Archived News

HAMBURG, April 9 (Reuters) - Global palm oil stocks at the end ofcalendar year 2002 will fall to a four-year low of 3.14 million tonnes,Hamburg-based newsletter Oil World estimates.This compares to 3.75 million tonnes at the end of 2001.The reason is slowing palm oil production growth and risingconsumption. The newsletter estimates global 2002 output at 23.68 milliontonnes against 23.36 million tonnes in 2001.The 300,000 tonne rise in 2002 compares to average annual rises of 2.1million tonnes in the last three years, it said.Background is the downturn of the biological yield cycle of palm treesafter the strong production growth in the past few years plusbelow-average growth in Malaysia's area of mature trees."This slowdown will considerably squeeze export availability and willalso lead to a substantial reduction in world palm oil stocks," Oil Worldsaid.It expects main inventory reductions to take place in Malaysia, whereit estimates stocks on December 31, 2002, at 900,000 tonnes against1,214,000 tonnes on December 31, 2001.Global 2002 palm oil consumption is set to rise strongly to 24.59million tonnes from 23.62 million tonnes in 2001, it forecast.

KUALA LUMPUR, April 9 (Reuters) - India, the world's largest edible oilimporter, has booked up to 200,000 tonnes of palm oil from Malaysia andIndonesia so far in April to replenish its dwindling stocks, traders andfreight brokers said on Tuesday. "I think bookings to India are within therange of 180,000-200,000 tonnes so far this month," said one freightbroker."I would say India will be buying 230,000-270,000 tonnes for the wholeof April," said the broker, adding that India normally purchases around200,000 tonnes of palm oil a month from Malaysia and Indonesia, theworld's largest producers. Some traders speculated that India's palm oilintake had been slow in March because it had thought China, another mainbuyer, would hold back new import licences which would depress prices.India bought 109,290 tonnes of palm oil from Malaysia in March, downfrom 112,740 tonnes in February.But Kuala Lumpur dealers trading with China said on Tuesday Beijing hadissued new import quotas last week which totalled two million tonnes, upfrom 300,000 tonnes it released in late March.China is set to import 2.4 million tonnes of palm oil in 2002 followingits entry to the World Trade Organisation (WTO).Some traders said India's palm oil imports could touch 300,000 tonnesin April because of the low stocks, seen far below the monthly 600,000tonnes, and uncertainties in Argentina's soy oil exports.Traders said Argentina's decision to increase export tax rates ongrains, oilseeds and sub-products to 20 percent from 10 percent willlikely lead to a reduction in soy output and exports.The government has forecast 2001/02 soy output at 28.7-29.5 milliontonnes.

