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Kuala Lumpur, 10 January, 2002 (Business Times) - GOLDEN Hope PlantationBhd is poised to make its mark in the world edible oils market with thesuccessful purchase of Unilever Nederland BV’s 60 million euro (1 euro =RM3.43) palm oil refinery in the Netherlands.Industry observers say the move is an important milestone in Malaysia’spalm oil sector, which will hopefully spur other plantation companies tofollow suit in making downstream investments.“With the purchase, Golden Hope has given a serious challenge to otherplantation companies that are serious in making their mark overseas,” ananalyst told Business Times in Kuala Lumpur yesterday.British-Dutch food and consumer products giant Unilever announcedyesterday the sale of its Unimills refinery business to Golden Hope forapproximately 60 million euro.Unilever press officer Seline Luysterburg said in a statement that thesale of the refinery, located at Zwijndrecht with 210 employees, is partof Unilever’s strategy to focus on its core businesses.The announcement brings Unilever’s intention to sell Unimills, which wasannounced on June 27 2000, to an end.It also wrapped up negotiations with Golden Hope which started in November2001.“The purchase by Golden Hope is in line with Unilever’s existing strategyto expand and diversify in order to achieve larger market share and growthand to support its food-based industry globally,” Luysterburg concluded.Sources said Golden Hope group chief executive officer Datuk Abdul WahabMaskan is currently in the Netherlands overseeing matters pertaining tothe deal, and is only expected to return to Malaysia next week.Meanwhile, a plantation analyst said Golden Hope’s acquisition will turnout to be a worthwhile investment in the future.“It may not bring in returns right away, but just making a presence inEurope is a huge feather in the cap for the company,” she said.She added that the refinery is located near the vicinity of the world’sfourth-biggest port, Rotterdam, which is a major loading and transit pointfor the world’s major edible oils which include palm oil, soyabean oil,rapeseed oil and groundnut oil, before being distributed to other parts ofEurope.She said, subsequently, with the right management and good work practicesadopted at the plant, Golden Hope can hope to diversify in the processingof other edible oils and make a mark in other European countries such asPoland and Denmark.Another analyst commented that Europe itself is a hotbed of establishedrefineries involved in the making of margerine and shortening.“The move is long overdue actually, because the industry has longadvocated companies to diversify and invest downstream to grab a biggershare of the world edible oil market, of which palm oil holds at 60 percent,” he said.The Unimills refinery’s annual sales to third partiesin central andnorthwestern Europe alone is worth some 130 million euro. The refinary hasan annual capacity to process 450,000 tonnes of palm kernel, coconut,soyabean, rapeseed and sunflower oil.Unilever, with products such as Lipton tea, Sunsilk shampoo, Breeze, Dovesoap, Walls ice-cream and Calvin Klein fragrances, plans to focus on 400leading brands starting 2004 from 1,200 brands previously.Unilever, with operations in 40 countries, had announced a sweepingreorganisation plan in February 2000 to boost sales growth of between 5per cent and 8 per cent and achieve profit margins of between 16 per centand 17 per cent by 2004.Last year, Unilever recorded sales of US$44.81 billion (US$1 = RM3.80) andan income of US$1.04 billion.In Malaysia, Unilever produces and markets a number of household productssuch as detergents, margarine and confectionaries with refined palm oil,palm kernel and oleo-chemicals as its base material.It also owns several oil palm estates in Johor, Sabah and Sarawak withwholly-owned subsidiary Pamol Plantations Sdn Bhd managing 24,291ha.Golden Hope, meanwhile, also has three other edible oil refineryoperations overseas — in Vietnam, China and Bangladesh.As a comparison, other plantation companies such as United Plantations Bhdhas palm oil operations in Mexico, the US and the UK while Sime Darby Bhdowns a refinery in Egypt and the Kwok Group has a refinery in China.Golden Hope, in its last financial year ended June 30 2001, recorded apre-tax profit of RM78 million on the back of a RM1.3 billion turnover.Multex Global Estimates, which compiles forecasts from 17 research houses,projects Golden Hope to make a net profit of RM139 million on the back ofa RM1.58 billion turnover with earning per share of RM13.72 .At the Kuala Lumpur Stock Exchange, Golden Hope shares closed 4 sen lowerat RM3.50 with 73,000 shares changing hands.

KUALA LUMPUR, Jan 9 (Bernama) -- Claims by Sri Lanka Rubber ResearchInstitute director, Dr L.M.K Tillekeratne that oil palm is less versatilethan rubber is baseless and shows his ignorance of oil palm's versatility.

