Archived News

3/3/2003 CHICAGO (AP) - McDonald's plans to switch to a healthiercooking oil in America have been put on hold, the company said.

KUALA LUMPUR, Feb 27 (Reuters) - Ice cream lovers and French fry fanaticswould not know it but these foods put a taste of Malaysia in their mouths.They are dining on palm oil, an ingredient in many processed foods, andunknowingly entering a debate on a controversial, yet key, crop for theSouth East Asian nation and fellow producers.Critics say palm oil contains unhealthy fats and comes from plantationscut from the forest homes of threatened species such as orangutans andelephants.But Malaysia, which earns $4.5 billion a year as the world's largest palmoil exporter, is squaring up to defend its main agricultural crop."We have now got to make a stand. As far as Malaysia is concerned we'vegot a fantastic story to tell, which the outside world does not know,"said M.R. Chandran, the chief executive of the Malaysian Palm OilAssociation that represents 40 percent of the country's growers.Palm oil supporters argue research on fat in the human diet isinconclusive, only a few errant growers cause environmental damage, andthe crop brings valuable income to remote rural communities.Flying into Malaysia's Kuala Lumpur International Airport gives a view ofrow upon row of palms, with oil-bearing fruit bunches lodged among frondsthat flourish in equatorial humidity.Palm oil plantations cover 3.5 million hectares (8.6 million acres), atenth of Malaysia and an area bigger than Belgium.From nothing in the 1950s, the oil palms have ousted the rubber trees ofBritish colonial times to dominate Malaysia's farm sector. Palm oil makesup five percent of exports, valuable diversity in an economy built onelectronics and crude oil.Last year palmoil futures hit 3-1/2-year highs on ravenous world demandfor edible oils and shortages of arch-rival soy oil.But scarcity of suitable new land and perennial problems with foreignlabour mean Malaysian production will soon slip behind that ofneighbouring Indonesia.BLACKENED NAMERampant forest fires on Borneo island in the late 1990s blackened thereputation of palm oil, as haze blanketed much of Southeast Asia forweeks. The fires, mainly in Indonesian parts of the island, were oftenstarted to clear land for oil palms.The fires stoked talk by Western environmental groups of a palm oilboycott, to the alarm of growers and local green groups."Oil palm is not one of those commodities you can say is all bad -- thereare benefits. A boycott would not solve the problem," said Meena Raman,Friends of the Earth Malaysia's secretary general.For plantation workers, poor smallholders and rural economies, oil palmsprovide vital income.Raman differentiates between East Malaysia on Borneo island -- which plansto expand plantations by 700,000 hectares -- and Peninsular Malaysia,where there is scant land for new planting."As far as East Malaysia is concerned, Sarawak in particular, the concernthere is that oil palm plantations are being pushed into lands owned byindigenous people."We feel that there are a lot of threats to the forest -- logging is stillgoing on, then there is dam building and pulp paper plantations -- it'snot just oil palm alone."FAT ISSUEAmong health agencies palm oil is controversial for its high saturated fatcontent compared with soy oil. The effect of different types of fat is acentral element in debate about cholesterol build-up and resultingcoronary heart disease.The World Health Organisation lists cholesterol as one of five factorsresponsible for a third of all disease in the West."The world is living dangerously -- either because it has little choice orbecause it making the wrong choices," the U.N. agency said in its latestannual World Health report.But the Malaysian palm oil industry says research into the health effectsof fat are still unclear."If you took two groups of eminent scientists and nutritionists in Europeand the United States, they would probably disagree," says Chetan Ishrani,a senior executive with broking firm Agritradex, which trades in mostedible oils -- including palm and soy oil."The question is what effects the two different kinds of foods have on thehuman body and the jury's still out on that."JOBS NEEDEDJames Dawos, a senior state government official in Sarawak, says criticsalso ignore the state's development needs, which are more basic thanelsewhere in Malaysia or anywhere in the West."We still need development. We don't want to live on the top of thetrees," he said.Sarawak assigns total protection to 10 percent of its land, 50 percent forforestry and allows development on the rest.But the picture is complicated by native groups that contest the state'sright to develop what they say is ancestral land. They want a greatershare of development benefits.In Sabah, Malaysia's most eastern state, environmentalists are trying tomarry the interests of planters with those of local people and wildlife."We are not talking in terms of a boycott or using alternative oilsbecause then we are just passing the problem from one country to another,"says Andrew Ng, a policy analyst with the Worldwide Fund for Nature.Palm oil trees, which thrive only in the tropics, produce a lot more oilper hectare than rivals such as soybeans and canola.That may prove critical as world population grows."If you want to get the most oil from the least land, palm oil is best,"says Ishrani."It's the cheaper oil so its consumption and production are going to grow,there's no way to stop it."

