Archived News

16 October 2001 (Business Times)

BANGALORE, Oct. 5. (Business Line) - THE current disagreement between ITCand Conagra over the oil milling facility in Mantralayam reflects thestate of the edible oil industry today, thanks to Government policies.The 300-tonne-per-day capacity mill has now become economically unviablebecause of these policies and neither Agro Tech Foods Ltd (ATFL),Conagra's subsidiary which had taken the facility on lease from ITC, northe original owner of the factory really wants it.The disagreement arises from the fact that Conagra now wants to take it ona fresh lease on different terms than that agreed to in 1997, or buy itoutright for Rs 14 crore, though ITC itself had paid Rs 112 crore for it.ITC, which first set up the facility, had hoped to repeat the success ofits tobacco experiment with sunflower. ITC is credited with introducingcontract manufacturing of tobacco and encouraging cultivation through itsother unit, ILTD (ITC Leaf Tobacco Division).However, the sunflower oil facility has succumbed to forces that has theentire milling industry in the country in doldrums. The Mantralayamfactory highlights what the Government policies have done to theindigenous oils and oilseeds industry.When it was set up, the company bought the sunflower grown by farmers inthe surrounding Rayalseema and north Karnataka regions. But crushingedible oil became unviable after the Government brought edible oil underOGL.Since then a series of protests finally resulted in increasing the importduty from 15 per cent to the current 75 per cent, though in stages. Everytime the duty was increased, Malaysia - from where most of the palm oilwas being imported - reacted by dropping prices, according to SolventExtractors' Association (SEA) sources.While sunflower oil was not being imported till two years ago, all edibleoils suffered from cheap imports as they were being mixed with theimported oils, according to industry sources.Two years ago, ATFL stopped milling and found it more economical to importsunflower oil and package it here, say sources. This decision meant asignificant reduction in the demand for sunflower seeds. ATFL was themajor buyer of seeds from farmers in the region.With the demand down, the area under sunflower dropped in north Karnatakafrom 8.81 lakh hectares in 1996-97, to 5.74 lakh hectares in 2000-01.In the Rayalseema district, where around six lakh hectares were undersunflower, there has been an estimated 50 per cent drop in cultivatedarea. Prices fell from Rs 1,050-1,350 per quintal in 1996-97 to Rs 800-950in 2000-01.Incidentally, the move has also affected Advanta India (formerly ITCZeneca), which sold moisture stress-tolerant hybrids in the drought-proneRayalseema and north Karnataka areas. The company had 80 per cent of themarket-share in sunflower seeds in the area and, according to sources,sales of sunflower seeds came down by 50 per cent, as there were notakers.To drive home the point of the effect of imports, industry sources pointout that the immediate connection between the import duty prices and theprices of oilseeds is apparent. The latest increase in import duty to 75per cent saw sunflower seed prices firm up at Rs 16 per kg and remainstable, after a long time.SEA sources believe that a policy more favourable to the Indian industrycan rejuvenate the sector and help it bounce back in three years.