Kuala Lumpur, 3 January, 2002 - CHINA is announcing palm oil import quotaearly this year, with the first batch of 500,000 tonnes expected to beannounced next week.Traders said China is pressured to buy more palm oil fast by its WorldTrade Organisation’s (WTO) commitments and higher demands triggered by theLunar Year celebrations next month.Traders said the issuance of the quota to both its state-run importers andthe private sector is imminent as currently palm oil and soyabean oil arethe only available edible oils in the world market.China imposed a quota of 1.4 million tonnes last year which was increasedto 2.4 million tonnes this year in line with its entry as the 143rd memberof the WTO last month.Other edible oils include rapeseed, sunflower, sesame, groundnut andcotton oil.“The quota is expected to be announced in the first week of Januarybecause China has been consistently importing 200,000 tonnes of Malaysia’spalm oil for the past several months,” a trader told Business Times inKuala Lumpur.“Coupled with fantastic exports to other traditional buyers such as India,Pakistan and the European Union, and low seasonal output for the next fewmonths, this development augurs well for Malaysia,” the trader said.He added that talks by several plantation companies of being hit by theon-going floods also contribute to the already tightening supply.Independent cargo surveyor Societe Generale de Surveillance (SGS) Sdn Bhdhad estimated December exports to drop to 1.04 million tonnes, comparedwith 1.05 million tonnes in November.According to SGS, the bulk of exports went to China at 207,784 tonnes,India (202,175 tonnes), Pakistan (88,450 tonnes) and the European Union(195,463 tonnes).The Malaysian Palm Oil Board, Malaysia’s palm oil regulator, is expectedto release official December palm oil production, export and stockpilefigures on January 12.“Even though crude palm oil (CPO) exports recorded a slight drop,nevertheless it is still encouraging in view of the current low productionmonths.“As long as exports are maintained at between 950,000 tonnes and onemillion tonnes until March, it is good news for Malaysia,” said thetrader. He added that the CPO industry’s outlook also appears good forMalaysia in which production is expected to decline by 10 per cent in themonths of January, February and March, respectively, before it picks upagain in April.“And Malaysia’s rival, Indonesia, is also expected to be out of therunning in pursuing the quota as it battles low seasonal output andincreasing domestic demand,” the trader said.For the last year’s 1.4 million-tonne quota, traders said up till June,some 70 per cent or 700,000 tonnes went to Malaysia, with the balancegoing to Indonesia.Traders and industry observers estimate that Malaysia stand to rake in atleast 70 per cent or 1.68 million tonnes of the 2.4 million quotaallocated this year.“And China is expected to issue its second quota for the year of another500,000 tonnes in March,” said another trader.However, he said China would need to study the declining production ofrapeseed and sunflower oils in Argentina and Brazil before issuing thequota.“If the situation there remains tight, then perhaps the quota might beincreased,” he said.China is Malaysia’s third biggest CPO buyer of which it bought 1.02million tonnes last year. India was the largest buyer at 2.03 milliontonnes followed by the European Union at 1.03 million tonnes.Traders also dismissed the possibility of Malaysia’s palm oil exports toIndia and Pakistan being disrupted as the threat of war between the twocountries escalates.“I don’t think war will break out. In this case, the US will tell India tocool it because the US still needs Pakistan as its closest ally to huntdown Osama bin Laden, its number one suspect of the terrorist attacks onNew York and Washington,” the trader said.

SETIU, Wednesday, January 2, 2002 (The Star): Some 100 lorry drivers andFelda settlers protested in front of a palm oil factory in Chalok herewhen they claimed that the management refused to accept their commodities.The protesters, from Felda Tenang, Felda Selasih, Felda Chalok and FeldaChalok Barat, blocked the entrance of Felda Palm Industries Sdn Bhd withtheir lorries during the incident on Monday.But by 11am, the lorries were removed from the entrance when the policewere called in.One of the lorry drivers, Mohamad Lazim Md Daud, 42, a settler from FeldaSelasih said he was disappointed when the factory management refused toaccept their oil palm as they claimed that the fruits had gone bad.Mohamad said he arrived at the factory at about 5.30am and wasdisappointed that the management rejected the fruits even before checkingthem, adding that there was a three-day delay in transporting thecommodities because of the flood.Felda Selasih settler Hasbullah Mamat, 35, said the management should beconsiderate before rejecting the commodities.Factory manager Mustapha Abd Latif said the problem was a misunderstandingbetween the lorry drivers and the management.The management had told the drivers to wait for the plantation officer toverify their commodities before they were graded but they misunderstood itas the management rejecting their commodities, he said.The matter was resolved at about noon after Mustapha met Setiu deputy OCPDASP Mohamed Taib, the lorry drivers and settlers.