Friday, February 28 2003 (Business Times)- MALAYSIA’S export sector willnot escape the economic fallout should war break out in Iraq buteconomists say it can buffer the decline by concentrating on domesticeconomic activities.

Friday, February 28 2003(Business Times) - PERU has expressed interest tocooperate with Malaysia in the plantation, agriculture and forestrysectors.

Dhaka, Feb. 17 (AP) - Edible oil refiners have appealed to the FinanceMinister to cancel duty cuts on refined oil imports and remove duties fromimport of crude edible oils. In a memorandum on Sunday, BangladeshVegetable Oil Refiners and Vanaspati Manufacturers Association expressedtheir apprehension that the massive duty withdrawal from refined oilimports would pave the way for intrusion of inferior quality anddate-expired oil.Besides, it would endanger the existence of the country's refiningindustry that invested Tk 2000 crore and employed some 200,000 people, theAssociation said. The memorandum, signed by Association Chairman A RoufChowdhury, suggested that import of refined oil should be allowed only insealed bottles from internationally reputed suppliers to avoid import of"Chernobyl-type" unfit edible oils.The government on February 1 announced major duty cutbacks on refinededible oil imports as a countermeasure against soaring prices. TheNational Board of Revenue (NBR) slashed a total of 61 per cent duties onimport of refined edible oil. The duty cutbacks, aimed at stabilisingedible oil prices in the domestic market, angered the oil refiners who hadbeen arguing for long that they had no hand in the price-hike asinternational market is overheated. As prolonged parleys with refiners,wholesalers and retailers failed to bring down the edible oil price, thegovernment at last came up with the duty cut on refined oil.Earlier, the government reduced duty on crude oil imports to protect therefining industry. Price of crude soybean oil rose by 48 percent in sevenmonths to December - from US$395 per ton in May to $585 in December 2002.Palm oil prices soared from US$370 per ton in May to $492 in December lastyear, marking a 33 percent increase. Last year, a total of 411,000 tons ofcrude soybean and 420,000 tons of crude palm oils were imported -- 65percent higher than the country's annual consumption, according to figuresin the Ministry of Commerce.As of January 16 this year, stocks of crude soybean oil and palm oil were45,000 tons and 53,000 tons respectively. Commerce Ministry officialsbelieved that substantial quantity of the imported edible oil is smuggledto India where prices are very high.

