14/11/2007 (Pacific Magazine) - Papua New Guinea sugar maker Ramu Sugar Ltd (RSL) is set to produce its first crude palm oil next month.
 
The company is hoping to cash in on the high crude palm oil prices currently being experienced in the European market.
 
It will launch its first product after work is completed on its new mill in the Markham Valley of PNG’s Morobe Province.
 
“It is my pleasure to report to you that our oil palm mill is nearing completion and we expect the first oil to be produced in December. The prospects for oil palm look very promising. So much so your board has decided to approve an increase in the planted area from 5500 hectares to 7500 hectares. This will enable us to increase the throughput of our mill from 30 tonnes per hour to 45 tonnes per hour,” RSL board chairman Peter Colton told shareholders in a recent meeting.
 
The company’s diversification into oil palm is being done in phases with the doubling of its existing 7500ha plantation in the Dumpu and Walium area the next phase.
 
Industry analysts are forecasting a price of between US$600-700 per tonne for crude palm oil which Colton said should see the company generating extra revenue.
 
“When your board approved the diversification into oil palm it was on the expectation that the price would be around US$450 per tonne. A price better than this will make the investment even more beneficial to you the shareholders,” he said.
 
However, land disputes between village farmers who sell their palm oil fruit to the company could be an obstacle to the RSL capitalizing on the high prices.
 
“Village farmers have around 100 hectares under development at the moment and we hope to increase this to 750 hectares. I am disappointed that the involvement of village farmers is not proceeding as quickly as we would like.  The reason for the slowness relates to land disputes.  Some of these disputes are between families and would be be relatively easy to resolve,” Colton said.
 
The land disputes compelled the Port Moresby Stock exchange-listed company to engage the services of a lands officer, in a bid to help the villagers resolve their differences.

Besides oil palm, the company has also diversified its interest into the cattle industry and supplies beef to both the local and international markets.
 
The company currently supplies about 8000 tonnes of beef to the PNG domestic market and exports another 250 tonnes to the Solomon Islands.