Archived News

NOTE: CPO mentioned in first para. is Palm Oil (PO) and not crude palmOil (CPO). 300,000 tonnes is refer to allocation allowed so far by Chinato exporters of palm oil. Malaysian exports to China from Jan. to Feb. isonly 109,984 tonnes.

KUALA LUMPUR, April 4 (Bernama) -- Prices of soya oil and palm oil havenot shown the anticipated recovery since early January despite theprospective decline in stocks and tightening supplies.

05 April 2002 (Business Times) - CHINA will enter Malaysia’s palm oilmarket by end-April as its agriculture sector will no longer be able tocope with strong domestic demand.Hamburg-based Oil World editor Thomas Mielke said China will open itsdoors and start importing within the next four to six weeks.“Oil World’s assessment is that the current restrictive import policy ofChina cannot be sustained because demand is so strong,” Mielke toldreporters in Selangor yesterday.Mielke had earlier given a talk on the commodity’s outlook, organisedunder the programme advisory committee (PAC) seminars.PAC comprises international and local experts of the world’s 17 edibleoils and fats. It advises the Malaysian palm oil sector on the next bestcourse of action.“The satisfaction of demand for oils and oil meals will make it necessaryfor China to change import policy anytime soon,” said Mielke.China, Malaysia’s third biggest buyer last year at 1.28 million tonnes haspledged to buy 2.4 million tonnes of palm oil following its formal entryinto the World Trade Organisation on December 12 last year.The amount is higher by one million tonnes from its traditional annualpurchase of 1.4 million tonnes.The industry had speculated that China would initiate its palm oilpurchase following the expansion of its import volume.Traders have widely speculated that China would start its buying spree asearly as January, a move that was not made till yesterday.China’s State Development and Planning Commission was supposed to announceabout 10 authorised importers from the private sector by March 7., but hasyet to do so.“The temporary interruption of imports was because the Chinese Governmentwants to raise domestic prices so that farmers will plant larger acreageof oil seed crops this spring (April and May),” said Mielke.He added that the move has worked so far as prices have increased in Chinaand farmers have responded positively to the Government’s policy ofpromoting domestic production.“But China’s agriculture sector is by no means in a position to satisfy agrowing domestic demand base.”He said it is difficult for domestic production to keep pace with demandin the medium and longer term as China’s import dependance on oilseeds,oils and oilmeals will rise.“So the interruption in announcing the quota is temporary to raisedomestic prices,” said Mielke.Industry observers had said last month that the delay was partly anindirect trade reprisal on the US for raising steel tariffs to 30 percent.The US is a major producer of soyabean oil and has interests in otherproducing countries such as Argentina and Brazil.The reprisal against soyabean oil has inadvertently affected palm oil aswell.Meanwhile, a trader said that China was already in the market but did notwant to make it official to benefit from the current low prices.“By announcing its intention to come into the market, palm oil prices willno doubt rally,” said a trader.At the Malaysia Derivatives Exchange yesterday, the benchmark third-monthJune delivery closed RM2 lower at RM1,155 a tonne.April, May and July deliveries each closed RM2 lower at RM1,145, RM1,149and RM1,157 a tonne respectively.Volume eased 568 lots to 1,506, while open positions gained 151 contractsto close at 10,834.