Kuala Lumpur, 4 January, 2002 (Business Times) - AMERICANS are switchingtheir vegetable oil consumption from the traditional soyabean oil to palmoil.For the first 11 months of 2001, Malaysian palm oil exports to the US hadincreased by 97 per cent to 191,245 tonnes compared with 93,936 tonnes forsame period a year ago.Malaysian Palm Oil Promotion Council (MPOPC) chief executive officer DatukHaron Siraj said the encouraging statistics have prompted the council totap further into the US consumer market.“Even though Americans generally prefer to consume their own soyabean oil,palm oil exports to the US are increasing,” he told Business Times in aninterview.Haron said efforts to promote palm oil will continue to be carried inseveral states in the US where the consumers there are morehealth-conscious.California, which is the world’s sixth largest economy, is one of the USstates that the council sees greater potential for Malaysian palm oil, headded.“In the US, we take a difference approach in our promotional efforts. Dueto the affluence of the people there, MPOPC focuses more on creatingpublic awareness on palm oil health benefits via seminars andexhibitions," he said.In comparison with India, Pakistan and China, the US is not a traditionalmarket for Malaysian palm oil but going by its huge consumer market, it isa country with great potential for palm oil exports from Malaysia.Haron said the MPOPC will also intensify efforts to enhance the commodity’s potential overseas.“We will go all out to augment the awareness of palm oil’s health andnutritional values and tap new markets.“The sector had seen interesting developments in certain countries lastyear where there had been a marked increase in exports of our palm oilthere.”In Iran for example, from January to August last year palm oil exports hadincreased 2,000 per cent to 60,000 tonnes compared with a mere 3,000tonnes for the corresponding period the year before.Likewise in Vietnam, from January to November, palm oil exports hadincreased 197 per cent to 191,245 tonnes compared with 96,936 tonnes.Other countries where we have recorded higher palm oil exports last yearwere Morocco, Egypt and the Association of South-East Asian Nations membercountries such as Myanmar, Cambodia and Laos.Haron also described MPOPC’s joint collaboration with the AmericanSoyabean Association (ASA) as a great milestone in fostering a closercollaboration with the edible oil rival.“ASA and MPOPC have jointly developed a margarine by the brand name ‘SmartBalance’ with has combined ingredient of both edible oils, and the productis already widely distributed in the US market,” he said.“Now, with more emphasis in the joint collaborative efforts between theGovernment and the private sector, we will continue to knock on more doorsand tap new markets,” said the former secretary general of the PrimaryIndustries Ministry.Haron said the council spends between RM20 million and RM22 millionannually on its promotional efforts, depending on the cess collected onevery tonne of palm oil produced in the country from both the privatesector and state-run plantation agencies.The cess is allocated to the council by its parent agency, the MalaysianPalm Oil Board (MPOB), which is the regulator and watchdog of the country’s palm oil sector.To date, the MPOPC has nine offices or representatives. They are locatedin Austria, the US, South Africa, Brazil, China, Bangladesh, India,Pakistan and Egypt. Meanwhile, thee MPOB has offices in the UK, Iran, HongKong and Egypt.Haron said the MPOPC has six regional committees which are responsible forvarious marketing and promotional activities in their respective regions.The MPOPC also participates in various trade missions and organisesseminars and exhibitions with agencies such as Malaysia External TradeDevelopment Corp, International Trade and Industry Ministry andassociations from the private sector.Haron stressed that the types of promotional efforts, however, vary fromone country to another as each country has to be approached in its ownunique way.“Promotions in Bangladesh, for example, go for mass appeal. We try toreach the masses there by bringing our own chefs to hold cookingdemonstrations there,” Haron said.The MPOPC has also with local companies in Bangladesh, produced a blendedcooking oil of palm oil and soyabean oil for the local market there.Efforts are also taken to promote the product to food manufacturers,bakeries and confectioneries there.Haron admitted there are quiet markets which have not registered a jump inMalaysian palm oil exports.He said that in countries such as Japan and South Korea, the peopletraditionally consume their own agricultural products and as such it isdifficult for Malaysian palm oil to make a big impact here.“Palm oil awareness will grow as consumers start to discover the risks ofconsuming oils derived from genetically modified products, and animal fatssuch as tallow from cattle.“Let’s not forget that there is an enormous potential for palm oil use asbiofuel and biomass which is still largely untapped,” Haron added.Malaysia is the world’s biggest producer of palm oil. Last year, thecountry exported 10.38 million tonnes of palm oil worth RM12.7 billion to140 countries. Its pam oil exports in 1996 was 8.32 million tonnes worthRM9.4 billion.

