Archived News

8/7/2002 (Asia Intelligence Wire) - Despite bullish prospects in thePhilippine palm oil industry, local palm oil producers are pushing forcontinued protection against cheap imported palm oil.Representatives of palm oil producers met with Department of Agriculture(DA) officials last week to lobby for the extension of the current 15%tariff rate slapped on imported palm oil. The current rate is set to bereduced by five percent next year.In a telephone interview with BusinessWorld, Agriculture assistantsecretary for policy and planning Segfredo R. Serrano said the DA hasendorsed the local palm oil industry's request to the Cabinet committee onTariff Related Matters (TRM)."They still want the high tariff to be extended until 2004. It wassupposed to be reduced this year but it was already extended to 2003. Wehave already endorsed their position to the TRM. It's now up to Malacanangto decide on the extension,"he said.Low tariffs for imported palm oil are expected to result in stiffercompetition against cheaper palm oil from Malaysia and Indonesia.On the other hand, keeping the tariff wall is also expected to give localvegetable oil producers sufficient protection from a current world glut ofvegetable oils which has been depressing international prices. The slidein prices is due to the significant rise in world palm oil production dueto favorable weather conditions.The Philippines remains a net importer of palm oil and needs to develop atleast 100,000 hectares of oil palm plantation within the next 10 years tobridge the gap in local supply and demand.The country imports approximately P1 billion worth of palm oil every yearto supply local demand, bulk of which comes from local food manufacturingcompanies. The commodity is used mostly as an ingredient for margarine,snack foods, instant noodles and infant formula.BusinessWorld earlier reported that current land area planted with oilpalm is pegged only at 18,000 hectares, way below the country'ssufficiency level. Data from the US Department of Agriculture also showedthat in 2000, the Philippines produced 46,000 tons of palm oil andimported 63,700 tons.

Monday, August 12, 2002 (The Star) - THE MPOPC Seminar 2002, themed “Emerging Trade Issues for Palm Oil” will highlight the current state ofthe industry as well as agricultural and environmental issues pertainingto the planting of palm oil in Malaysia, said Malaysian Palm Oil PromotionCouncil chief executive officer Datuk Haron Siraj.Speaking at a press briefing, Haron said the one-day conference to be heldin Ipoh next Friday would address issues such as claims from overseasorganisations that palm oil plantations were harmful to the environment.“In Malaysia, as much as 72% of the country is still green, of which morethan 50% is still natural forest, with the rest in the form of plantationsand agriculture,” Haron said.He said the conference would enable relevant bodies and experts to sharewith participants the facts and to educate them on what was the actualsituation regarding the foreign claims.Haron said there were still some local nutritionists, for example, whowere not conversant with the true and actual health benefits of palm oiland therefore did not highlight these benefits to the population atlarge.“We want all the participants, be they planters, millers, refiners,nutritionists or otherwise who attend, to be educated on the benefits ofpalm oil, as then they will be able to counter (foreign) accusations ofthe dangers of planting and consuming palm oil,” Haron added.Haron said he felt that many of the issues against palm oil and itsbenefits that were raised overseas, especially those by non-governmentalorganisations, were actually merely a cover for trade issues.

