republic.Malaysian Palm Oil Association chief executive M.R. Chandran said China isexpected to face a shortfall of between 500,000 tonnes and 750,000 tonnesin its current rapeseed harvest.“This will put pressure on the republic to increase its intake of palm oilfrom Malaysia and Indonesia in the next month or so,” Chandran toldBusiness Times in Kuala Lumpur yesterday.“Probably for this reason, China held back purchases earlier in theyear... it wanted to wait until rapeseed harvesting started, then decideon imports,” he said.China was the third biggest buyer of Malaysian palm oil last year, taking1.28 million tonnes worth RM1.23 billion.India and the European Union were the top two customers last year, buying2.03 million tonnes and 1.601 million tonnes, respectively.According to the Malaysian Palm Oil Board website, palm oil exports toChina were a sluggish 40,573 tonnes in January before surging to 136,712tonnes in April.“Should monthly sales to China be maintained at the 150,000-tonne level, Iam optimistic total exports to the republic will hit 1.6 million-1.8million tonnes this year,” Chandran added.China capped palm oil imports at 1.4 million tonnes last year but hasincreased the quota to 2.4 million tonnes for this year following itsformal entry into the World Trade Organisation in December 2001.Malaysia and Indonesia are the world’s top two producers and exporters ofpalm oil respectively.Last year, Malaysia produced 11.803 million tonnes of the commodity, ofwhich 10.61 million tonnes were exported to 140 countries. Indonesiaproduced 7.48 million tonnes and sold 4.8 million tonnes abroad.

20 May 2002 (Business Times) - PALM oil, whose prices are improving oflate, is now less popular in India where the vegetable oil is slapped witha higher duty than arch-rival soyabean oil.

14 May 2002 (Businessn Times) -MALAYSIA’S estimated 1.2 millionsmallholders may fully consolidate as a single force at least by 2007 as apreparation to face fierce competition brought about by globalisation.Agriculture Minister Datuk Dr Mohd Effendi Norwawi said the consolidationwave in Malaysia has begun but it will be between three and five yearsbefore all smallholders fully realise the need to consolidate.“To date, a total of 200,000ha farms involving 160,000 farmers in 4,500projects have paved the way by consolidating,” Mohd Effendi told reportersin Kuala Lumpur yesterday.“Of the 4,500 projects, about 660 involving 20,000 farmers have undergonethe ISO 9002 accreditation process.“I admit that it is not going to be an easy task consolidatingsmallholders but hopefully these 20,000 farmers can lead the way and set aprecedence to others,” said Mohd Effendi.Earlier, he opened a seminar on challenges facing smallholders all overthe world as they move towards globalisation.Efforts to consolidate smallholders’ plots of land, which are mostly lessthan 1ha with crops such as rubber, oil palm, fruits and poultry, have notbeen easy to be implemented.This is due to the fact that smallholders are generally comfortable withtheir old agricultural, management and planting methods, causing them tobe reluctant or slow in accepting changes.Furthermore, various government ministries and agencies have not beenstreamlined to merge the smallholding sector.Rubber smallholders, for example, are under the care of the RuralDevelopment Ministry but the commodity itself comes under the purview ofthe Primary Industries Ministry.Furthermore, a smallholder’s land may have several benificiaries whichcomplicate matters should the titleholder pass away.“Paddy farmers, for example, may hang on to the subsidy mentality becausethey knows the Government will help them should prices fall.“But I don’t see them surviving if they hang on to traditional methodsbecause globalisation will set in and they have to compete with otherpaddy producers,” said Mohd Effendi.He added that the only way smallholders can compete in the world marketagainst large, efficient and professionally-run global companies is bygrouping together.“Scattered farms which merge as a single farm with a central managementemploying the best agricultural practices, technology, mechanisation andmanagement can increase productivity, quality and reduce cost,” MohdEffendi said.He added that the Government will not rest on its laurels and will furthercontinue to step up efforts to upgrade the sector, which includesapplication of biotechnology, precision agricultural production andcontrolled-environment farming.