Kuala Lumpur, 7 January, 2002 (Business Times) - MALAYSIA’S palm oilsector is expected to perform favourably in the first quarter of the yearas crude palm oil (CPO) prices remain strong during the period due to gooddemand.Industry analysts said prices are expected to firm up towards the firstquarter of 2002 as the world’s 17 edible oils market can only opt foreither palm oil or soyabean oil at the moment.CPO prices breached the RM1,000 per tonne level on July 12 last year afterlanguishing at between RM600 and RM700 a tonne for 13 months.“Prices may firm up at least for the first six months of 2002 in view of asupply crunch of about 2.5 million tonnes of rapeseed oil and sunfloweroil,” a trader told Business Times in Kuala Lumpur last Friday.“There is a positive vibe in the air at the moment where a lot of playerscan sense that prices are more likely to move upwards than downwards,” hesaid.He said China’s formal entry as the World Trade Organisation’s 143rdmember is also set to increase its palm oil import quota to 2.4 milliontonnes this year from 1.4 million tonnes last year.Prices of CPO increased 59 per cent to hover between RM1,100 a tonne andRM1,200 a tonne compared with RM692 a tonne in February last year.Meanwhile, another trader said the next three months will see the shortageof sunflower and rapeseed oil which has been hit by poor harvest.“These two oils will not be easy to come by until the next round ofharvesting in March.”He said Malaysia’s palm oil also has the advantage over soyabean oil fromUS, Argentina and Brazil.“It is a Herculean task to export 80 million tonnes of soyabean from theAmerican continent to China... it takes 45 days compared with Malaysia’sdelivery of palm oil which only takes 30 days,” said the trader.PPB Oil Palms Bhd (PPB) executive director and chief operating officerKhoo Khee Ming agreed, saying all signs are pointing towards the companyperforming well this year and expects the streak to continue in thesubsequent quarters.“In my mind, it is clear that things are expected to pick up this year toacceptable levels after being bogged down long enough since 1999,” Khoosaid.“Exports are good at the moment and at this rate Malaysia will not have acarry-over stock of more than 1.5 million tonnes brought over from 1.2million in December last year,” said Khoo who oversees 103,000ha of oilpalm plantation land in Malaysia and Indonesia.Analysts, meanwhile, said local plantation companies are also expected torecord improved first quarter earnings due to the strengthening prices.“Companies such as Golden Hope Plantations Bhd, Kuala Lumpur Kepong Bhdand IOI Corp Bhd would have capitalised on the good prices by selling asfar forward as they can,” a plantation analyst pointed out.Khoo, meanwhile, said the strengthening of prices and strong fundamentalscoupled with lowering cost of production and higher yields will augur wellfor PPB.PPB Oil Palms registered a net profit of RM18.76 million, a 58.2 per centincrease for the nine-month period ending September 30 2001 compared withRM11.86 million in the same corresponding period in 1999.The company made a net profit of RM58.3 million in 2000, a 52 per centdrop from RM121.46 million in 1999.Multex Global Estimates’ compilation of five research houses forecast thegroup to register a net profit of RM31.45 million on the back of a RM209million revenue.Despite these cheerful prognostications, the Kuala Lumpur Stock Exchange(KLSE) Plantation Index showed a smaller improvement during the timecompared to the broader KLSE Composite Index (KLCI) and the KLSE EmasIndex.From October 31 to December 31 last year, the 39-member Plantation Indexappreciated 12.1 per cent compared to KLCI’s 16 per cent and the EmasIndex’s 14.29 per cent.The best performing counters of the 39-members listed on the PlantationIndex from the period between December 12 last year to January 4 this yearwas Kluang Rubber Co with a price increase 17.61 per cent followed by InchKenneth Rubber at 17.13 per cent and Riverview Rubber at 14.75 per cent.BBMB Securities, meanwhile, said in its report prices of CPO for this yearand 2003 is expected to hover around RM1,100 to RM1,200 tonnes.