KUALA LUMPUR, April 11 (Rueters)- Our final estimate on CPO production inMarch shows an upward revision of 20,000 tonnes to 885,000 tonnes. Thisrepresents an increase of 112,000 tonnes or 14.4 percent over February.The stronger than expected increase was attributed mainly to excellent oilextraction rates (OER). This was most evident in Sabah, the largestproducing state. Average oil extraction rates in the state surged 0.75percentage point or 3.6 percent to a record 21.7 percent. Several millsobtained exceptional oil extraction rates of 24 percent. Some plantationsattributed the excellent oil rates to near ideal weather conditions duringthe month.Overall oil extraction rates for the country at an estimated 20percent - up from 19.2 percent a year ago - was an all-time record highfor the month. CPO production in Peninsular Malaysia rose by around 15percent or slightly better than the increase of around 13 percent in EastMalaysia.For the first three months this year, CPO production amounted to 2.59million tonnes. This represents a contraction of 8.6 percent when comparedto the same period last year. Output in terms of fresh fruit bunches(FFBs) fell an estimated 12 percent while yield in terms of FFBs/hectarecontracted 15 percent.The estimate on palm oil offtake in March remains unchanged at onemillion tonnes. In line with the upward revision in production, theestimate on palm oil stocks at end-March is thus scaled upward to 1.18million tonnes. This represents a drop of about 100,000 tonnes from thepreceding month. It also means the bottom-line is little changed from ourMarch 21 estimate as the better-than-expected offtake was matched byhigher-than-expected supply.The downtrend in stocks of PK/PKO, oil basis, continued in March,albeit at a much slower rate of an estimated 6,000 tonnes. This compareswith month-on-month declines of around 14,000 tonnes in February and22,000 tonnes in January. Production of PK in March is estimated to haveincreased 30,000 tonnes or 13.5 percent to nearly 252,000 tonnes.China's State Development Planning Commission (SDPC) commenced todistribute TRQs for palm oil and other commodities since last Friday,April 5, or six weeks after it started to receive applications for thequotas. The SDPC had so far declined to reveal the exact quotasdistributed. Some traders closely linked to Chinese importers were advisedthe full 2.4 million tonnes quota for palm oil were released of which 66percent or 1.58 million tonnes went to private firms.However, state-owned enterprise which received the balance werebelieved to have been told by senior government officials to go slow inutilising their quotas. The protracted delays in the distribution ofquotas had resulted in an estimated 250,000 tonnes palm oil jammed up atvarious customs points. It would take some weeks before the cargoes couldbe discharged/cleared. MPOB figures show Malaysia's shipped 201,000 tonnespalm oil to China in January-February. By the end of March the quantity isestimated to have reached 395,000 tonnes or some 130,000 tonnes more thanthe corresponding three-month period of last year. Inclusive of shipmentsfrom other countries, the aggregrate quantity is estimated at 486,000tonnes or an average of 162,000 tonnes/month. A simple extrapolationsuggests total palm oil imports by China this year should at least reachtwo million tonnes or not less than the quantity taken last year.Palm oil price continued to be range-bound and appeared ratherresilient, as reflected in the steady to firm undertone in CPO futuresduring the greater part of yesterday after cargo surveyors reported alarger than expected drop in shipments in April 1-10. The June contractsettled at 1,176 ringgit, up 16 ringgit for the day.

12 April 2002 (NSTP)PERSATUAN Penapis Minyak Sawit Malaysia (Poram) mencadangkan kerajaanmenjelaskan dasar semasa dan masa depan eksport minyak sawit mentah (MSM)bebas cukai memandangkan bekalannya yang dijangka berkurangan.

KUALA LUMPUR, April 11 (Bernama) -- The Palm Oil Refiners' Association ofMalaysia (PORAM) has proposed that the 5.0 percent duty for products suchas bleached palm stearin, refined palm stearin and neutralised palmstearin, be abolished or reclassify under other palm oil products tariffcode that do not carry any export duty.

HAMBURG, April 2 (Reuters) - China may need to raise palm oil exports inApril/June to prevent domestic edible oil supplies becoming too tightafter the introduction of new import restrictions, Oil World said onTuesday.China introduced import licences for genetically modified (GM) foodssuch as soybeans on March 20.Extra soybean imports were made before that date, but those shipmentswere relatively small and supplies were stored far away from major centressuch as Shanghai and southern coastal areas, the Hamburg-based newslettersaid."A pronounced tightness is looming in the Chinese market for May andJune unless sufficient import licences for soybeans and/or sufficientquotas for imports of palm oil or soybean oil are given," it said.It added: "Available supplies of oilseeds, oils and meals will be usedup more quickly than generally assumed...action by the government isneeded soon to prevent domestic supplies from becoming too tight in May,June and July."Palm oil could be the main beneficiary as the forthcoming squeeze inChina's domestic oil supplies may result in a pickup in Chinese palm oilimports in the April/June quarter."