BERNALILLO, N.M., Aug. 6 (PRNewswire) -- U.S. farm leaders participatingin a panel discussion here today expressed concern that governmentpolicies and practices in Brazil may make fair competition with farmers inthat country difficult to attain.Representatives of the U.S. cotton, soybean, and sugar industries, and anational farm leader, noted tax breaks, low-interest loans, and lowenvironmental standards encourage acreage expansion in Brazil. Inaddition, exchange rate devaluations make Brazilian farm productsartificially competitive.In a presentation entitled "Brazil: Poised to Swamp All of U.S.Agriculture," Andrew LaVigne, head of Florida Citrus Mutual, describedBrazil's low interest loans and other subsidies that have led the U.S.government to impose anti-dumping and countervailing duties on Brazilianconcentrated orange juice imports.LaVigne also cited the burden Florida citrus producers face from workerand environmental protection standards that are much higher than Brazil's,and from trying to compete with the Brazilian orange juice industry'sgovernment- tolerated "unprecedented degree of monopoly and monopsonypower" in setting processors' prices to purchase oranges and sell orangejuice.LaVigne noted that Brazilian currency devaluations have had such effectsas cutting Brazilian labor costs to "almost half of the 1992-93 level."Several speakers noted that Brazil has devalued its currency by nearly 50percent just since 1999.Kenneth Hood, a Missouri farmer and chairman of the National CottonCouncil, said special tax breaks and low environmental standards forclearing land have fostered cotton area expansion and noted that "Brazilhas tremendous potential to expand crop area" further.Ron Heck, an Iowa farmer and vice president of the American SoybeanAssociation, said that most Brazilian soybean production "would not beprofitable without government aid," such as tax breaks that reduce theircosts about $40 per acre relative to U.S. tax burdens.Dalton Yancey, outgoing chairman of the American Sugar Alliance, said,"Brazil has built the world's largest sugar exporting machine out ofnearly three decades of sugarcane ethanol subsidies." Without the sucroseethanol program, which absorbs more than half of all Brazilian sugarcane,Yancey said, "Brazil's massive sugar producing and exporting industrywould only be a fraction of what it is today."Regarding the prospect of free trade with Brazil under a proposed FreeTrade Area of the Americas (FTAA), Bob Stallman, a Texas farmer andnational president of the American Farm Bureau Federation, warned, "Wehave to be cautious. We agree with the (U.S.) administration that the bestway to address global agricultural distortions is in the WTO (World TradeOrganization)," rather than in regional or bilateral agreements.The American Sugar Alliance, which sponsors the annual InternationalSweetener Symposium, is a national coalition of growers, processors andrefiners of sugarbeets, sugarcane, and corn for sweetener.

MUAR, Aug 6 (Bernama) -- The move by the government to impose conditionsfor counter-trading in Malaysian agricultural commodities in the purchaseagreements for military armaments indirectly helps to stabilise the pricesof commodities such as palm oil which will benefit the farmers.Defence Minister Datuk Seri Najib Tun Razak said as such farmers shouldnot think that the purchase of armaments involving massive expenditure wasof no benefit to them.

KUALA LUMPUR, Aug 5 (Bernama) -- Malaysia targets to achieve five percentof electricity generation in the country from the renewable energyresources by the year 2005, said Energy, Telecommunication and Multimediaminister, Datuk Amar Leo Moggie."The most abundant sources of renewable energy are from our palm oilindustries scattered throughout the country," said Moggie in his keynoteaddress at the CIRED Regional Symposium and Exhibition on ElectricityDistribution 2002 organised by the International Conference on ElectricityDistribution (CIRED) Malaysia Chapter, here Monday.

KUCHING, Aug 6 (Bernama) -- The Sarawak Natural Resources and EnvironmentBoard (NREB) has identified pesticide residues, chiefly paraquat andglyphosate, in several streams in peat swamp areas where oil palmplantations are located.NREB deputy chairman Dr James Dawos said Tuesday it was one of the mainpollution sources detected by NREB from oil palm plantations which appliedthese pesticides to the crops to control insect pests, weeds, fungi andother problems.

