Archived News

8/8/2001(Soyatech) - The price of vegetable oils is rising in the US dueto lower Asian output, tighter supplies and concern that the US crop willbe affected by adverse weather conditions.Spot prices for soybean, corn and cottonseed oil in Jul 2001 are at theirhighest level of the year so far.Stocks are said to be down.There will be increased demand for US exports of soybean oil in both Asiaand Europe.Trends in Indian and Chinese buying and other world trade are brieflyreviewed.The price of most animal fats and greases is also up.

NEW DELHI, Aug 7 (Reuters) - Indian edible oil prices rose on Tuesdayafter the government decided to fix a base price on palm oil imports toprevent underinvoicing, traders said.India on Monday fixed the base import price of crude palm oil at $337 atonne, RBD palm olein at $372 a tonne and RBD palm oil at $351 a tonne.The government did not specify whether the base prices were C&F or FOB,but traders said they would be C&F rates."Domestic prices have corrected and changed in line with internationalprices," Rajnikant Rai, vice president (exports) of ITC Ltd, told Reuters.The prices of RBD palm olein in the domestic market rose to around 350rupees ($7.43) per 10 kg on Tuesday from 325 rupees last week.Earlier vegetable oil prices in India, the world's largest buyer, werequoted lower than the global rates as some importers were underinvoicingimports, traders said.Dealers said firmer prices were expected to continue till the rateswere at a par with international levels."We are still below the global level and in the next 15 days or so themarket will move to reach that level," said Sandeep Bajoria, president ofthe Solvent Extractors Association of India (SEAI).Traders said the price of RBD palm oelin would be close to 365 to 370rupees for a 10 kg pack after adding import tariffs.Palm olein currently carries an effective import duty of 92.4 percentwhile CPO has a 75 percent duty. Soybean oil has a lower customs levy of45 percent because of World Trade Organisation (WTO) regulations.In the first eight months of the year to October 2001, India's edibleoils imports rose to 2.97 million tonnes from 2.58 million in the year-agoperiod.On Tuesday, Malaysia's benchmark third-month October crude palm oil(CPO) futures contract broke the 1,300 ringgit ($342.11) per tonneresistance level and rose to a high of 1,308 ringgit, its highest levelsince October 11, 1999.Industry sources say slower palm output growth in Malaysia in thesecond half of 2001 and falling end-month stocks will help fuel prices.($1 = 47.10 rupees)($1 = 3.8 ringgit)

NEW DELHI, Aug. 4. (Soyatech via NewsEdge Corporation) In a bid to tacklerampant under-invoicing of prices by edible oil importers, the Governmenthas decided to fix 'tariff values' for assessing customs duty liability at$337 per tonne for crude palm oil, $351 per tonne for RBD palm oil and$372 per tonne for RBD palmolein. These rates, all of which correspond tofree-on-board (f.o.b.) levels (Malaysia), will be officially gazetted in aday or two, according to reliable sources.Fixation of the above tariff values, in effect, would mean that importerscannot declare an f.o.b. rate below these levels for the purpose ofpayment of customs duty.Adding an average freight cost of around $25 per tonne from Malaysia, thecost & freight value of the palm complex (on which the duty is imposed)would work out to roughly $360 per tonne for crude palm oil, $375 pertonne for RBD palm oil and $395 per tonne for RBD palmolein.The sources told Business Line that the tariff values have been determinedon the basis of the 'actual' international prices prevailing now.Currently, Malaysian futures contracts for August/September are trading at$338 per tonne for crude palm oil, $357.5 per tonne for RBD palm oil and$380 per tonne for RBD palmolein (all f.o.b).The decision to fix tariff values was taken in the context of the hugevolatility in international palm oil prices. Only a month ago, RBDpalmolein was being offered in Malaysia at $265 per tonne and crude palmoil at $225 per tonne.In other words, prices have soared by roughly $100 per tonne in hardly25-30 days. "In such a volatile scenario, the incentive forunder-invoicing is high and there is room for importers to cough up lowerduty by simply backdating their consignments," sources said.The increase in global palm oil prices is even more pronounced whencompared to the levels of February 2001, when these averaged a low of $188per tonne for crude palm oil and $204 per tonne for RBD palmolein.It is not clear whether the Government has determined similar tariffvalues for other oils too, particularly soyabean, sunflower andrapeseed-mustard (canola). But according to sources, there is no immediaterequirement to fix tariff values for these soft oils, considering thattheir imports are relatively less compared to the palm complex.During the current oil year from November 2000 to June 2001, the country'stotal edible oil imports amounted to 29.71 lakh tonnes (l.t.), of whichthe palm complex accounted for 20.62 l.t., i.e. over 69 per cent.Moreover, prices of soft oils have not firmed up to the extent as that ofpalm oil. The difference between the landed price of crude degummed soyaoil and crude palm oil has fallen from around $100 per tonne in Februaryto less than $70 per tonne now.The fixation of 'reasonable' tariff values may also give the Government anopportunity to reduce the basic customs duty on crude palm oil from theexisting 75 per cent, as per the 'commitment' given to Malaysia followingthe Prime Minister, Mr Atal Bihari Vajpayee's visit to that country inMay.A 75 per cent duty on crude palm oil at the proposed tariff value ofaround $360 per tonne (c&f) would translate into a domestic price ofnearly Rs 30 per kg.A 10 per cent duty reduction would bring this down to about Rs 28 per kg,which is not expected to cause any major problems for the domestic solventextraction industry, which has been vociferous in its complaints ofunder-invoicing by importers.