HAMBURG, April 2 (Reuters) - Lack of rain in Malaysia is reducing thecountry's palm oil production, Hamburg-based newsletter Oil World said.It sees the country's palm oil output in calendar year 2002 at 11.5million tonnes, down 300,000 tonnes on the year."At the moment we expect a considerable downturn in Malaysian palm oilstocks to 980,000 tonnes as of end-September 2002 against 1.22 milliontonnes one (year ago) and 1.37 million tonnes two years earlier," thenewsletter said.Lack of rain in leading Malaysian production areas will have an impacton yields and production during both 2002 and 2003, it said.The extent is still unknown and will depend on whether the rain neededcomes soon or whether dryness continues, it stressed.In March, Oil World estimated that combined global stocks of the 17main edible oils and fats will at end-September 2002 fall by 1.3 milliontonnes on the year."We therefore expect oil prices to appreciate during the remainder ofthis season, probably under the lead of palm oil," it said.

09 April 2002 (Business Times) - THE Government’s relentless effort toboost the country’s commodity sector has been fruitful as smallholdershave benefited by earning better income.Primary Industries Minister Datuk Seri Dr Lim Keng Yaik said theGovernment will not rest on its laurels as more unilateral measures willbe undertaken down the pipeline.“Prices of natural rubber (NR), palm oil and cocoa had all improved withinthe last few months,” Dr Lim told reporters in Kuala Lumpur yesterday.Dr Lim had earlier addressed staff of his ministry at its monthlygathering and distributed pledge of allegiance “Aku Janji” certificates tothem.“For example, NR prices such as SMR 20 have improved 50 per cent to RM2.71a kg last week from RM1.81 a kg in December last year,” he said.He added that cocoa prices have also improved, reaching a RM5,000 pertonne level, while palm oil prices are also attractive hovering between aRM1,100 and RM1,150 per tonne level.Prices of palm oil were severely battered for the most part of last year,hovering at a RM800 per tonne level due to weak demand and oversupply.“I am confident prices of the commodities can improve further,” he said.Other commodities under the care of the ministry also include timber,tobacco, tin and minerals.The world’s NR producers formed the International Tripartite RubberOrganisation (Itro) last December in Bali, Indonesia, aiming to boostprices.Itro, which groups Thailand, Indonesia and Malaysia — the world’s topthree, respectively, plans to cut NR production by 4 per cent and curbexports by 10 per cent by year-end.Traders said under the plan, an estimated production cutback and exportcurb of 170,000 tonnes and 380,000 tonnes, respectively, can be seen to beremoved from the market.“In fact, the consortium is nearing completion and we are in the finalprocess to implement the US$225 million (US$1 = RM3.80) consortium tomanage, buy and stockpile NR,” said Dr Lim.Dr Lim added that Malaysia will continue to boost the sector and explorenew markets by embarking on various trade initiatives such as hold tradeseminars and promotions.Malaysia is the world’s biggest producer of palm oil, third biggestproducer of NR, tenth largest furniture maker, eight biggest cocoaproducer and, at one time, the biggest tin producer.

NEW DELHI, April 3 (Reuters) - India, the world's largest edible oilbuyer, on Wednesday signed an agreement with Indonesia under which NewDelhi will supply palm crushing and milling technology in exchange forpalm oil and other products.The agreement, signed during Indonesian President MegawatiSukarnoputri's visit to New Delhi, was one of nine agreements signedbetween companies of the two countries.The agreements, covering a raft of sectors including railways,pharmaceuticals, communications, information technology and hospitality,were signed after an address by the Indonesian leader to Indian industry."The value of palm crushing and oil mills to be supplied by India wouldbe set off against purchase of palm oil and palm products or any otherproduct to be identified for imports by MMTC," S.D. Kapoor, chairman ofIndia's state-run trading firm MMTC Ltd, told Reuters.Indonesia and Malaysia, the world's leading palm oil exporters, havebeen lobbying with India to boost the sale of palm oils.But India's palm oil imports have fallen since New Delhi imposed asteep import duty of 75 percent on crude palm oil (CPO) and 85 percent onrefined palm oil in its federal budget last February. The duties comparewith 45 percent for crude soyoil and 50.8 percent on refined soyoil.The two nations want New Delhi to create a level playing field bybringing palm oil duty on a par with soyoil but India has not made anycommitment.Palm oil made up 60 percent of India's total edible oil imports in2000/01 (Nov-Oct), down from 68 percent a year earlier. During the sameperiod soyoil imports rose to 31 percent from 15.3 percent.