“The fundamentals of the plantation sector are still bullish and areexpected to remain intact... we maintain our overweight stance on theplantation sector,” it said.In its latest market outlook, the securities firm said exports of palm oilin December declined marginally by 0.6 per cent to 1.04 million tonnesfrom 1.05 million tonnes in November.While Pakistan and the European Union decreased their imports by 25.6 and5.2 per cent respectively, India raised its imports by 14.4 per cent andChina by 43.9 per cent.China is expected to increase its import quota to 2.4 million tonnes thisyear compared with 1.4 million tonnes last year with 70 per cent or 1.7million tonnes coming from Malaysia.The report also said that exports to India are expected to increase on theback of a drop in import duty on CPO from 75 per cent to 65 per cent.With the anticipated strong demand for palm oil, BBMB Securities said itexpects the national stock level to continue to deplete from the currentlevel of 1.29 million tonnes.Meanwhile, at the Malaysia Derivatives Exchange, CPO st futures pricesclosed higher last Friday as traders anticipate China to announce itsfirst import quota anytime this week.“China is expected to announce the 500,000 tonnes import quota anytimesoon due to the rise in demand as the Lunar Year nears and the goodproduction figures,” said the trader.The market also focused more on Malaysia’s palm oil compared to Indonesia,its nearest competitior, due to a disruption in shipments at Sumatra’sBelawan port as a result of a sinking dredger which is blocking the port.At the close, January delivery gained RM34 to finish at RM1,175 a tonnewith February, March and April deliveries each gaining RM35, RM36 and RM38to close at RM1,188 a tonne, RM1,196 a tonne and RM1,200 a tonnerespectively.Total turnover increased 993 lots to 2,398 lots from 1,405 lots while openpositions rose 3 contracts to close at 10,705 from 10,705.

WASHINGTON, U.S. 4/1/2002 (The Associated Press) -The AgricultureDepartment is deciding whether to make a cut in the subsidy rate forsoybeans that could anger farmers but save taxpayers as much as $1 billionor more.Government studies say that the subsidy rate for soybeans is too highrelative to other crops and is encouraging farmers to grow too much soy.Last year, farmers harvested 74 million acres of soybeans, 11 million morethan in 1996, when the subsidy rate, or ``loan rate,'' was raised to $5.26per bushel. It has not been changed since.``There is an incredible disparity between what the market is signalingand what the loan rate is signaling,'' said Keith Collins, USDA's chiefeconomist.USDA spokeswoman Alisa Harrison said Thursday that the department willannounce a decision on 2002 subsidy rates sometime this month.Representatives of soybean growers have met at least twice withAgriculture Secretary Ann Veneman in recent weeks to urge her not to lowertheir subsidy rate. Under the 1996 farm law, USDA could cut the rate aslow as $4.92 per bushel, which would save the government more than $1billion.Soybeans are a major crop in several states likely to have close Senateelections this year, including Arkansas, Iowa, Minnesota and South Dakota.Those races could decide which party controls the Senate in 2003.``It is extremely important to soybean producers that that source ofrevenue and income protection stay there,'' said Bart Ruth, a Nebraskafarmer who is president of the American Soybean Association.The government guarantees farmers a minimum income for grain, cotton andsoybeans by providing subsidies when market prices fall below a fixedlevel. Soybeans were selling for more than $7 a bushel in the mid-1990s,well above the $5.26 subsidy rate, but have since dropped to nearly $4.The subsidy rate for corn is $1.89 per bushel, while market prices areslightly over $2, so growers receive no payment for that crop.USDA has paid about $4.5 billion in subsidies on all 2001 crops, with $2.7billion of that going to soybeans alone.A 1999 study by the General Accounting Office said that the subsidy ratefor soybeans would cover about 250 percent of the cost of growing them,while the corn rate would cover about 150 percent of the cost of producingthat crop.Soybean growers insist there would be plenty of demand for their crop, ifthe dollar wasn't as strong as it is. A strong dollar makes U.S. cropsmore expensive than those from countries such as Brazil that have weakercurrencies.In a letter to Veneman this week, Senate Agriculture Committee ChairmanTom Harkin, D-Iowa, warned her against making what he said was a rumoredreduction of $500 million in soybean subsidies. ``Clearly this is not atime when farmers are in a position to absorb further losses in income,''he said.Lawmakers are considering cutting the soybean subsidy rate as they makerevisions in the 1996 farm law. Soybean acreage would in turn becomeeligible for other types of payments it doesn't receive now.