14 May 2002 (Business Times) - PLANTATION-based TSH Resources Bhd willinvest about RM40 million to construct a 10- megawatt (MW) biomass powerplant in Sabah.“We are currently negotiating with the State Government to sell a portionof the power we produce and, if everything goes well, the plant will startoperations in the third quarter of 2003,” said group managing directorDatuk Kelvin Tan.He said the power plant will use the empty fruit bunches (EFB) from itstwo existing palm oil mills, which produce about 700 tonnes of EFB a day.“With the biomass plant, the company will be able to turn waste intoenergy and will generate income from it,” Tan said.He added that the additional income will benefit TSH Resources and enhanceits competitiveness in the oil palm industry.TSH Resources currently generates 1MW of biomass energy for usage in itsmills.“We are also planning to build another palm oil mill in Sabah, which willhave a capacity to process 450,000 tonnes of fresh fruit bunches (FFB) ayear,” Tan said.The new mill, which will be operational in the first quarter of 2003 andcost about RM25 million, will be the biggest in the company and will boostits processing capacity to a total of 1.05 million tonnes of FFB a year.Tan said the company is also trying to promote the use of hardwoodflooring in Malay-sia. “Our subsidiary, TSH Ekowood Sdn Bhd, currentlyexports over 90 per cent of its products. Initially, we hope to increaselocal sales to 10 per cent,” he said.TSH Ekowood is the largest hardwood flooring manufacturer in Malaysia,producing 12 million sq ft of products and contributing about 40 per centto the group’s earnings.Tan was speaking to the media after signing an agreement for an Islamicprivate debt securities scheme with Aseambankers (M) Bhd and four otherunderwriters.Aseambankers is the adviser and lead arranger for the programme whileAffin Discount Bhd, Malaysia Discount Bhd, Maybank Discount Bhd andMalaysian Trustees Bhd are the underwriters.Under the programme, TSH Resources will raise RM100 million through theissuance of Al-Murabahah Commercial Papers and Medium Term Notes.“For now, the amount of RM100 million (to be) raised plus our internalfunds will be sufficient for the company to carry out all its expansionplans,” Tan said.Despite the fund-raising exercise, the company’s gearing level will remainlow at 0.4 times by the end of the year.The tenure of the programme is up to seven years from the date of thefirst issuance. During the period, TSH Resources can issue commercialpapers (CP) of between one and 12 months and medium term notes (MTN) ofbetween one and seven years.Malaysian Rating Corp Bhd has assigned a long-term rating of A+ for theMTN and a short-term rating of MARC-2 for the CP.On the Kuala Lumpur Stock Exchange yesterday, TSH Resources shares weretraded 1 sen higher at RM2.12 with 19,000 shares changing hands.

PARIS, May 16 (Reuters) - French oilseeds and protein producers onThursday condemned the new U.S. farm bill boosting crop and dairysubsidies and urged the European Commission to fight back, possibly withinthe World Trade Organisation (WTO)."The new U.S. farm law is totally blameworthy because it totally floutsthe commitments made at the WTO," Xavier Beulin, President of the Frenchoilseeds and protein growers' group FOP told Reuters at the margin of itsannual congress in Paris."It's not the moment for the European Union to drop its guard," headded.U.S. President George W. Bush on Monday signed a six-year law boostingcrop and dairy subsidies by 67 percent, adding an estimated $6.4 billion ayear to farm spending and marking a further retreat from free-marketreforms begun in 1985.The fatter subsidies will become available at harvest -- just weeksaway for the drought withered winter wheat crop.The FOP said it was shocked the U.S. farm bill incorporatedmarketing loans which in its view are against international trade rulesand should be challenged at the WTO.Beulin said that the European Oilseeds Association (EOA), that heheads, would soon lodge a complaint called 'regulation for trade obstacle'to the Commission on the U.S marketing loans for soybeans growers.The lobby's complaint could speed up action at EU level as it wouldforce the EU executive to give, within a short period of time, its opinionon the rightfulness of launching a panel at the WTO on the perverseeffects of the soybeans marketing loans.