JAKARTA, April 8 (Reuters) - Indonesia hopes to supply at least 750,000tonnes of palm oil to China this year following Beijing's increased importquota, a senior agriculture ministry official said on Monday.China has increased its import quota for palm oil to 2.4 million tonnesin 2002 from 1.4 million tonnes last year, following its entry into theWorld Trade Organisation (WTO)."There's a huge increase in Chinese demand for palm oil, reflected bythe increased quota. We are targeting to sell at least 750,000 tonnes toChina this year," Director General of Agriculture Products DevelopmentIskandar Andi Nuhung told reporters.Indonesia is the world's second largest palm oil producer afterMalaysia.Indonesia's exported 430,000 tonnes of palm oil to China in 2001,Nuhung said.China imposes quotas on edible oils to limit imports.Last week, China said it had issued the bulk of private firms' low dutyfarm import quotas including those for corn, wheat and edible oils.Nuhung said a number of Chinese palm oil importers would visitIndonesia soon to meet their suppliers and study the palm oil industryhere.President Megawati Sukarnoputri asked China to open its market to moreIndonesian palm oil products when she visited Beijing last month, headded.

09 April 2002 (Business Times) - THE PRIMARY Industries Ministry welcomesany counter-trade arrangements involving palm oil as it will help boostuptake of the commodity as well as enhance its standing overseas.“The ministry is more than willing to play its part in facilitating theinitiative as it will help penetrate new markets,” its minister Datuk SeriDr Lim Keng Yaik told reporters in Kuala Lumpur yesterday.Dr Lim had earlier addressed staff of his ministry during its monthlygathering and distributed pledge of allegiance “Aku Janji” certificates tothem.Prime Minister Datuk Seri Dr Mahathir Mohamad had said last month thatMalaysia may partly pay the purchase of Poland’s PT-91 battle tanks in theform of palm oil.The counter trade of palm oil and palm oil products is not new forMalaysia as several arrangements had been made in the past.In 1994, Malaysia bought 18 MiG-29 Fulcrum fighter jets for a total ofUS$600 billion (US$1 = RM3.80) under an offset programme.It involved a cash payment of US$450 million, palm oil and palm oilproducts (US$95 million) and supply of other Malaysian products (US$55million).In October last year, US multinational, General Electric International,signed a US$60 million agreement with Keretapi Tanah Melayu Bhd (KTM)involving the purchase of 20 high-powered “Blue Tiger”.Under the deal, the locomotives are to be delivered beginning April 2003in exchange for 200,000 tonnes of palm oil and palm oil products valued atUS$60 million, to be delivered by the Pasir Gudang Edible Oils Group.The Government is also eyeing fighter jets from both the US and Russia, ofwhich Dr Lim had said last year that he attempted to squeeze at least 20per cent of the payment to be in the form of palm oil.Malaysia had also in May last year endorsed the participation of bothIndia and China in the double-tracking project which comes under a RM12billion counter-trade programme to promote demand for palm oil.The counter trade will see the delivery of around eight million tonnes ofpalm oil over a period of between five and six years to each country.Under the programme, India and China will undertake double-tracking workswhich involve the payment for rail contracts in crude palm oil.“Even though, the counter trade idea was suggested two years ago I hopethat the Transport Ministry and KTM would not have forgotten about it bynow.“The initiative can help the country’s economy as well as boost income ofsmallholders,” said Dr Lim.

KUALA LUMPUR, April 4 (Bernama) -- A major change is shaping up for palmoil as the growth in the commodity's production is slowing downconsiderably and global stocks seem likely to decline sharply.