U.S., Jan. 1--BLOOMINGTON,(Journal Star)--If the past year was big forethanol, 2002 may be the year biodiesel moves into the fast lane.Biodiesel is a mixture of vegetable oil and diesel fuel that reducesengine emissions. It will help in finding use for the glut of soybean oilpresently on the market.As a renewable fuel, it's been in the shadow of ethanol, the corn-basedfuel, but biodiesel showed signs of stepping out on its own in 2001."The growth over the last few years has been tremendous. In 1999, weproduced 500,000 gallons of biodiesel. In 2001, we produced 25 milliongallons," said Judd Hulting, domestic marketing manager for the IllinoisSoybean Association in Bloomington.Biodiesel is sold to three basic markets, Hulting said. "Our threeaudiences are farmers, municipal fleets and over-the- road trucks," hesaid.The over-the-road trucking market is a huge one, using 35 billion gallonsof diesel fuel a year, he said.But to crack that market, biodiesel has to drop in price. Currently the B2blend (diesel fuel with 2 percent vegetable oil) adds 3 to 5 cents agallon to the cost of diesel while B20 is 15 to 20 cents more a gallon.But help may be coming from Washington. Legislation could reduce thefederal tax on biodiesel as well as establish a timetable for increases inrenewable fuel use, he said.Congress may require that all motor vehicle fuel sold in the United Statescontain a minimum amount of renewable fuel. "That would be huge," saidHulting of how the legislation would impact biodiesel.But other things are happening on the renewable fuel front.The Environmental Protection Agency's emission standards for new trucksand buses will take effect in 2007.An agency-mandated reduction in sulfur in diesel fuel (in 2006) shouldspur a boom in the biodiesel market, said Joe Jobe, executive director ofthe National Biodiesel Board in Jefferson City, Missouri.Some fleets aren't waiting for regulations to take effect."After Sept. 11, we had a trucking firm call who asked, 'What can I do?'"said Mark Dehner, market manager for Growmark Inc., a farm supplycooperative in Bloomington."Sept. 11 spurred people to be more cognizant of what's going on. Peoplearound the country decided that if we can grow it (fuel) here, let's doit. Let's have more control over our own destiny," he said.Growmark rolled out its own homegrown fuel campaign in November, providingethanol and biodiesel to farmer members throughout the Midwest, Dehnersaid.The terrorist attacks triggered "an emotional reaction" by customers whowanted to use homegrown fuels, said Chris Miller, spokesman for WorldEnergy in Chelsea, Mass., the nation's largest supplier of biodiesel.The movement towards biodiesel is good news for soybean farmers, said BradGlenn of Stanford, president of the Illinois Soybean Association."In 2001 we saw a lot of great things happen. About 15 states -- evenHawaii -- passed some sort of tax enhancement for biodiesel last year.Unfortunately, Illinois wasn't one of them. Hopefully, we'll see successin 2002," he said.Glenn said education and distribution are the two biggest needs for asurge in the use of the renewable fuel. "We don't have the terminaldistribution that ethanol presently enjoys," he said.Two Illinois bus fleets recently conducted tests with biodiesel, saidHulting of trials at Illini Swallow Co., Champaign, and theChampaign-Urbana Mass Transit District."The fleet managers said it worked great but it comes back to cost. Whenyour're buying thousands of gallons of fuel, every penny counts," Hultingsaid.But fleets that have to meet stringent federal guidlines remain a targetmarket for biodiesel, he said. Transit systems in Cincinnati and KansasCity recently announced plans to use biodiesel in some buses.

30 Decsember, 2001 (Business Times) - TAN Sri Borge Bek-Nielsen drinksneat two tablespoons of the red palm oil every day, convinced it containsall the magical properties that make a man healthy, wealthy and wise.

21, December, 2001(Oil World) - During the past two years the domesticsupply gap for oilseeds in the European Union continued to widen, asoilseed production declined sizably from 17.3 Mn T in 1999 to only 14.2 MnT this year. The increase in crushings and imports during the past twoyears was mainly on account of soybeans. For Oct/Sept 2001/02 we peg EUsoybean imports from third countries at a record 18.0 Mn T (up 0.4 Mn) andsoybean crushings at 17.2 Mn T (up 0.9 Mn). Also the EU import dependenceon oils and fats will continue to rise this season, as interior productionis insufficient to cover the growth in demand for food and non-foodpurposes. EU imports of 17 oils & fats from third countries are estimatedat 5.6 Mn T in Oct/Sept 2001/02, which is almost matching the oil importneeds of India, the world’s largest oil importer. Rising EU imports areseen particularly for palm oil and sun oil. EU soya meal disappearance isexpected to surge to a record 28.6 Mn T in Jan/Dec 2001 and to 28.8 Mn inOct/Sept 2001/02. For the 12 oilmeals we publish details on production,trade and disappearance.