COLOMBIA is seeking Malaysia’s aid to nurture a strong palm oil industryin the Latin American nation as it has large agricultural land for cashcrop cultivation.A high-level discussion is expected to be initiated soon when ColombianForeign Minister Carolina Barco meets Primary Industries Minister DatukSeri Dr Lim Keng Yaik.Colombian Ambassador to Malaysia Fernando Marin Valencia told BusinessTimes that Barco plans to meet Dr Lim during the 13th Non-Aligned Movement(NAM) Summit in Kuala Lumpur.“Malaysia has a lot of expertise, especially in palm oil and naturalrubber.“We are interested in establishing an agreement with Malaysia to get KualaLumpur’s technical support in this area as well as getting Malaysianplantation companies to invest in Colombia,” he said in a recent interviewin Kuala Lumpur.Barco will lead the Colombian delegation to the summit which kicks offwith senior officials meeting today Valencia said he is currently talkingto a few Malaysian plantations companies to invest in palm oil sector inColombia.“Colombia is suitable for palm oil plantations as the country has the sameweather conditions as Malaysia. “We also have bigger areas of land for thecultivation of commercial crops like oil palm and rubber,” he said.He noted that Malaysia, with only about 4 million ha of oil palmplantation, produces more than 55 per cent of world’s palm oil supply.He said the export potential for Malaysian companies is very promising ifthey invest in oil palm plantations in Colombia as palm oil from Colombiacan be exported to the US and Europe.“Malaysia and Colombia can establish a joint venture to plant oil palm inColombia and explore the markets in the US and Europe as Colombia iscloser to the US and not far from Europe,” he said.Malaysian investment in the Colombia’s oil palm sector will be furtherjustified as the expanding economies of China and India will result ingreater demand for palm oil.He said as the combined population of China and India represents 40 percent of the world’s population, Malaysian companies would benefit greatlyif they can supply more palm oil to these countries in the future.Colombia’s export to Malaysia is about US$12 billion to US$13 billion(US$1 = RM3.80), while Malaysia’s export stood at US$100 billion.Currently, Colombia’s global exports are petroleum, coffee, coal, bananasand flowers like roses and orchids.

2/24/2003 (Financial Express) -There is likelihood of a 10 per cent dutycut on crude palm oil (CPO) to be announced by Prime Minister Atal BihariVajpayee during his Malaysian visit beginning on Saturday. The duty-cut isexpected in the face of mounting pressure from Malaysia and domesticvanaspati industry which uses CPO as its principal raw material.According to official sources, "Up to 10 per cent cut in the customs dutyon CPO from the present 65 per cent is under active consideration and ifcleared a formal announcement is expected during Vajpayee's Kualalumpurvisit". However sources say that, "Customs duty on other oils are likelyto be left untouched."The matter has been deliberated upon with Malaysia's primary industryminister Lin Keng Yaik on his visit to India this week. Mr Yaik heldclosed door meetings with several Indian ministers including food ministerSharad Yadav and finance minister Jaswant Singh on the issue."If the duty cut is not announced now, there is a chance of theannouncement being made in the forthcoming Union Budget," said sources.CPO is the single largest imported oil whose purchase has risen to 18.91lakh tonne in the last season from 14.01 lakh tonne in 2000-01. Thedomestic edible oil imports could rise to an all time high of 55 lakhtonne or even more as domestic oilseeds output is pegged to fall to thelowest level in more than 13 years at 154 lakh tonne in 2002-03.

25 Feb, 2003 (Business Times) - MALAYSIA aims to export more crude palmoil (CPO) rather than refined palm oil to India to compete with fastemerging rival Indonesia.

20 Feb. 2003 (Business Times) - THE Malaysian Palm Oil Association (MPOA)will hold a two-day seminar beginning next Monday on Good AgriculturalPractice and Food Safety Management in the palm oil industry.

