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11/21/2001,(Southeast Farm Press) - One need only look at the current U.S.soybean supply and demand balance sheet to see that the 1996 Freedom toFarm legislation isn't working as intended, says Gerald A Bange, chairmanof the USDA World Agricultural Outlook Board."Soybean production for 2001-02 is forecast at 2.834 million bushels, andthis is coming off a year when the average market price was $4.55 perbushel," says Bange. "Freedom to Farm isn't working because farmersapparently are not responding to market signals. And these market signalsare being buffered somewhat by government programs." Export situationTurning to soybean exports, Bange says U.S. farmers should be able to holdsteady at one million bushels. "For some years now we've been estimatingsoybean exports at one billion bushels. We finally reached that number in2000-2001, and we're expecting to hold exports at essentially the samenumber for 2001-2002."Ending stocks for U.S. soybeans are expected to increase from 240 millionbushels to about 255 million bushels, he says, but a stronger market pricestill is expected for U.S. producers in 2001-02."The range for the average market price is $4.40 to $5.40 per bushel, sowe should see a price of about $4.90 per bushel. Even with our endingstocks actually increasing, we still should see a stronger price. And muchof this is due to the current demand for soybeans coming out of China,"says the economist.The current downward pressure being seen in the soybean market can beattributed to several factors, says Bange. "The Brazilians are talkingabout a 45 million ton crop. This is the crop that will be harvested afterthe first of next year. If they don't have weather problems, theBrazilians will have a big crop, and that will have an impact on prices.They've had several years of good weather, and if it happens again, we'llsee a lot of competition from Brazil," he says.Another factor causing concern in the markets is China's position onGMO's, adds Bange. "Right now, China is making rumblings about GMO's.China is a major soybean importer, and when they say they're thinkingabout which GMO's to allow into their country, the entire market becomesnervous and prices are affected."Since about 1980 or 1981, U.S. soybean stocks have decreased gradually, hesays, but U.S. prices have not risen accordingly."If we look at the market in 1985-86, very low prices were associated witha very high stock level. Now, we have relatively low stocks, but the priceis still low. With ending stocks for 2000-2001 at 240 million bushels, wehave an average market price of $4.55 per bushel or an 8.5 percentstocks-to-use ratio. South America"But we have to look at the impact of Brazilian and Argentine stocks toget the whole picture. If you count these stocks at about the same timethat you're counting U.S. stocks, you'll see that the worldwide stockslevel has risen sharply. We can't look only at what is happening in theUnited States."China, says Bange, has become a major importer of soybeans, and this hasoccurred since the mid-1990s. "In 1993 and 1994, China was importingvirtually nothing. Now, they're importing about 14 million metric tons.Given what is occurring in Brazil, and what has happened with U.S.production, this market really would be in the pits were it not forChina's imports. It's bad enough as it is, but it would be much worse ifChina wasn't taking these 14 million tons off the market."This 14 million tons isn't coming from the United States alone. Abouthalf of it comes from the United States and the other half comes fromelsewhere in the world. For awhile, China was importing oil. Now, theyprovide their own labor and press the beans themselves." Two primaryreasonsThere are two primary reasons China is importing so many soybeans, saysBange. One is for feed consumption -- as their incomes have risen, theChinese have put more soybeans into animal feeds."The Chinese have built a lot of processing plants along the coastalareas, and they're importing a lot of beans for those plants. They alsohave a nutrition program where they're feeding soymilk in the schools.They've expanded their processing capacity, so we think they'll be in thesoybean business for some time. If, for whatever reason, they cut off this14 million tons of imports, it would have a devastating impact on U.S. andworld markets."Brazil's soybean production is worrisome for the U.S. market, says Bange.Brazil is anticipating a production of 40 million tons for 2001-02. Thisis up from about 15 million tons in 1985-86."Brazil is moving its production -- they're trading off their morevaluable land for cheaper, more productive land. And Brazilians aren'thappy with U.S. farm programs. A formal complaint to WTO already is inprogress. Brazil has almost doubled its soybean production in the past 10years."The collapse of the real -- Brazil's form of currency -- also has had aneffect on the soybean markets. Since July of 2000, the real has fallen 49percent against the U.S. dollar. A weak real means that their ability tocompete with the United States is greater. The Brazilian price isimproving because of this weak currency, and that gives them a competitiveadvantage. They can undercut us.Argentina, says Bange, also is producing more soybeans. "When we look atthe combined increase of Brazil and Argentina versus the United States,it's been phenomenal."Farmland values, he says, are beginning to hamper U.S. producers' abilityto compete in a world market. "USDA has done a fair amount of research tohelp determine who can produce the cheapest soybeans. In terms of variablecosts of production, U.S. producers can beat competitors `hands down.' Ourproblem is that land values are being capitalized into the cost equation."Overall, our competitors can produce more cheaply because we're factoringin high land values. Land values have been rising, so this is causing somedifficulty for U.S. producers. As the cost of land rises, it goes backinto the cost of production. And though we can beat our competitors onvariable costs, we can't beat them on total costs."