KUALA LUMPUR, Sat. (29 December,2001) - The Malaysian plantation industrywill collapse if workers are given monthly salaries.

Kuala Lumpur, 31 December, 2001 (Business Times) - THE year has indeedbeen good and momentous for Malaysia’s palm oil sector albeit with a fewhiccups here and there, but overall it has been fruitful with the stageand fundamentals all set in place for a promising year ahead.The palm oil industry has proven to be resilient in the face of so manyunpredictable scenarios and obstacles in 2001 but towards the end of theyear it has somewhat changed for the better.Crude palm oil (CPO) prices for the first half of the year were batteredincessantly and was quoted at a ten-year low at RM696 per tonne inFebruary.In the early part of this year and most of last year, palm oil pricescontinued to be battered in the face of intense competition from the world’s 16 other vegetable edible oils.Soyabean, rapeseed, sunflower and sesame oils to name a few, continue toharangue palm oil in the world’s edible oil market contributing to its lowdemand and depressed prices.To make matters more complicated, forecasting CPO prices in the openmarket is akin to a rollercoaster ride and no one can be accurate aboutit.With such a scenario, the livelihood of 420,193 smallholders nationwidewas affected which saw them earning meagre income of between RM150 andRM250 a month.Realising this, the Government put on its thinking cap and shifted to highgear in finding solutions on how to help alleviate the hardships of thesmallholders and the industry as a whole.Together with all the other relevant government ministries and agencies,it did all it can with the Primary Industries Ministry at the helm andcaptained by its minister Datuk Seri Dr Lim Keng Yaik.To name a few, they include the Malaysian Palm Oil Board (MPOB), theMalaysian Palm Oil Promotion Council (MPOPC), Tenaga Nasional Bhd, FederalLand Development Authority, Rural Development Ministry, Rubber IndustrySmallholders Development Authority and the private sector.The sector has also received first-hand attention from Deputy PrimeMinister Datuk Seri Abdullah Ahmad Badawi who chairs a Cabinetsub-committee on “Raising the Income of the Smallholders”.To further attest to the Government’s commitment in alleviating thehardships of the sector it embarked on several initiatives to uplift thealready sagging industry.In March, Dr Lim mooted an idea inconceivable to a few — burn CPO in powergenerators and industrial burners to generate power.The idea will help to off-take production figures which is expected tobreach the 11.5 million-tonne mark by year-end compared with 10.6 milliontonnes last year.Under the plan, some 500,000 tonnes or 5 per cent of annual productioncould to be removed from the market.Tentatively, between 20,000 tonnes and 30,000 tonnes of CPO were to beburned at Tenaga’s power generators.It was a noble idea while it lasted but to date nobody is really sure whathas happened to the initiative since prices were at the RM700 a tonnelevel then compared to the RM1,100 to RM1,200 tonne level currently.It is understood that to date, less than 10,000 tonnes have been burned.Understandably, the industry did not foresee that almost 90 per cent ofTenaga’s power plants are gas-fired and not fuel-fired.For palm oil to be burned, it must first be blended with a diesel variant,medium fuel oil, before it can be burned in the generators.Malaysia’s palm oil industry regulator, the MPOB has also been known toundertake research and development works on biofuel over the past decade.Industry observers questioned what happens when prices of CPO become veryattractive? Do we simply burn it away?But Dr Lim has always maintained the Government’s commitment that theinitiative will not stop and is still on the agenda.Malaysian Palm Oil Association (MPOA) chief executive M. R. Chandran hadsaid in October the initiative has been put on hold except on a researchand development basis.The MPOA groups 96 plantation companies in Malaysia and is seen as adominant force in the industry with a total landbank of over 1.6 millionha.The Government had also in March introduced the replanting scheme, again abrainchild of Dr Lim, for smallholders to replant their ageing oil palmand rubber trees.With a fund of RM200 million allocated by the Government, RM1,000 will bepaid out for every ha of oil palm trees replanted and RM1,100 for rubber.The idea was aimed at removing 600,000 tonnes of CPO from the market byend 2002 with the replanting of 200,000 ha.But the scheme had received lukewarm response when prices improved in thesecond half of 2001 with farmers reluctant to cut trees when the priceswere attractive.Dr Lim said as in October, the replanting scheme which ends in December31, has only seen the replanting of a mere 136ha compared with a total of185,000ha which the MPOB has received in replanting registrations andapplications.Despite the various government efforts, no change or improvement could beseen over the horizon.Prices of CPO continued to be battered for most of 2000 