Business Times
Friday - October 31, 2008
CPO FUTURES
Malaysian palm futures closed higher yesterday after crude oil hit US$70 a barrel in Asian trade, traders said.

The market also rallied ahead of a government announcement on replanting plans, aimed at helping to boost the palm oil price.

Malaysia, the No.2 palm oil producer, will spend RM200 million (US$56.6 million) to encourage replanting of oil palm, Prime Minister Abdullah Ahmad Badawi said yesterday after the market closed.

The benchmark January contract on the Bursa Malaysia Derivatives Exchange rose RM125, or 8.71 per cent, to RM1,560 ringgit (US$441) a tonne.

Contracts for other traded months rose between US$65 and US$142, with overall volume of 15,951 lots of 25 tonnes each.

“The main reason was crude oil, which passed US$70 during the day. If oil continues to go higher, and soy oil follows, then the market will stabilise,” said a trader at a Malaysian brokerage,…

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KUALA LUMPUR, Oct 30 (Bernama) — Prime Minister Datuk Seri Abdullah Ahmad Badawi on Thursday announced an allocation of RM200 million for replanting 200,000 hectares of oil palm nationwide, saying the time when the price of palm oil was low was good to replace low-yielding, old palms.

He said the replanting would give rural smallholders the opportunity to maintain their yield and step up downstream industries.

“The rise in supply of palm oil will result in an increase in the downstream industries. This is important as the government regards the oil palm industry as strategic because the product is a national resource and the sector provides many job opportunities,” he told reporters after chairing a meeting of the Cabinet committee on the Competitiveness of the Oil Palm Sector, at Parliament House here.

“Palm oil is used not only to produce foodstuff but also in making cosmetics and medical-related…

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Alfian, The Jakarta Post, Jakarta
Following the issue of a government regulation mandating the use of biofuel in all sectors, state power company PT PLN has started to operate a power plant fired by crude palm oil (CPO) which it claims to be the first of its kind in the Asia Pacific region.

PLN’s director Murtaqi Syamsuddin said the power plant had a capacity of 10 megawatts and was located in Dumai, Riau Province.

“This is a pilot project. The power plant has been operated, but is still at the commissioning stage,” Murtaqi told reporters on Wednesday.

Murtaqi said the power plant was initially fueled with diesel but was later converted to a crude palm oil (CPO)-fueled power plant by installing converter equipment at the plant.
“The equipment basically converts the CPO to fuel,” he said, adding that the cost for this pilot project was covered by…

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By : John Teo

I HAD occasion to speak with a 19-year Malaysian resident in the Philippine capital of Manila recently who is in the palm oil business.

The way I noticed how supermarket shelves there are stocked with palm oil-based cooking oil, I would have thought he was onto something big, given a total Philippine population now fast approaching 100 million.

Not so, my new-found Malaysian acquaintance there confided. For starters, the Philippines is still largely a coconut country. Coconut trees have long replaced natural vegetation on many a hill slope across this 7,000-odd island archipelago. Most existing infrastructure is thus understandably geared towards producing, refining and distributing coconut oil.

So what is a Malaysian palm oil man doing for nearly two decades in such a nearly virgin country as far as our most famous vegetable oil export is concerned? He claims to be just a bit,…

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The Star
Friday - October 31, 2008
by Hanim Adnan
Petaling Jaya
This will lead to deferment in shipments and re-negotiation of deals

Contract defaults on palm oil are expected to rise further in the next three months due to the current sharply discounted crude palm oil (CPO) prices.

This will lead to a deferment in palm oil shipments and a re-negotiation of import deals, particularly with China and India.

Analysts said palm oil traders and importers are defaulting because they had bought at much higher prices.

Industry observers told StarBiz that heavy import defaults from India were visible from as early as June, followed by China over the past two months.

In August, China importers were reported to have defaulted on at least 40,000 tonnes of palm olein while India defaulted on about 100,000 to 120,000 tonnes of vegetable oils.

More recently, it is believed that importers have…

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Business Times
Thursday - October 30, 2008
CPO FUTURES
MALAYSIAN palm futures finished lower yesterday amid worries that buyers will seek palm oil from rival Indonesia after Jakarta scrapped a tax on palm oil exports, traders said.