MUMBAI, Nov. 26 (Business Line) - GLOBAL production of major oilseeds islikely to reach a new high in 2001-02 on the back of record soyabeanoutput, so will oilseeds crush. This will lead to record protein mealproduction, consumption and trade in the current year. World vegetable oilproduction, consumption and trade will also witness expansion but at aslower rate leading to drawdown of stocks.On current reckoning, production of major oilseeds and oil-bearingmaterial is forecast to record 323 million tonnes in 2001-02, up from 311mt last year. A 9 mt increase in soyabean output to an unprecedented 182.5mt, a 3 mt increase in cottonseed to 36.5 mt and 2.5 mt in groundnut to33.7 mt will be partially offset by lower sunflowerseed and rapeseed crop,according to the US Department of Agriculture (USDA).Latest estimate suggests soyabean output in the US will reach anunprecedented 79.5 mt, up from 75 mt of 2000-01, while forecast for Braziland Argentina (crop to be harvested in February 2002) will scale newhighs, continuing the consistent rise of the last few years.Brazil's soyabean production for 2001-02 is forecast at 41.5 mt (38.4 mt)and Argentina 28 mt (26.7 mt). Both China (15.3 mt) and India (5.6 mt)have more or less maintained their production volumes.Global oilseeds crush this year will expand to 263.5 mt (255 mt)encouraged by 7.5 mt increase in soyabean crush to 155 mt Together withhigher cottonseed and groundnut crushing, global protein meal productionis slated to reach 182.2 mt, of which soyameal will account for 123 mt.In case of major vegetable oils, the USDA has forecast production for2001-02 at 90.6 mt (88.7 mt) and consumption at 90.7 mt (88.2 mt). Acombined 1.1 mt reduction in rapeseed oil and sunoil production will bemore than offset by higher soyabean, palm, groundnut and cottonseed oilsproduction.Palm oil production: Malaysia national monthly average rainfall in the2001 third quarter fell below normal for only the second time in the last10 quarters.Additionally, excess precipitation in November 2000-January 2001 is likelyto reduce palm oil production prospects.As high yields are typically associated with above-average precipitation,the reduced third quarter has reduced palm oil yield prospects, USDA hassuggested.During 2001-02, Malaysian palm oil production is forecast at 12.2 mt, upfrom 11.9 mt of last year when the average yield was 4.06 tonnes perhectare. Malaysian palm oil area is currently estimated at 3.31 millionhectares and the yield is expected to be lower than last year's.

NEW DELHI, Nov 28 (Reuters) - Indian officials were non-committal onWednesday about any immediate plans to revise the base prices for palmolein.Rumours have been circulating in the market this week that India, theworld's largest edible oil importer, plans to raise its RBD palm oleinbase price to $340 a tonne from $307.India fixes the base prices of various edible oils to preventunder-invoicing and to ensure the government does not lose revenue fromimport duties. Importers will have to pay duty on the fixed import pricesof the oil irrespective of the actual purchase prices.Traders in Kuala Lumpur said India uses an average C&F price for palmoil, in this case November, to determine the base price for the followingmonth.One official in the Finance Ministry said there was no immediate plansto change the base prices for edible oils but declined to comment further.Other ministry officials were also not forthcoming on the issue.In the key Malaysian market December RBD palm olein was offered onWednesday at $312.50, with January at $317.50 and February/March at $325.India imported a record 4.8 million tonnes of edible oils in the yearto October 2001, up from 4.49 million the previous year, according to theindustry estimates.Annual demand for edible oil in India is forecast to rise to 13-14million tonnes by 2004/05 (Nov-Oct), from about 11 million tonnes atpresent.