06 October 2001 (NSTP)

15 October 2001 (Business Times) - MANY plantation companies had hopedthat by going into property development, they would be less exposed to thevagaries of the palm oil market. But with the lower demand for homes andoffices of late and palm oil prices remaining soft, these companies nowface a double-blow to their profitability.The outlook for both the property and plantation sectors in the nextquarter is not good, analysts said.“Previously, when prices of crude palm oil (CPO) fall, these companies cancount on property project earnings to serve as a buffer... which is notthe case in the current circumstances,” one said.The global economic slowdown has seen CPO prices easing while creatinguncertainties that affect property demand, thus threatening to take theshine off these companies’ shares, he said.Among plantation companies exposed to property development are KumpulanGuthrie Bhd and its subsidiaries Highlands & Lowlands Bhd and GuthrieRopel Bhd.And IOI Corp Bhd is involved in the sector through IOI Properties Bhd.Such plantation companies have a combined weightage of about 31 per centon the Kuala Lumpur Stock Exchange (KLSE) Plantation Index.According to the valuation and property services department, the totalnumber of unsold properties comprising houses, shops and industrial unitsfell 25.4 per cent to 46,315 units as at June 2001 from 62,051 units as atend-December 2000.However, total residential stock edged up 1 per cent to 2.6 million unitsin the second quarter from the first three months of the year.“Consumer confidence and spending may weaken... I think only companieswith good landbank in good locations are in a good position to weather thedecline in demand,” said another analyst.Likewise, investing in companies with commercial and industrial propertiesshould be guarded, he added.The palm oil sector, meanwhile, has an estimated stock of 1.17 milliontonnes as at end-September, up 290,000 tonnes from a month earlier.While Malaysia is facing pressure to increase exports in order to reducethe stock and buoy prices, rival producers — especially Indonesia — havebeen flooding the market with the commodity.“But plantation companies generally remain fundamentally strong,” theanalyst said.Unfortunately, investors are ignoring their positive attributes, such asstrong net tangible assets and low levels of borrowings.Still, the KLSE Plantation Index has outperformed the bellwether KualaLumpur Stock Exchange Composite Index (KLCI), despite most plantationcompanies posting weak quarterly earnings.The KL Plantation Index even managed to rise to a 52-week high of 1,639.55points on August 27, up from its year-low of 1,248.99 points on April 10.But in the past two weeks, the Plantation index has been falling at afaster pace than the KLCI.It lost 2.17 per cent and the KLCI 0.97 per cent between September 28 andOctober 11. Most analysts attribute the fall to the military attack by theUS on Afghanistan.Exports to Pakistan, Egypt and other consumers in West Asia account forabout 10 per cent, or 100,000 tonnes of, Malaysia’s monthly shipments ofthe commodity.India is Malaysia’s single largest market for CPO followed by the EuropeanUnion, China, Pakistan and Egypt. Collectively, they buy 61.5 per cent ofMalaysia’s palm oil.The long-term outlook for palm oil, however, remains intact given thevarious measures already taken by the Government, including entering intocounter-trade arrangements for the commodity.

Monday, October 15, 2001(The Star)By CHIA JOO SUANNOT all oils are suited for cooking. Each has its own properties. Someprecautions are also required to retain the quality of cooking oil, moreso to reduce the greasy mess in the kitchen.As an ingredient, fat or oil is important in food preparation because itimparts palatability and consistency to foods. Fatty food provides the “oommph” in taste.Best oil for cookingButter cookies are crispier and tastier. Koay teow fried with animal fatsuch as lard has a special flavour that other oils just don’t impart.These are the common features of animal fats.For frying, animal fat, especially lard, is most suitable. This fattolerates high temperatures without breaking down. On the other hand,animal fats contain highly saturated fat, and because of health andreligious reasons, most people don’t use it anymore.Should you object to the use of animal fat, monounsaturated olive oil is agood alternative. This oil can tolerate high temperatures without breakingdown and keeps the kitchen less greasy. Unfortunately, it is veryexpensive.Palm and peanut oils are good substitutes. Nevertheless these alternativeshave higher saturated fat content than olive oil. However, all arecholesterol free. Palm oil also contains vitamin E which slows the ageingprocess. Red palm oil is a rich source of beta-carotene, an antioxidantwhich fights cancer.Sunflower, corn and soybean oils are polyunsaturated cholesterol-freeoils. These oils cannot tolerate high frying temperatures. They break downduring cooking and produce a greasy mess around the cooking area.These oils are suitable for low temperature cooking or for use as saladdressings.Less greasy foodTo reduce the amount of oil absorbed into food during deep frying, oilmust be heated to cooking temperature. Food cooked at too low atemperature will be greasy. If there is too much food cooking in the oil,the cooking temperature will be lowered and the food will become greasytoo. To minimise this problem, add food to the oil in small portions andlet the oil heat up between batches.You can check oil temperature by the simple traditional way. Place a smallpiece of food to be cooked into the oil – it is hot enough when bubblesform all around the morsel of food. Otherwise use a thermometer and cookat 190°C (375°F) if you are using a deep fryer.A wok is useful cookware. The unique shape of the wok enables cooking withless oil than a flat frying pan.Reuse of oilUsed oil retains food particles or seasoning which affect its flavour andquality. The more times you use the oil, the more slowly it can be poured.Its viscosity changes because of changes to the oil’s molecular structure.If the oil is to be reused, let it cool until it is safe to handle. Thenstrain it with a paper towel, coffee filter or cheesecloth.Do not mix it with unused oil. The filtered oil should then be kept in atightly sealed container and placed in a cool, dark place to prevent itfrom becoming rancid.Used oil may cloud in the refrigerator, but it should become clear againat room temperature with no ill effects.Smoke pointThe temperature when the oil begins to decompose and visible fumes orsmoke are given off is the smoke point of oil. Oils with high smoke pointsare from safflower and sunflower. Olive and sesame oil have low smokepoints.Oils with higher smoke points can be reused three to four times in deepfrying. As for other oils, it is better not to use them more than threetimes. You can combine oils of high and low smoke point to reduce thecost. A mixture of palm and sunflower oil is a good choice.Signs of deteriorated oilOil darkens with use because the oil and food molecules burn due to heat.When oil begins to breakdown, acreolein, a smelly compound, is formed. Itgives a rancid taste to food.Other signs of deterioration include foaming, darkening or smokingexcessively when the oil is slightly heated.When the oil is no longer useable, the oil itself may start to smellrancid or fails to bubble when food is added to hot oil. This indicatesthat the oil must be discarded!If you are using a deep fryer, when smoke appears on the oil surfacebefore the temperature reaches 190°C (375°F), your oil will no longerdeep-fry effectively.Prolong oil lifeThe longer the oil is heated, the more quickly it will decompose. Avoidpreheating the oil longer than necessary.If you are cooking more than one batch of food, quickly add in each newbatch. Turn off the heat as soon as the cooking is completed. Cool andkeep the oil in a cool dark place to prevent oxidation.Avoiding adding salt to food before deep-frying is another good way toretain the cooking property of the oil. The salt draws moisture to thefood surface, which will splatter when the food is put into the hot oil.Salt also lowers the smoke point and breaks down the oil more quickly. Insome traditional cooking practices, a pinch of salt is added to the oil inshallow frying of fish. Salt breaks down the oil and prevents oilsplatter.Oil handled with care will cook safer and yield tastier food!