Indonesia’s finance minister said on Tuesday the export tax on crude palm oil had been cut to zero per cent as part of a package of measures intended to shore up confidence in financial markets.

“I think in the long run, a lot of importing countries, especially those with refining capacity like India, will import crude palm oil from Indonesia,” said a trader at a Kuala Lumpur-based brokerage.

The benchmark January contract on the Bursa Malaysia Derivatives Exchange finished RM24 ringgit lower, or 1.64 per cent, at RM1,435 (US$401) a tonne.

The January contract hit a low of RM1,331 per tonne on Tuesday, the weakest since mid-August 2005.

Contracts of other traded months dropped between RM13…

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Business Times
Wednesday - October 29, 2008
By lowering the stock, it is hoped that prices can stabilise at RM2,000 a tonne, says the Associated Chinese Chambers of Commerce and Industry of Malaysia

The Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) has asked major crude palm oil producers — Indonesia, Malaysia and Thailand - to reduce their stock by one million to 1.5 million tonnes to stabilise prices in the global market.

“At the current price, we are running at cost. We are not making profit,” said its president Tan Sri William Cheng on the sidelines of a seminar themed “Is Oil Palm Still The Glittering Star”.

Palm oil prices are now hovering at RM1,450 a tonne from the highest price of over RM4,000 a tonne early this year. The cost of production is about RM1,300 per tonne.
Cheng said Indonesia, Malaysia and Thailand have a…

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Business Times
Wednesday - October 29, 2008

Indonesia has cut the export tax on crude palm oil to zero per cent from 2.5 per cent previously

Malaysian palm futures dropped more than 4 per cent by mid-day today amid worries that buyers will seek palm oil from rival Indonesia after Jakarta scrapped a tax on palm oil exports, traders said.

Indonesia’s finance minister said yesterday the export tax on crude palm oil had been cut to zero per cent, as part of a package of measures intended to shore up confidence in financial markets.

“News from Indonesia is going to be closely monitored. That’s bearish news for us because buyers will import more from Indonesia,” a trader at a Kuala Lumpur-based brokerage firm said.

The benchmark January contract on the Bursa Malaysia Derivatives Exchange dropped RM60, or 4.11 per cent, to RM1,399 (US$399) a tonne by mid-day.

The January contract hit a…

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Business Times
Wednesday - October 29, 2008

Malaysian palm futures recouped losses to finish 5 per cent higher yesterday, after hitting a fresh three-year low earlier, supported by a rebound in crude oil price, traders said.

The rally in Asian equity markets and soybean oil prices also helped boost sentiment, they said.

Palm prices could extend their rebound today if Wall Street finishes higher yesterday, a key factor that will set the tone for trading in Asian markets, said a trader at a Kuala Lumpur-based brokerage firm.

The benchmark January contract on the Bursa Malaysia Derivatives Exchange rose RM69, or 4.96 per cent, to RM1,459(US$377) per tonne, coming off a low of RM1,331, the weakest since mid-August 2005.

Other traded months rose between RM4 and RM61. The overall volume stood at 17,189 lots of 25 tonnes each.

Oil rose toward US$64 yesterday, tracking a recovery in European and Asian stock…

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Business Times
Wednesday - October 29, 2008
by Zaidi Isham Ismail

Crude palm oil (CPO) prices, which have lost 68 per cent in value, may continue to take a beating in the months ahead amid a bleak global economy, weakening demand and sliding crude oil prices.

TH Plantations Bhd managing director Datuk Rashidi Omar said CPO prices have taken a beating similar to other commodities due to the global financial turmoil.

“CPO prices are now benchmarked against crude oil and since crude oil is down, CPO will follow suit,” Rashidi told Business Times in an e-mail.

He expects CPO prices to go up soon to around RM2,500 per tonne when Malaysia implements its biodiesel policy.

“What Malaysia needs to do now is to reduce stock through burning of CPO as what has been done before and encourage replanting of old oil palm trees,” said Rashidi.

CPO prices for the benchmark January contract on…

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