JAKARTA, Nov 29 (Reuters) - Indonesia is seen producing around 8 milliontonnes of crude palm oil in 2001, far above its earlier forecast, due tonew plantations starting to yield their crop, a senior industry officialsaid on Thursday.The world's second largest palm oil producer had earlier forecastproduction at 7.3 million tonnes this year.Nafis Daulay, Chairman of the Indonesian Edible Oils Association(AIMMI) said Indonesia had exported 1.53 million tonnes of crude palm oil(CPO) in the first ten months of this year, while exports of its byproducts in CPO equivalent reached 2.18 million tonnes.Around 2.8 million tonnes of CPO was sold in the domestic market duringthe same period, he said."Output in November and December is seen at 1.4 million at least, sothe total production will reach more than 8 million tonnes," Daulay toldReuters.The Indonesian Palm Oil Producers Association (GAPKI) earlier forecastthe country to produce 7.3 million tonnes in 2001, an increase from around6.5 million tonnes a year earlier.But while he forecast a rise in production, Daulay said the total for2001 would not be as high as 8.5 million tonnes, a figure expected by manyregional palm oil traders.

NEW DELHI, Nov 27 (Asia Pulse) - Online trading in edible oil startedtoday in Bombay, and is expected to facilitate the trade in refined,bleached and deodorized palm oil futures contracts with remote importersand overseas investors.India is the largest importer of edible oil and imported 4.8 milliontonnes in the 2000-01 season (November-October).Online trading will help take instant decisions as traders would haveready access to price trends. It eliminates delay in information flow byallowing direct trading, market sources said here.They said Bombay exchange trades about 4 million rupees worth of RBD palmoil futures a day. That could surge to 150 They said Bombay exchangetrades about 4 million rupees worth of RBD palm oil futures a day. Thatcould surge to 150 million rupees once it starts being traded online,traders said. RBD palm oil isn't traded on any other exchange in theworld.

ST.PETERSBURG, RUSSIA, NOV 18, 2001 (A&G News via COMTEX) -- The minimumimport duty on sunflower,rapeseed and soybean oils will beincreased fromEURO 0.09 to EURO 0.14 per1 kg of bottled production and to EURO 0.1fornon-packaged oil.

29 November 2001 (Business Times) - MALAYSIA’S crude palm oil (CPO)futures prices broke a key support level and fell across the boardyesterday due to the absence of fresh leads but traders insist it is atemporary situation caused by technical selling.This is despite most industry observers’ forecast early this month thatCPO prices are expected to perform well and float above the RM1,200 atonne level by year-end.By midday in yesterday’s trade on the Malaysian Derivatives Exchange(MDEX), the benchmark third-month February futures was down RM33 atRM1,109 a tonne after breaking the key support of RM1,120 a tonne.“CPO prices have been on an uptrend for the past two weeks and it has tocome down at some point on technical selling with a new key support ofRM1,100 a tonne,” a trader told Business Times in Kuala Lumpur yesterday.He said the market is also bogged down as some players remained anxiousover a possible increase in India’s refined bleached and deodorised palmolein base price.Rumours circulated in the market that the world’s largest edible oilimporter India plans to raise the base price to US$340 (US$1 = RM3.80) atonne from US$307 a tonne.“There is a possibility India will revise upwards the base price which mayeventually lead to a rise in import duties on Malaysia’s palm oil,” saidthe trader.India had increased import duty on Malaysia’s CPO three times last yearbefore the subcontinent finally reduced the duty to 65 per cent from 75per cent last month.India bought 2.38 million tonnes in 1999 and 2.03 million tonnes lastyear.Meanwhile, another trader said the market is expected to improve as longas the rainy season continues and export figures for November touch theone million tonne mark.According to the Malaysian Palm Oil Board, Malaysia exported 898,918tonnes of palm oil in October and many players expect November exports totop one million.Malaysia is the world’s biggest producer of CPO, exporting 8.32 milliontonnes in 1996 worth RM9.4 billion and 10.38 million tonnes with a salesvalue of RM12.47 billion last year.Meanwhile, December price dropped RM36 to settle at RM1,059 per tonnewhile January fell RM44 to settle at RM1,078 per tonne on MDEX yesterday.February contracts decreased RM46 to settle at RM1,096 per tonne and Marchfell RM44 to end at RM1,100 per tonne. Total turnover widened to 3,424lots from 2,318 lots on Tuesday, while open interest was down at 12,948contracts from 12,952 contracts previously.In the physical market, November South was traded at RM1,080 per tonnecompared with RM1,100 per tonne on Tuesday.