2/25/2003 (New Straits Times Malaysia) - THIS June, palm oil andeverything associated with its production, can be bought and sold on theInternet when the first transactions take place onhttp://www.oilpalmworld.com, the country's first comprehensive e-commerceportal for an entire industry. The Malaysian-made portal will become aone-stop B2B exchange for all business transactions in the palm oilindustry in Malaysia and overseas. The portal links all players in thepalm oil supply chain, and addresses time-to-market pressure the industryconstantly faces.It is expected to speed up business, raise awareness, increasetransparency, lower costs and be the device used by the industry tointelligently predict global market trends of Malaysia's most profitablecommodity.Among its highlights is that it is likely to diversify the buyer basedrawing smaller buyers around the globe who can be supported by anaggregation method that lumps them together, making them attractive tosellers.Eventually, this is expected to make palm oil prices more competitive andprevent any cartel behaviour among the world's handful of big buyers, nowprevalent in commodities.The web-enabled, browser-based portal can be used by the smallest ofcompanies by simply logging in with a user ID. The site will be up-and-running late March.Companies expected to use the portal are plantation houses, smallholders,refiners, manufacturers, shippers and suppliers of all raw materials andequipment used by producers and users of palm oil.Tomorrow, a soft launch of http://www.oilpalmworld.com will be held at theevening programme of Malaysian Palm Oil Association's seminar on bestpractices and food safety held at the JW Marriot Hotel at Putrajaya."The portal is a one-stop exchange to handle all commerce functions of thepalm oil industry, a virtual marketplace," says K. John Kuruvilla,managing director of Cosville Holdings Sdn Bhd, a private investmentholding company and majority shareholder of Oilpalmworld Sdn Bhd.Its IT partner is Virinchi Integrated Solutions Sdn Bhd, a B2B solutionsprovider for net markets, private exchanges and supply chains.The portal's most obvious feature is that it gathers buyers and sellersunder one roof."Buyers and sellers are scattered globally, connecting them in thephysical world has always been difficult," says Kuruvilla, "but it'seasily done on the Internet. On this portal, smaller buyers and sellerswill find business quickly." As more banking services go online, thebanking related to the oil palm industry can be done on the portal aswell.The e-commerce functions of portal include trading of palm oil and oilpalm products, procuring of raw materials and equipment (like fertilisersand machines), recruitment and chartering vessels. It has functions forauctions, bids and tenders and will be an on-line catalogue for theindustry.Also possible are private exchanges between companies which need privacyfor trade strategies. All transactions are supported by secure softwareand bound by Malaysian law. The portal acts as an enabler of thosetransactions.For the industry, there will be current industry news provided by newsagencies, price watch features, advertising and classifieds. Futurecontent providers include the Malaysia Palm Oil Association, Palm OilRefiners Association of Malaysia and Malaysia Palm Oil Board which havesupported the portal's initiative."The portal also promotes the sustainability of the oil palm cultivation,plus the health and nutritional benefits of palm oil." The project has thesupport of the Ministry of Science, Technology and Environment, theNational Information Technology Council and MIMOS which have funded itthrough the Demonstrator Application Grant Scheme.For industry executives, time savings will be its most attractive feature."Conventionally, transactions are known to take as long as three weeks,"says Kuruvilla. "On an electronic portal, this can be reduced to a day."The portal will remove some layers of costs and reduce dependence onmiddlemen.The portal's revenue sources will come from membership subscription ofwhich there will be many categories based on volumes and scope of use,advertisements and IT packages designed for the palm oil industry.The portal falls in line with the digital revolution now underway in theoil palm industry. Larger palm oil producers began engaging IT in the1980s, mostly for estate operations."We can expect greater connectivity for Malaysian plantations abroad,"says Kuruvilla. Malaysian companies have invested substantially to expandplantation operations overseas, particularly in Indonesia, andcollectively control a landbank of some one million hectares. Most of thisland is already planted or is being planted with oil palms.Although cultivation has moved abroad, marketing of produce is almostexclusively executed in their Malaysian headquarters. These companies arelikely to find an electronic marketplace useful for better co-ordinationof production and marketing.Exports of oil palm products include palm oil, palm kernel oil, palmkernel cake, oleochemicals and finished products. Major buyers ofMalaysian palm oil are India, the EU, China and Pakistan. Numerous smallerbuyers are expected to find it easier to access information through theportal.In 2001, palm oil earnings exceeded RM14.1 billion from exports. Duringthe 1997-1998 financial crisis, palm oil exports exceeded RM22.5 billion,cushioning the higher import bill and helped the Malaysian economy stayrelatively calm even as other Asian nations struggled with their financialstability.Publication: New Straits Times (Malaysia)