Monday, July 29, 2002 (The Star) - KUMPULAN Guthrie Bhd is set to offergood growth potential in the long term with the ability to cash in onfirmer crude palm oil (CPO) prices, said plantation analysts.They are upbeat on the plantation giant and expect positive contributionsfrom its vast oil palm plantations in Indonesia, Minamas and GuthriePecconina, to the group’s total palm oil output.The Indonesian venture is targeted to increase the group’s total CPOoutput by more than threefold to one million tonnes in 2004 from 500,000tonnes registered last year.Kumpulan Guthrie, in its recent analysts’ briefing, said plantationsoperations were projected to show higher contributions as the Minamasplantation acquired last year had begun to yield fruit and overallefficiency of the plantations had continued to improve.The Pecconina plantation’s mature hectarage is projected to expand from7,697ha this year to 14,046ha by end of 2004.Meanwhile, Minamas has 71% or 199,667ha of matured estates, out of which69% of the total matured areas are at a prime production cycle with anaverage age of four to eight years.Analysts also said growth for Indonesia’s CPO output would exceed that ofthe Malaysian plantations.The rising yield should drive the fresh fruit bunch (FFB) output from theIndonesia plantations at a faster average growth rate of 790,000 tonnesper year compared to 50,000 tonnes per year for the Malaysianplantations.The contribution from Indonesia is projected to raise Kumpulan Guthrie’sFFB output to 4.9 million tonnes in 2004 from 2.4 million tonnes lastyear.Expressing confidence over Kumpulan Guthrie’s investment in Indonesia, itsgroup chief executive officer Tan Sri Abdul Khalid Ibrahim said capitalinvestment in the Minamas plantation was estimated to be RM240mil over thenext two years.He said the group planned to construct another five mills in Indonesia toboost total mill processing capacity to 896 tonnes per hour in 2005 from405 tonnes per hour currently.The total budget for the mills is estimated to be RM80mil this year andRM83mil next year. The group has also budgeted to spend RM60mil andRM18mil respectively over the next two years on the construction ofworkers’ quarters and mechanisation in the plantations.Apart from its Indonesian venture, the group expects its Guthrie CorridorExpressway (GCE) to provide infrastructure access to its landbank in thevicinity.The main rationale of the 25km two-way toll GCE is to provideinfrastructure access to Guthrie’s landbank of 11,650 acres from Shah Alamto Kuang.OCBC Securities plantation analyst said: “The GCE will shorten thecommuting time from the Klang Valley to Guthrie’s five communities in thearea from almost 40 minutes currently to less than eight minutes. This isexpected to at least double the value of the landbank to about RM1 per sqft.”The analyst added: “Should the land value increase by RM1 per sq ft,Guthrie will recover its RM589mil investment cost in GCE as every senincrease in land value will raise group pre-tax profit by RM5.1mil or 1.2%of our projected pre-tax profit of RM432.3mil for financial year 2003.”The expressway, which is scheduled for completion by end-September nextyear, is currently 15.2% completed.However, analysts expect the group’s future property launches to be slow.Since September last year, Guthrie has sold 2,273 units of the total 2,972units of property launched at its three core township developments, namelyBukit Jelutong, Bukit Subang and Sungai Kapar Indah.Total locked-in sales for January to June this year amounted toRM270.7mil. In the coming years, another 6,000 acres have been earmarkedfor development, but progress is expected to be slow and the group’s focusshould remain on high-end products, the analyst said.Meanwhile, Mayban Securities in its report also saw good long-termprospects for Kumpulan Guthrie but questioned its short-term outlook dueto high borrowings and capex for its Indonesian investments.The research unit said productivity benefits from mechanisation would takeanother one to two years to offset the lumpy investment in machinery, flatmanufacturing sales as well as tentative progress in its Indonesiainvestments.However, Kumpulan Guthrie in its analysts’ briefing had said the group wastargeting to reduce its borrowings by 17% to RM2.39bil and improve itsgearing to 0.84 times for financial year 2004 from 1.19 times as at endMarch 2002.