and the first halfof this year, trading well below the RM1,000 a tonne level.CPO averaged at an all-time high of RM2,377 in 1998 to RM1,449.50 in 1999and RM996.50 for the whole of 2000.In July last year, CPO prices averaged RM1,016 per tonne before trading atRM695 a tonne in February, its lowest in a decade.After going through depressed prices for almost the good first half of2001, the sector looked set to be further dragged into the doldrums whensuddenly things changed for the better in the second half of the year.Just when everybody thought such a scenario would continue, CPO pricessuddenly surged 143 per cent across the board at the Malaysian DerivativesExchange to breach RM1,000 on July 12 for the first time in 13 months.It was attributed mainly to a drop in production by 3 per cent to 897,063tonnes in July from 924,855 tonnes in June.That was the catalyst that turned the sector around, and prices have neverlooked back since.Few saw it coming and since then, prices began to firm up to increase atRM987.50 a tonne end-July and went to a high of RM1,215 a tonne in August.Although it dipped slightly in September due to the attacks on the US toRM999 a tonne, it has since began its steady climb to increase 21.5 percent to close between RM1,100 and RM1,200 a tonne last week.Since then, most plantation companies on the Kuala Lumpur Stock Exchange(KLSE) have recorded improved earnings in the third quarter of 2001primarily due mainly to the strong performance of CPO prices.The big boys of the industry such as Sime Darby Bhd, IOI Plantations Bhd,Kuala Lumpur Kepong Bhd and Golden Hope Plantations Bhd, can now breathe asigh of relief after being squeezed by low prices for a larger part of theyear.Most industry observers are in consensus that prices will never touch 1997’s RM2,000 a tonne level again.Chandran, however, said that as long as CPO prices stay above the RM1,000a tonne mark, companies will be happy.“A price of RM1,000 is good enough because it is higher than the cost ofproduction for plantation companies which vary from RM600 a tonne to RM800a tonne.”Most are optimistic that for the larger part of 2002, palm oil prices willaverage RM1,200 a tonne or at least for the first quarter of 2002.Meanwhile, a CIMB plantation analyst concurred saying that the currentrainy season also augurs well for the sector.“The wet spell which is yet to be over will prevent workers fromharvesting oil palm fruits or fresh fruit bunches, which will result in adrop in production and a rise in prices,” said the analyst.To add further to the good news, China formally became the 143rd member ofthe World Trade Organisation last Tuesday, a development that augurs wellfor Malaysia.The republic is set to increase its palm oil import quota to 2.4 milliontonnes from 1.4 million tonnes this year at low tariffs under atariff-rate-quota system.Traders said 70 per cent or 1.68 million tonnes of the 2.4 million tonnesmay well be bought from Malaysia with the balance to be supplied by itsbiggest rival Indonesia.Influential Indian trader Dorab Mistry of Godrej International said duringa recent visit to Kuala Lumpur, palm oil may see a price of RM1,600 pertonne, for at least in the near term.He added that other good news which augurs well for palm oil is theexpected supply crunch of up to 2.5 million tonnes in the production ofrapeseed and sunflower oil, competitors of palm oil.All this is certainly encouraging news for Malaysia. In fact, awareness ofthe nutritional and health aspects of palm oil has grown by leaps andbounds.According to the MPOPC, the marketing and promotional arm of the country’spalm oil sector, palm oil exports in certain countries have jumpedsignificantly.In countries such as Iran, Morocco, the US and the Association ofSouth-East Asian Nations member countries such as Myanmar, Laos, Cambodiaand Vietnam, exports had surged significantly over the past year.Its boss Datuk Haron Siraj said in Iran, for example, from January toAugust this year Malaysia’s palm oil exports increased 2,000 per cent to60,000 tonnes compared with 3,000 tonnes for the corresponding period lastyear.“Likewise, in Vietnam from January to November, the country’s palm oilexports increased 197 per cent to 191,245 tonnes compared with 96,936tonnes,” said Haron.And furthermore, Malaysia is establishing counter-trader arrangements withseveral countries including India, China and the US which will see thepart-payment of construction projects and locomotives in palm oil.Haron, meanwhile, said the country is due for its second round ofreplanting from the current crop which started in the 1960s.Malaysia is the world’s largest producer of palm oil producing 8.32million tonnes in 1996 worth RM9.4 billion.Last year, it produced 10.38 million tonnes worth RM12.47 billion with aplanted area of 3.37 million ha nationwide. Production is expected to hit11.5 million tonnes this year. If prices average RM1,000 a tonne for thewhole of 2002 and exports amount to 10 million tonnes, earnings of RM10billion can be expected from this sector in 2002.