NEW DELHI, Feb 23 (Bernama) -- The mission of Primary Industries MinisterDatuk Seri Dr Lim Keng Yaik to India appears to be yielding positiveresults with the Indian Government promising to examine high import dutiesimposed by it on refined and crude palm oil and also the differentialbetween the two.The assurances were held out by the ministers of the two ministriesconcerned, Agriculture Minister, Mr Ajit Singh, and Consumer Affairs, Foodand Public Distribution Minister, Mr Sharad Yadav, with whom Dr Lim hadmeetings during his stay in Delhi before leaving for Bangladesh.The Malaysian Minister was at great pains to explain to the ministers thatwith global production of oilseeds going down and the rising demand, theprices of edible oils were bound to go up, seriously affecting theinterests of the consumers.Dr Lim wanted the Indian government to bring down the duty in the interestof the consumers, who had already been seriously affected.Besides the two ministers, Dr Lim also met the minister for Commerce andIndustry, Mr Arun Jaitly, who would be conveying the request for loweringduties on palm oil to the ministries concerned.With Budget to be presented in a week's time, the Indian Government coulddo no more than promise to have the matter examined. However, mostobservers of the economic scene have suggested a populist budget withState elections taking place and elections to Parliament not far away.In such a scenario, no government could ignore the interests of theconsumers, for whom the Malaysian Minister has been pleading.However, it is difficult to forecast what would be the shape of things tocome with the perennial need of the government to raise revenues. Theprices of edible oils have been rising even in the oilseed producingStates.Dr Lim has said he would be considering to adopt some mechanism by whichthe price of crude palm oil for the top oilseed producing State of Gujaratcould be subsidised.Reports from the adjoining State of Andhra Pradesh have said that edibleoil prices in the state had gone up to record levels.Dr Lim said Malaysia would be willing to export crude palm oil without anyduties if an understanding could be arrived at for Malaysia'sparticipation in crude palm oil refining in India.The Commerce Minister, Mr Arun Jaitley suggested that joint venture forrefining units could be set up in the Special Economic Zones (SEZs) inIndia which would provide the advantage of duty-free import of crude palmoil for export of refined palm oil.Dr Lim meanwhile said he would look into allegations of export of refinedolein with one per cent free fatty acids (FFA), imported as crude palmolein and sold in India as refined palm oil, if the Indian governmentraises the issue.Talking to newsmen later he said: "The specifications were in order andcontended that it was due to duty differential between refined and crudepalm oil that traders were resorting to the practise of mixing FFA torefined olein."Traders were importing the commodity as crude palm oil, which attractedlower duty of 65 per cent against 92.4 per cent in the case of refinedpalm oil, resulting in duty leakage for the Indian Government.The Indian Government, however, had so far not raised the issue with theMalaysian Government. -- BERNAMA

2/18/2003 (Financial Express) - The consumer affairs ministry has made acase for reduction of customs duty on crude and refined edible oil in viewof shortfall in production of oilseeds on account of drought during theyear. According to sources, the ministry, in communication to the financeministry, said that reduction of duty was necessary to keep the prices ofedible oil under control in the domestic market. As per the secondadvanced estimate of crop production released by the agriculture ministry,the oilseeds output was badly hit as a result of drought.According to estimates, the oilseeds production in 2002-03 is estimated tofall by almost 25 per cent to 15.44 million tonne, which is the lowestsince `pre-technology mission' of 12.65 million tonne in 1987-88. Besides,the ministry has also suggested reduction of duty on the import ofoilseeds, which is currently at 30 per cent. This will help refineriescontinue crushing operations. Currently the duty on import of edible oilvaries from 45 per cent on soy oil to 65 per cent on crude palm oil (CPO)and 92.4 per cent on RBD palmolein.The sources in the ministry further added that duty reduction was alsoimportant to prevent instability in prices that occur due to a sharp risein prices in the international market that is a frequent occurrance. Thereis a distinct possibility of sharp price rise in the coming year due to adrop in production of soyabean in the US.Though the import of refined oil in the last year has nearly come to astandstill due to high import duty in the last budget, there is asuggestion to reduce the customs duty on refined oils specially for thesunflower oils and RBD Palmolein oil. According to the latest availabledata, total import of edible oil during the first quarter of the oil year(November 2002 to January 2003) was up by five per cent to 924,474 tonneas compared to 882,138 tonne for the same period of last year. The importof edible oils is reported at 288,496 tonne in January 2003 as comparedwith 272,674 tonne in January 2002. In the total imports palm oil importrepresents 81 per cent.