KUALA LUMPUR, July 31 (Reuters) - Indian Farm Minister Ajit Singh saidon Wednesday the situation in many drought-hit areas has worsened butthere was no cause for alarm because the country had enough grains stocks.He also ruled out a cut in customs duties on edible oils."There is no logical reason to reduce customs duties on edible oilsbecause of the drought. We have been importing edible oils at this ratelast year also," Singh said."I think the bull market is here. South American soyoil is beingoffered at $455 a tonne FOB, while olein is cheaper at $425. People shouldbuy palm oil," he added."India has been in the market for a while, buying between 30,000 and40,000 tonnes of oil in a single day. Pakistani and European buyers arealso active," said one dealer.India currently imposes a basic import duty of 85 percent on refinedoils, 65 percent on crude palm oil and 45 percent on soybean oil. Itimports nearly half of its annual oil requirement of about 10 milliontonnes from countries such as Malaysia, Indonesia, Argentina and Brazil.Traders said though India was likely to see a drop in oilseed outputthis year due to poor rains in key growing areas, any sharp rise inimports would be visible only after fresh domestic oil arrivals inNovember-December.They expect the oilseed output in the current winter crop, harvestedin October-November, could fall by 15-20 percent from 12 million tonnes inthe same season a year earlier.

Thursday, August 01, 2002 (The Star) - IT HAS been called the golden cropand rightly so for Malaysia. Introduced to the country in 1870 from WestAfrica, the oil palm is now the most important agricultural crop inMalaysia. According to the Statistics Department, palm oil and palmoil-based products were the country’s second largest export revenue earnerlast year with a combined worth of RM15.1bil.Oil palm is the most efficient oil crop compared to soybean, corn, canolaand sunflower. And palm oil is among the most versatile of oils – it isuseful both as a food product and industrial raw material.Nevertheless there are several hiccups with oil palm production and palmoil acceptance. Production of uniform planting material via tissue cultureis relatively expensive because of the low rate of success. Acceptance ofpalm oil in Western markets is still low – a result of smear campaigns tobrand palm oil as an unhealthy “saturated oil.” (Palm oil actually has aunique mix of saturated and unsaturated oils.) And Malaysia needs tocontinually add value to its palm oil to remain competitive against otherlower-cost producing countries.Hence biotechnology offers unique opportunities to improve this versatileand useful crop. The Malaysian Palm Oil Board (MPOB) – formerly known asthe Palm Oil Research Institute of Malaysia – spearheads the research anddevelopment of oil palm and its products in collaboration with localuniversities.In fact, oil palm is so important it is a major target of the Malaysia-MITBiotechnology Partnership Programme. This and independent MPOB programmesare using biotechnology tools to solve problems with the oil palm. Fromincreasing the efficiency of tissue culture to developing palm oils withnovel uses, MPOB’s biotechnology research into the oil palm runs the gamutof applications.Culture clubIt had been a problem that bothered the oil palm industry since the 1980s.When oil palms were first successfully tissue cultured in the 1980s, itwas hailed as a breakthrough because there was no other way to propagateoil palms vegetatively. (Vegetative propagation is preferred to seedpropagation as vegetatively propagated plants retain all the superiorqualities of the original plant.) But the rate of success for tissuecultured plantlets (as the young plants are called) remains low; between6% and 20%, depending on the material used.Now scientists are going back to the drawing board and looking at thegenes that control development