05 April 2002 (Business Times) - PALM oil (CPO) prices may be at a premiumover its rival soyabean oil in the near term as the former is expected toface a decline in production by the year-end.Hamburg-based Oil World editor Thomas Mielke said it is possible that palmoil would trade at a premium to soyabean oil in the near to medium term asMarch stock is already lower than a year ago.“The monthly production data for March this year will probably be lowerthan March last year, and this will be an important factor that couldtemporarily lift palm oil prices above soyabean oil,” Mielke toldreporters on the sidelines of a palm oil seminar in Selangor yesterday.According to the Malaysian Palm Oil Board (MPOB), closing stock forFebruary was at 1.28 million tonnes, or a 14.1 per cent drop from 1.49million tonnes in the same month last year.Production in February declined to 773,341 tonnes, or a 13 per cent dropfrom 888,767 tonnes in the same month last year.The MPOB will release official production, stockpile and export figures byApril 12.Most industry observers said early this year that Malaysia’s palm oilproduction was expected to decline to around 11.5 million tonnes by theyear-end from 11.8 million tonnes last year because of tree fatigue.“The tightness in the oils and fats balance resembles that in 1997-98 whenMalaysia’s palm oil was sold at US$632 (US$1 = RM3.80) a tonne andArgentina’s soyabean oil was at US$617,” said Mielke.He added that weather developments will be of particular importance,noting that a moderate El Nino is developing and has begun to be felt inSouth-East Asia.“Unusually dry conditions since December or January are affecting palm andlauric oil production in Malaysia and parts of the Philippines,” saidMielke.Generally, palm oil has traded at a discount of between US$60 and US$100over the years.For example, Rotterdam palm oil price carriage, insurance and freight ofUS$300 a tonne will be at a discount of US$100 should soyabean be pricedat US$400 a tonne.This discount usually varies between US$60 and US$80 depending on soyabeanand palm oil prices, which fluctuate according to market demand.Industry observers have always maintained that the discount should benarrowed to between US$30 and US$40 and that being at a premium is notalways good for producers.“Should palm oil prices be at a premium naturally, buyers would opt forcheaper oils which in this case is not palm oil,” a trader said.Mielke said having palm oil prices at a premium over soyabean oil wouldnot be the first time as the former has been trading at a premium wheneverthere is a shortage in Malaysia.“Palm oil and soyabean oil have considerable rally potential for theremainder of the season as some key fundamentals show that the world’s 17edible oils and fats supply and demand outlook is tighter than currentprices suggest, said Mielke.Mielke said a sizeable slowing down of the growth in world consumption ofthe world’s edible oils will decline sharply by about 1.3 million thisseason.Malaysia is the world’s biggest producer at 11.80 million tonnes last yearof which 10.59 million tonnes were exported to 140 countries.

28 March 2002 (OIL WORLD WEEKLY). Today’s US planting intentions report shows a surprising decline in thisyear’s soybean area to only 73.0 million acres, down by 1.6 Mn fromaverage expectations and down by 1.1 Mn acres from last year. This pluslower March 1 US soybean stocks should support prices in the near tomedium term.

Sebagai sebuah badan penyelidikan dan pembangunan serta pelesenan danpemantauan, MPOB sangat aktif dalam menyedia dan membentang kertaskerjadan laporan, sama ada di dalam dan di luar negeri berhubung industri sawitMalaysia. Dengan itu penyelarasan perangkaan dalam semua laporan-laporanyang dikeluarkan oleh MPOB sangatlah penting.

KUALA LUMPUR, Fri. 30 March 2002 (NSTP) — The National Association ofSmallholders wants a government agency or company to be set up to buy,grade and process palm oil produced by smallholders and extend advisoryservices to them.

PARIS 03/27/2002 (Reuters) : EU rapeseed production is seen rebounding in2002, buoyed by a rise in sowings in Germany and generally favourable cropconditions, analysts and traders said.A French oilseeds analyst said he expected the EU to harvest 9.75 milliontonnes of rapeseed in 2002.That would be up 840,000 tonnes, or 9.4 percent, from Hamburg-basednewsletter Oil World's recent estimate of the 2001 EU rapeseed crop.In France analysts said winter rapeseed had benefited from mild weather inrecent weeks. A year ago heavy rains undermined the crop."So far, so good," said Fabien Lagarde of the French technical oilseedscentre Cetiom. "Rapeseed crops are growing well everywhere."Despite a slight drop in French winter rapeseed sowings, Lagarde and otheranalysts expected the 2002 rapeseed crop to rise to around 3.2 milliontonnes from 2.9 million last season.In Germany, analysts reported rain damage in March but still hoped for abigger crop following a jump in sowings."It is still hard to judge the impact from any rain damage on the harvestas plantings are up 13 percent on last year, (but) we are still lookingfor a larger crop this year," a trader said.Oil World has pegged the coming rapeseed crop in Germany at 4.35 milliontonnes, up from 4.168 million in 2001.It rained constantly in Germany in March, which damages crops on poorlydrained soils in the northern regions of Lower Saxony, Schleswig-Holsteinand Mecklenburg-Vorpommern.But another analyst stressed that the damage had been isolated and thatthe crop would likely be up on the year.In Britain, the area fell slightly but the drop was seen largely offset byfavourable weather.Plantings were thriving almost too well, agronomists said, with little orno disease seen."The crops look quite good, the disease levels are relatively low andwe're probably now just one or two weeks off starting to flower onrapeseed," said John Garstang of leading crop consultants ADAS."If anything, they're probably a bit thick and there may be some problemswith some of the crop heads falling," he added.British rapeseed output this year was seen at 1.2 million tonnes, justabove last year's 1.13 million, Garstang said.According to the latest data released by Britain's Department forEnvironment, Food and Rural Affairs (DEFRA), British farmers had plantedrapeseed on 341,000 hectares by December 3, 2001, down from 345,000 halast year.-Reuters