KUALA LUMPUR, Aug 7 (Reuters) - Slower palm oil output growth in Malaysiain the second half of 2001 and falling end-month stocks will help keepprices rising, industry sources said on Tuesday.Malaysia's crude palm futures have been climbing steadily since earlyJuly in anticipation of a slow down in local output in the coming months,replacement of ageing trees as well as rises in the Chicago market.On Tuesday, benchmark third-month October crude palm oil (CPO) futurescontract broke the 1,300 ringgit ($342.11) per tonne resistance level androse to a high of 1,308 ringgit, its highest level since October 11, 1999."Production has been very high in the past two to three years. So thisyear, production will be at a plateau," Emerson Liau Yong Hwa, chairman ofthe Incorporated Society of Planters, told Reuters by telephone.Liau said palm oil trees in the world's largest producer are entering acycle in which they will rejuvenate and produce less oil after a peak in2000.This year's second half output growth may slow to 15 percent, comparedto 35 percent in normal conditions.Slower growth is already evident in the eastern state of Sabah onBorneo, where July output is seen falling by 20 percent from June, saidLiau.Sabah, which accounts for around 37 percent of Malaysia's output, isthe country's largest palm oil growing area.

MALAYSIAN JULY PALM OIL FORECAST – IVAN WONG

VENEMAN SAYS BUSH WILL SIGN $5.5 BLN FARM BAILOUT BILL

DALIAN, Aug 3 (Asia Pulse) - The commodities exchange of this coastal cityof northeast China's Liaoning Province has grown into a soybean futurescenter in Asia.Latest statistics show that the Dalian Commodity Exchange clinched a total754.8 billion yuan of trade volume over soybeans in the first half of thisyear, accounting for some three-fourths of the entire domestic soybeanfutures market.In terms of soybean trade, the Dalian Commodity Exchange has jumped to thetop in Asia by overrunning Japan's Tokyo Grain Exchange and ranked secondworldwide, next only to the Chicago Board of Trade (CBOT).According to experts, the Dalian soybean market price is gettingincreasingly authoritative and has even become an important frame ofreference for both domestic and international trading over soybeans.China's futures market, as a result of the country's reform and openingup, has a history of merely a decade and by doubling its regroupingefforts, there are currently three exchanges nationwide, located inDalian, Shanghai and Zhengzhou.Tian Yuan, president of the China Futures Association, believes that thesuccess of the Dalian Commodity Exchange marks also the success of China'smarket economy and financial reform.For the first time early this year, the Chinese central government clearlyput forward the idea of steadily develop the country's futures marketduring the 10th Five Year Plan period (2001-2005).The Chinese government is now taking advantage of the futures market todirect investment, push forward the reform in the grain market and adjustthe agricultural structure, said Tian.With China's entry into the WTO, its soybean market, due to its maturity,will not encounter big problems. However, he said, other grain species,like corn, will be forced into a very tough situation.China produces one-fifth of the world's corn, but its corn prices andtrading are still based on CBOT references.It is learned that relevant Chinese departments are now considering thelisting of corn trading on the futures exchange.Expert here predict that if Dalian Commodities Exchange opens new businesson other grain species like corn, it will soon grow into Asia's leadinggrain futures market and the World's second largest next only to CBOT.

04 August 2001,(Business Times) - AT least 25 per cent of the country'scrude palm oil production within four years is the minimum transactionfigure needed to run the Malaysian Electronic Exchange for Palm Oil(ePomex), the world's first electronic bourse for the trading of oil palmproducts.

PETALING JAYA, Aug 6 (Bernama) -- Malaysia will focus on getting newmarkets and adopting higher production technologies, as part of itsstrategy to boost palm oil exports, said chief executive of Malaysian PalmOil Promotion Council (MPOPC) Datuk Haron Siraj.

07 August 2001 (Business Times) - SUSTAINING the surge in interest amongpalm oil importers will be a challenge that the Malaysian Palm OilPromotion Council must continue to address for the long-term viability ofthe commodity, said council chief executive officer Datuk Haron Siraj.

06 August 2001, (Business Times) - PALM oil industry players have beeninvited to be co-owners of the world's first electronic exchange for thetrading of oil palm products initiated by Malaysia, the global number oneproducer of the commodity.

LAHORE, 8/6/2001 (Business Recorder) - Pakistan Vanaspati Manufacturer'sAssociation (PVMA) has called upon the government to reduce the importduty to 65 percent on palm oil, soyabean and other edible oils, used inthe manufacturing of ghee and cooking oils, claiming the rise in edibleoil prices in the international market is putting pressure on themanufacturers.A spokesman of the association said here on Thursday, that the currentprice trend is a result of phenomenal increase in the prices of edibleoils in the international market however, measures were necessary toalleviate the pains of the consumers for whom the prices of ghee andcooking oil are going beyond the purchasing power of people.Analysing the price rise trend in the international market, the spokesmanstated that from January to July 2001, the prices have gone up by 41 percent. The industry, being highly competitive, has been absorbing the pricehike of edible oil in the international market, but the pressure kept ongrowing compelling the industry to raise the prices of its products.The spokesman said that the prices of local oils are on the rise as injust six months it has gone up from Rs 35000 per tonne to Rs 44000 pertonne.He criticised the high share of government earnings in the ediblebusiness. The association stressed that in order to provide the consumerssome relief, the share sizes should be rationalised.