during tissue culture. They hope that bystudying the genes involved, they would be able to identify the reasonsfor the successes and failures, and pinpoint the correct methods to tissueculture oil palm.As part of the project, MPOB is coordinating an effort to create an oilpalm genome map. All the major oil palm plantation companies have pitchedin to assist in this effort. Scientists hope that the maps will provideclues into which and why certain oil palms are more successfully tissuecultured than others.In addition, other teams are looking into improving methods of tissueculture production and automating the processes to reduce the costsinvolved. The ultimate aim is to increase the efficiency and reduce thecosts of producing palm oil plantlets.Bagging the problemThe oil palm has a pesky insect problem. Oil palm’s mostdifficult-to-control pests are bagworms. These caterpillars build bagsfrom leave fragments (hence the name) and live protected inside these bagswhile they continue feeding on oil palm leaves. Sometimes bagworminfestations can get so bad that leaves on palms in entire plantations areleft only with spines. Controlling bagworms with chemical pesticides donot work very well as the caterpillars are hidden inside the bags. Inaddition, pesticides often affect other beneficial insects instead.One alternative method of control which Universiti Kebangsaan Malaysia’sDr Ruslan Abdullah has successfully tested is to protect the oil palm fromthe inside out. Dr Ruslan has put a gene from cowpea, a legume, into theoil palm. This gene produces a substance that makes the bagworm sick whenit feeds on the oil palm leaves. In lab tests, Dr Ruslan has shown thatthis method successfully protects the oil palm from bagworms – inspiringhope that it may eventually be one of the strategies to be rid of this bagof worms without insecticides.Designer oilsThe oil palm is a veritable plant factory. Currently products as diverseas vitamins, pigments and raw material for industrial use are derived frompalm oil.However, plant breeders at MPOB hope to come up with “designer” palms thatwould specialise in the production of specific products or oils.For example, the oil palm for edible oils would be high in oleates – themonounsaturated portion of the oil, making it a healthier oil. Forindustrial uses, there would be an oil palm that is high in stearates.Another type of oil palm could be designed to produced carotenoids moreefficiently for the vitamins and pigments market.But to accomplish these goals, scientists first need to understand how theoil palm produces all these oils. Right now there are different groupsstudying the processes involved in oil and pigment production.Other groups are looking at developing methods to put genes of interestinto the oil palm and designing the constructs – the set of genes thatwill make a gene work as desired – for different uses.But biotechnology could create new uses for the oil palm. Scientists hopeto use the oil palm as a plant factory to produce biodegradable plastics.Currently most plastics are petroleum-based and their production anddegradation may release toxins into the environment. On the other hand,polyhydroxybutyrate (PHB), a biodegradable plastic is naturally producedby certain bacteria under nutrient-deficient conditions. Researchers arelooking into ways where they could put the genes that produce this plasticinto oil palm to enable the palm to be a renewable source of thisenvironment friendly plastic.If the project works, oil palm could be a renewable resource for plasticsthat are biodegradable.Nevertheless all these projects are still very much restricted to thelabs. MPOB foresees that these projects will only be ready forcommercialisation in the next 10 to 12 years. If the current research anddevelopment deliver on their promises, the golden crop may become evenmore valuable to Malaysia in the future.