NEW DELHI, May 16 (Reuters) - India announced on Thursday that it hadraised the base import price of crude palm oil to $344 from $314 a tonne.India, the world's largest edible oil importer, mainly buys palm oilfrom Malaysia and Indonesia and soybean oil from Argentina and Brazil.It said in a notification that the base import price of refined,bleached and deodorised (RBD) palm oil had also been hiked to $365 from$341 per tonne.The government raised the base price of RBD palm olein to $375 a tonnefrom $349.It fixed the price of crude palm olein at $362 a tonne from theprevious $334.The government had left the base import prices unchanged in an earliernotification issued early May.India fixes the base prices to check loss of revenue due tounder-invoicing by some importers.Traders pay import duties on tariff values fixed by the governmentirrespective of the price at which they purchase oils.The country imposes a basic import levy of 85 percent on refined oil,65 percent on CPO and 45 percent on soybean oil.

WASHINGTON 5/14/2002 (AP)- President Bush on Monday signed a $190 billionfarm bill guaranteeing higher subsidies to growers in Midwestern andSouthern states where key political races will decide which party controlsCongress next year.At an early morning ceremony, Bush said the six-year bill ``will provide asafety net for farmers, and will do so without encouraging overproductionand depressing prices''- a position contrary to what administrationofficials argued when the bill was being written.The subsidies could help Bush in his quest to win back control of theSenate for the GOP, while giving him a chance to rack up IOUs for his own2004 re-election effort.``If he had vetoed it, it would have been very disappointing,'' saidMinnesota farmer Nathan Johnson. ``In the 2000 election, almost all of theagricultural areas voted for President Bush. They expected his support ...and we certainly have gotten it.''Some senators already are making plans to provide farmers with even moremoney this year in the form of a disaster-aid package for weather-relateddamage to 2001 crops.The new farm law will increase spending by nearly 80 percent over the costof continuing existing programs at a time when the president has beencalling on lawmakers to show fiscal restraint. The bill is estimated tocost $190 billion over the next 10 years, although the programs must berenewed after six.The signing ceremony was scheduled for 7:45 a.m. EDT, assuring widecoverage by farm broadcasters while minimizing exposure elsewhere in thecountry. Bush said his timing was a nod to farmers who get up early everyday to produce America's food. He was flanked by farm-state lawmakers fromboth parties who hope to benefit politically from the measure.Bush senior political adviser Karl Rove had told GOP senators recentlythat Bush would not stage a high-profile signing ceremony to avoidantagonizing conservatives upset with the bill's price tag, a personfamiliar with that meeting said.``It looks as though Bush is concerned about allowing the Democrats tocreate some domestic issues,'' said political analyst Stuart Rothenberg.Republicans have been burned by farm issues before: In 1986, unhappinesswith GOP farm policy helped Democrats win at least two Senate seats. Inthe heat of the 1998 campaign, President Clinton vetoed a GOP farm-aidpackage and forced lawmakers to add substantially more money.Ken Cook, a critic of the bill who is president of the EnvironmentalWorking Group, said Bush was in a no-win situation. ``Certainly, it was aloser to stand on principles here when the politics are so overwhelming.''One of the bill's biggest beneficiaries is expected to be SenateAgriculture Committee Chairman Tom Harkin, an Iowa Democrat facingre-election this fall who stood behind Bush during the ceremony. Harkinsaid the bill ``is the economic plan for rural America.''The administration had complained that both Senate and House bills fromwhich the final law was fashioned would encourage price-depressing cropsurpluses. Some Republicans implored him to veto it even after the signingceremony was scheduled.The European Union, Canada, Australia and other countries also havecriticized the bill, saying the larger subsidies would harm U.S. effortsto lower international trade barriers.``I would love to see him veto it. It is a budget buster,'' Sen. DonNickles, R-Okla., said on ``Fox News Sunday.''The bill gives farmers incentive to overproduce, Nickles said, predictingit will eventually force farm prices down. ``I don't think that helpsfarmers in the long run,'' he said.The farm bill raises subsidy rates for grain and cotton growers andrevives a target-price system abolished by the 1996 Freedom to Farm law toprovide supplemental income when commodity prices are below certainlevels.The bill also brings back subsidies for wool and honey producers andprovides new payments for milk, peanuts, lentils and dry peas. Farms thatraise livestock and produce will benefit from an 80 percent increase inspending on land-conservation programs.Support for the 1996 law dropped after commodity prices plummeted in 1998and Congress responded with a series of annual bailouts of the farmeconomy. The new law, which essentially continues those bailouts,initially was expected to cost about $170 billion over the next 10 years.However, weaker-than-expected commodity prices are now expected to causecrop subsidies to rise and push the cost up.