BOMBAY, Nov 25 (Reuters) - India said on Sunday that growing import levelsof edible oils in the country, the world's largest buyer, was a matter ofconcern and needs to be corrected."The current import levels are ringing alarm bells," federal Food MinisterShanta Kumar told an oilseeds convention.India's foreign dependence on imported vegetable oils has currently risento about 40 percent from just three percent in 1992/93.The country imported a record 4.8 million tonnes of edible oils in theyear to October 2001, up from 4.49 million the previous year, according tothe industry estimates.Annual demand for edible oil in India is forecast to rise to 13-14 milliontonnes by 2004/05 (November-October), from about 11 million tonnes now.Annual oilseeds output has remained virtually stagnant in the last decde,despite several government initiatives. India produced 18.21 milliontonnes of oilseeds in 2000/01 compared with 18.61 million a decade ago."We have tried to correct it (the situation) by raising import duties fourtimes in the last two years but it did not solve the problem," Kumar said.There was a need to induce farmers to shift to cultivation of oilseedsfrom foodgrains, he said and added that the government was consideringincentives to boost oilseeds output.The government was also committed to provide an efficient marketing systemfor their produce, he added."We are surplus in grains production but fail to produce enough oilseeds,"Kumar said.India will have unprecedented grains stocks of about 75.5 million tonnesbefore wheat procurement will begin in April. As on October 1, India hadtotal grains stocks of 58.28 million tonnes against the buffer stockrequirement of 18.10 million tonnes.

KUALA LUMPUR, Nov 24 (Bernama) -- International Trade and IndustryMinister, Datuk Seri Rafidah Aziz, will lead an 18-member Malaysiandelegation to the Fifth Malaysia-China Joint Economic and Trade Commission(JETC) meeting in Beijing on Nov 26, 2001.

26 November 2001 (Business Times)

SHANGHAI, Nov 21 (Reuters) - China has agreed to allow greater imports ofagricultural products like wheat corn and rice at lower duties after itjoins the World Trade Organisation on December 10.Below is a table detailing yearly import quotas agreed by China under atariff-rate-quota (TRQ) system which comes into effect after WTO entry:

AMSTERDAM, Nov 23 (Reuters) - European palm oil consumers with coveragethrough January are wary of buying more expensive forward positions,mindful of soyoil values amid talk of further price rises, traders said onFriday.Benchmark Malaysian futures rose about eight percent in the past weekand some traders are convinced the market is set for an extended bull run,but consumers were less convinced."There's been a good buying, both from specs and consumers," a Londontrader said, adding that India was a prominent buyer over the past 48hours."The charts look particularly positive on palm oil, everything looksset for another surge," he added.The benchmark Malaysia third-month February palm oil futures closedhigher at 1,182 ringgit a tonne on Friday, not far from key resistance of1,200. The next major target would be the peak of 1,315 ringgit touched onAugust 8, he said.Higher prices would be supported by fundamentals since global palm oiloutput is expected to decline in coming months, especially in Malaysia.October-December world production is due to fall by two percentyear-on-year and by six percent in the first three months of 2002,industry publication Oil World said this week.Another near-term trigger for higher prices could be on Monday whenestimates are due to be released for Malaysian exports during the first 25days of November, traders said.