JAKARTA, July 30 (Reuters) - Top palm oil producers Malaysia and Indonesiawill joint forces to promote the use of palm oil and lift the price of thecommodity, Indonesian Trade and Industry Minister Rini Suwandi said onTuesday.She said officials from the Malaysian Palm oil Board (MPOB), theAssociations of Indonesian Palm Oil Producers GAPKI and the IndonesianEdible Oil Industries were scheduled to sign an agreement forming aconsultative group on palm oil."I and (Malaysian Primary Industries Minister) Lim Keng Yaik will witnessthe signing," Suwandi told reporters.She said the consultative group would focus on efforts to launch jointpromotions, cooperation in research and development, and exchanging marketinformation."We will also cooperate to counter issues that discredit palm oil, such ashealth issues," Suwandi said.She said the group would be the follow up of a broad deal reached byMalaysia and Indonesia in February last year on moves to lift palm oilprices and create better access for the commodity in main buyers India andChina.The two countries have been bitter rivals in the palm oil trade in pastyears due to oversupply in the world market.

PENANG, Wednesday, July 24, 2002 (The Star) - The country’s firstspecially designed prototype van, powered by palm oil, is set to roll outand promote itself next month with a roadshow.The van, also a mobile exhibition unit and costing RM200,000, was designedby the Education and Training in Renewable Energy and Energy EfficiencyCentre at Universiti Sains Malaysia.It would display household items which run on solar energy such as arefrigerator, coffee maker, oven, fan and personal computer.Centre director Prof Dr Kamarulazizi Ibrahim said the van would stop at aschool in each state and two technical schools in Ipoh and Kulim.“Apart from being environment-friendly, the van’s exhaust emission smellslike fried burgers or pisang goreng (banana fritters),” he told reportersyesterday.He said the van also housed six exhibition kiosks used to demonstrateseveral energy-saving solutions.The vehicle would also stop at shopping malls to create awareness amongthe public.“We believe that our future generation must be instilled with knowledge onenvironment preservation for sustainable development,” he said.Centre project manager Assoc Prof Dr Fauziah Sulaiman said the van wouldbe among the highlights at the opening of a journalism seminar onrenewable energy and energy efficiency.Energy, Communications and Multimedia Minister Datuk Amar Leo Moggie isscheduled to open the seminar here on July 29.“The seminar is not on science-related topics. Everyone uses energy whichis necessary for our daily routines,” Dr Fauziah said.Jointly organised by the centre, the ministry and the Energy Commission,the three-day seminar would feature the launching of six books on relatedtopics.(The informations and opinions expressed in this article represent theviews of the author only. They should not be seen as necessarilyreflecting the views of Palm News)

ZAMBOANGA CITY, July 23 Asia Pulse - The palm oil industry, whichcatapulted Malaysia and Indonesia into the global oils trade, may emergeas the "tree of peace and development" for the troubled island ofMindanao.The Philippine Coconut Authority (PCA), the Southern PhilippinesDevelopment Authority (SPDA) and the Mindanao Palm Oil IndustryDevelopment Coordinating Council Inc. (MPOIDCCI) signed a memorandum ofagreement (MOA) to fast track programs for the development of the palm oilindustry and the private sector's commitment to invest in palm oilproduction.PCA administrator Danilo Coronacion said that the country presently has19,817 hectares of oil palm plantations, producing an average of 54,333metric tons of palm oil as against the average consumption requirement of94,400 metric tons."The increasing palm oil needs, particularly in the fast food business andfish canning industry in SOCSARGEN, have further amplified our need toimport palm oil that depletes our meager dollar reserves," he said.Coronacion stressed that in order for the palm oil industry to establishground in the country to be self-sufficient by 2010, the government mustengage the participation of all stakeholders and appropriate sectors toformulate and forge consensus on a policy and strategy framework on thedevelopment of oil palm industries."By 2010, we should have 35,315 hectares of full bearings palmscomplemented with seven units of oil mills with a 20-30 ton fresh fruitbunch (FFB) per hour capacity," he said.However, Coronacion emphasized that the policy and strategy framework mustinclude conditions that may adversely affect the environment. Suchconditions include that planting oil palm shall not be done in coconutareas; production in areas covered by agrarian reform and ancestraldomains shall be under a contract growership scheme; identification ofmarket niche for palm oil, like for food use to minimize competition andprovision of complementation scheme with the coconut oil; and monitoringand regulation in the use of chemical input.The PCA and SPDA have identified some 447,000 hectares of potential areasin the Mindanao and Visayas region suitable for oil palm planting.Foreign investors from Malaysia, who recently visited Mindanao,categorically affirmed that the region, compared to Indonesia, is an ideallocation for oil palm projects since Malaysia's available lands havebecome limited.At present, Indonesia's peace and order situation and investment taxpolicies are also discouraging further investment in palm oil development.They indicated that Mindanao has a favorable investment climate with clearland tenure arrangements, competitive labor costs, consistent andpredictable investment policies, and sound bureaucratic processes.On the other hand, the Philippine commercial attache to Malaysia GlenPenaranda said the Board of Investments (BOI) has intensified theircampaign to negotiate government to government arrangements for plantingmaterials, technology transfer and financing ventures.The Land Bank of the Philippines (LBP) declared that prospective andexisting oil palm growers now ave access to loan packages from rural banksthrough a re-lending scheme.The LBP said these special loan packages have been designed to cater tothe oil palm's gestation period, allowing farmers to enjoy financingbenefits until the oil palm is ready for harvest.