BEIJING, 10/12/2001 (The Associated Press) - A U.S. negotiator demandedThursday that Beijing lift quarantine restrictions that threaten more than$1 billion in annual American soybean exports to China.The United States is China's main supplier of soybeans. But none of itssoybeans have been shipped to China since June due to uncertainty over newChinese inspection and quarantine rules and an as-yet undisclosed new lawon genetically altered foods.David Hegwood, the U.S. Department of Agriculture's top lawyer, saidChinese officials he met this week denied U.S. allegations that themeasures are protectionist. But he said they offered no clarification orrationale for the rules.The United States sees no evidence that the rules ``are anything butunfair trade restrictions,'' Hegwood told reporters after his meetings inBeijing.``We have seen no evidence that these are scientifically justified atleast in the manner in which they are being applied now,'' he said.Hedgwood said the procedures violate rules China will have to follow whenit formally joins the World Trade Organization, expected early next year.

LANGKAWI, Oct 10 (Bernama) -- Primary Industries Minister Datuk Seri DrLim Keng Yaik said here on Wednesday that industry players in theMalaysian palm oil sector should find ways to increase palm oilconsumption following disruption in its shipment.

Friday, October 12, 2001 (The Star) - GOLDEN Hope Plantations Bhd expectsto maintain its performance next year despite bearish crude palm oil (CPO)prices and uncertainty over its exports to India and Pakistan.Golden Hope chairman Tan Sri Ahmad Sarji said he expected the company tomeet its targeted 10% increase in earnings for the year ending June 30,2002, through cost-cutting and higher productivity.The group, he said, also expected its property division to do well in thecurrent year with new flagship property projects in the pipeline.“We will keep to our target and remain hopeful,’’ he told reporters afterGolden Hope’s AGM and EGM in Kuala Lumpur yesterday.Sarji said Golden Hope’s exports to Pakistan and India were slightlyaffected by the recent 1% increase in freight charges and disruption ofshipment.“I think the government and the industry would soon be able to find analternative route to help overcome this setback,’’ he said.Golden Hope produces about 360,000 tonnes of CPO and exports about halfits output to Pakistan and India.Sarji said the profit target for 2002 was made before the US air strikeson Afghanistan, adding that the group was unable to ascertain theirpossible impact on its exports.The Gulf War in 1990, he added, had a positive impact on exports to Indiaand Pakistan.On the group’s plans to expand downstream, Sarji said talks on theacquisition of companies were on-going.He said the group was planning flagship projects in strategic locations toprepare itself for a pick-up in the property market.Sarji expressed hope the government would introduce more measures andincentives, especially to support the adoption of information andcommunications technology and double the tax deduction for training in theupcoming budget.

