11 January, 2002 (Oil World)

PALM & SOYBEAN OIL

Tightness in sun and rapeoils and demand growth triggered a sharp boost inexports of palm and soybean oils in Oct/Dec 2001. Shipments of the fivemajor countries reached a record 5.86 Mn T last quarter, a boost of 0.6 MnT from a year ago. In Jan/Dec 2001, palm oil exports from Malaysia andIndonesia rose sharply by 2.25 Mn T and combined G-3 soyail exports by 0.9Mn T from a year earlier.

Palm oil exports from Malaysia reached as much as 2.86 Mn T in Oct/Dec2001, up slightly from a year ago. Indonesian exports showed a seasonaldecline but remained about 0.24 Mn T above a year ago. Malaysianproduction is likely to show a larger than usual seasonal decline thisquarter, which will contribute to a strong seasonal decline in exports.

Soybean oil exports from the U.S., Argentina and Brazil are estimated at1.62 Mn T in Oct/Dec 2001, up more than 0.3 Mn T from a year ago. Theirnormal seasonal decline is being postponed to the current quarter.Brazilian supplies of old crop soybean oil are largely exhausted andexports from Argentina will decline sharply this quarter. We expect apronounced shift in world demand towards U.S. soybean oil Palm oil exportsto India dropped by 14% last quarter. In contrast, the G-3 pushed soybeanoil exports to India to a record 1.4 Mn T last year, up 0.55 Mn T. Palmoil exports to China even exceeded the high year-ago level in Oct/Dec 2001and in the calendar year reached a record 2.0 Mn T. (14)

ALL ITEMS AT A GLANCE

Soybean Exports: Rapidly rising exports in Sept/Dec 2001 from Argentina,Brazil and the USA mainly to the EU-countries, Mexico and China due to thetight supplies and high prices of softseeds.

Fish Meal & Oil: Unusually tight world supplies largely due to much lowerthan expected catches and production in Peru where fish meal productionfell by 148 Thd T or 76% in December from the 195 Thd T produced a yearago.

Germany: Increasing production, imports and usage of soybean oil.Production of sunflower oil fell by 20 Thd T or 13% in Oct/Sept 00/01 froma year ago, but imports increased.

West Europe: Decline in EU exports of rape oil to third countries by 470Thd T or 64 % in Jly/June 00/01 from the year before. Rising imports ofsoybeans, soya oil and soya meal especially from the USA and theNetherlands.

Italy: Rising demand for rapeseed oil, mostly due to the expandingbiodiesel production in Oct/Sept 2001/ 02. But high rape oil prices curbedbiodiesel production in recent months.

U.S.A: Increasing world demand for US soybeans and products. Export salesof soybeans amounted to 580 Thd T in the first week of Jan 2002. Officialdata showed lower than expected stocks of the 14 major oils & fats.

Argentina: Still great uncertainty after the devaluation of the Peso to1.40 per US-$.There is an increased danger of inflation due to higherprices for imports. Farmers may be among the biggest winners of thedevaluation but remain reserved sellers on account of the financialinstability in the country.

Brazil: Showers forecast for southern Brazil in coming days will ease themoisture deficiencies but will not be sufficient to erase the danger ofcrop stress.

China: Accelerating purchases of soybeans (about 200-300 Thd T this weekfrom the US). Crushers are likely to stock up their supplies before thenew government import regulations come into effect on March 20. Trade bycountry till Nov 2001

India: Increasing exports of oilmeals, especially of soybean meal inOct/Dec 2001. Estimates for the full season 2001/02.

PALM OIL: Exports of 2 Major Countries (1000 T)Jan/Mar Apr/Jun July/Sept Oct/DecJan/DecMalaysia1999 1671 22852626 2653 92352000 2167 20632218 2831 92792001 2708 27472480 2860* 10795*Indonesia1999 503 5221398 896 33192000 793 8901318 1138 41392001 834 10791587* 1375* 4875*Total1999 2174 28074024 3549 125542000 2960 29533536 3969 134182001 3542 38264067* 4235* 15670*