JAKARTA, March 20 (Asia Pulse) - Malaysia and Indonesia have a received aboost in crude palm oil exports following strong demand in the worldmarket.Malaysia and Indonesia are the largest and second largest producers ofthat commodity in the world.Growing demand such as from China, India, the European Union, the UnitedStates and Pakistan has pushed up the prices and boosted exports, amarketing official of state plantation companies said Tuesday.Stocks are dwindling fast causing an increase in prices on the domesticmarket, said Bagas Angkasa, an executive of the joint marketing office ofstate-owned plantation companies PT PN.Bagas said apart from dwindling stock, the price on the domestic marketrose after the visit of an Indonesian team to China to promote sales ofCPO.He said the rupiah strengthening curbed the price rise on the domesticmarket but the effect of price increase in the export market was stronger.Analysts said profit taking and shrinking stocks of edible oils such as inIndia pushed up the prices in international markets.- (ANTARA)

(The opinions expressed in this article represent the view of leadingpalm oil market analyst Ivan Wong. They should not be seen as necessarilyreflecting the views of Reuters)

22 March 2002 (OIL WORLD WEEKLY)

28 March, 2002 (Business Times)CHINA has already made its presence in the local palm oil marketunannounced to avoid sending upward pressure on prices.Traders said China deliberately pulled the move to capitalise on currentpalm oil prices which are hovering hover between RM1,100 a tonne to andRM1,150 a tonne or risk buying at higher prices later on.“The Chinese Government is a smart marketeer as it knows prices will rallyonce its intention to enter the market is made known,” a trader toldBusiness Times in Kuala Lumpur yesterday.According to the Malaysian Palm Oil Board’s website China had in Januaryand February bought 44,848 tonnes and 89,411 tonnes of Malaysia’s palm oilrespectively.China, Malaysia’s third biggest buyer last year at 1.28 million tonnes haspledged to buy 2.4 million tonnes of palm oil following its formal entryinto the World Trade Organisation on December 12 last year.The amount is higher by one million tonnes from its traditional annualpurchase of 1.4 million tonnes.The industry had speculated that China would initiate its palm oilpurchase soon following the expansion of its import volume.Traders have widely speculated that China would start on its buying spreeas early as January, a move that has not been made till yesterday.China’s State Development and Planning Commission was supposed to announceabout ten authorised importers from the private sector by March 7 but tillyesterday has yet to do so.The authorised companies must first obtain approval from the commissionbefore they are allowed to import on the country’s behalf.“Even though, the identities of the companies already in the market arenot known the industry suspects they are actually the authorisedimporters,” said the trader.He added that a stronger presence from will be felt when prices droppedbelow the RM1,000 a tonne . level.“Maybe then, China will actually make public the identities of theimporters,” he said.But the scenario is unlikely as most industry observers had said palm oilprices are expected to firm up till year-end due to the possibility of ElNino and oil palm trees face production fatigue.Traders have also speculated on Monday that China’s delay in entering themarket is actually a trade reprisal against the US for hiking increasingsteel imports to a maximum of 30 per cent on March 6.They said China, also a major steel producer, had deliberately dragged itsfeet in purchasing US soyabean, a move that unfortunately affects Malaysia’s palm oil as well.Malaysia is the world’s biggest producer of palm oil accounting for 52 percent of total output. It produced 11.803 million tonnes last year of which10.593 million tonnes are exported to 140 countries.