Oleh Mohd Saufi Awang (saufi@mpob.gov.my)06 October 2001 (NSTP)

06 October 2001 (NSTP)

KUALA LUMPUR, Oct 11 (Reuters) - The following are factors likely toaffect the performance of Malaysian palm oil futures on Thursday.* Chicago Board of Trade soybean and soymeal futures closed lowerWednesday on technical selling and reports of a pickup in the U.S. harvestpace, while soyoil closed mixed, following this week's rally after Indiacut its base price of palm oils.CBOT soyoil futures closed up 0.05 cent per lb to down 0.07 cent per lb,with October up 0.05 cent at 15.32 cents and December unchanged at 15.49cents.* Technical analysts said short term outlook was positive in Malaysia'scrude palm oil futures, but the market has yet to break free from thebears."The market needs to break 982 ringgit in order to go up to 1,000ringgit," said one analyst in Kuala Lumpur."It doesn't mean the classic bear is over yet. Based on the currenttechnical indicators, the bearish trend is intact," he added.The analyst pegged support at 944 ringgit and major resistance at 982ringgit. Next resistance was seen at 1,010 ringgit.* In India, traders said that local importers are likely to increase palmoil buying in the next few months following the government's cut of baseimport prices.The reduction, announced on Tuesday, has resulted in a fall of 10 to 20percent in the effective import levies on palm oils, making imports moreattractive.India, the world's largest buyer of edible oils, is now likely to buy morethan the earlier estimated 400,000 to 450,000 tonnes in October, saidtraders.In Malaysia, palm oil futures ended sharply higher on Wednesday due tomarket-friendly export figures and India's move to cut base prices of palmoils.The benchmark third-month December palm oil contract was up 56 ringgit at973 ringgit ($256.05) a tonne after trading as high as 980 ringgit,slightly below key resistance of 986 ringgit.

SINGAPORE, Oct 11 (Reuters) - Pakistan has urged insurance firms not tolevy war risk surcharges on cargoes as shipowners are increasinglyreluctant to charter vessels since the U.S. launched retaliatory strikeson Afghanistan, shipping industry officials said on Thursday.Many industry officials see India, Pakistan and Bangladesh as a "risktriangle" as the Taliban faced a fourth consecutive day of militarystrikes for sheltering Osama bin Laden, the prime suspect behind theSeptember 11 airplane attacks on the U.S."The reluctance of shipowners have increased after the retaliatory strikesbegan on Afghanistan," said one Karachi-based shipping industry official."More and more owners are insisting on higher war risk insurance cover."Shipbrokers in Karachi added that Pakistani government officials werecurrently in talks with some insurance firms, and were offering guaranteesfor their vessels."The government is trying its best to issue indemnity to insurancecompanies for not levying a war risk surcharge," said the shippingindustry official. "All efforts are being made. The government is tellingthem that their ships will be safe."Last week, three international shipping lines, Korean lines HyundaiMerchant Marine Co Ltd and Wanhai Line, together with Hong Kong-basedOrient Overseas Container Lines (OOCL) suspended operations to assess warrisk insurance charges.Shipping officials said on Wednesday they had decided to resume Pakistanoperations.Pakistani shipbrokers said Karachi port officials had recently called ameeting with trade officials to discuss the crisis arising out of themilitary offensive in its neighbour."We told them (port authorities) that we are facing this problem. They aretrying to issue a notice in newspapers that it is safe to come here," saidone shipbroker, adding that one U.S. ship coming to Pakistan was alsooffered escort.One Indian shipbroker added that shipowners were extremely cautious. "Nocontract cancellation has taken place but the impact is somewhat felt.Shipment costs to the Middle East have somewhat gone up."