Astrid Wijaya, The Jakarta Post, Jakarta
Palm oil companies are facing increasing pressure from green groups who fear the conversion of forests into plantations could cost the country its rich biodiversity.

The Center for Orangutan Protection (COP) said Monday that in Kalimantan alone, at least 236 plant species and 51 animal species were facing extinction due to the massive conversion of forests into oil palm plantations.

These comments came just a day before the Roundtable on Sustainable Palm Oil (RSPO) holds its sixth annual meeting in Bali. Oil palm growers, processors, traders, consumer goods manufacturers, retailers, investors and Environmental and developmental NGOs will meet to discuss the various issues affecting the palm oil industry during the Nov. 18-20 meeting.

Some issues include the role of small-scale palm oil growers, the RSPO and the government, market standards and biofuels.

“The ignorance and questionable morality of the oil palm…

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by Lim Shie-Lynn

KUALA LUMPUR: The government plans to make it mandatory for palm oil millers to buy fresh fruit bunches (FFB) from smallholders, Plantation Industries and Commodities Minister Datuk Peter Chin said.

He said the move was necessary as smallholders were hard hit when the millers, running at full capacity, turned the smaller planters away.

“As smallholders are affected the most, we will introduce a regulation where millers must buy the FFB from them,” Chin said on the sidelines of a public lecture on Palm oil: Food or biofuel? Policy implications for the future here yesterday.

However, Chin did not say when the regulation would be enforced.

According to news reports, some smallholders have suffered losses when millers rejected their FFB.

The palm smallholders are also affected by plunging crude palm oil (CPO) prices, recording narrower margins as the price of FFB moves in tandem…

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KUALA LUMPUR, Nov 18 - A year ago three Malaysian palm oil producers - Sime Darby, Golden Hope Plantations and Kumpulan Guthrie - merged to form the world’s biggest listed palm plantation company in terms of landholdings. That was just in time for the crash in palm oil prices.

The price of the benchmark Malaysian futures contract has fallen by nearly two-thirds since March. That has Sime Darby - as the new company is called - and other palm oil producers scrambling to cut costs and improve yields on their plantations. The Malaysian government is so alarmed at the sudden downturn that it’s kicking in $56 million (RM200 million) to encourage producers to replant their land with young, higher-yielding palms.

In this tough environment Sime Darby faces a more serious test than most of its rivals. It may have the biggest land bank, but it’s far from…

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THE Federal and State Governments have taken comprehensive steps to help oil palm smallholders in Sabah cope with a worse financial crisis in the future.

CM Datuk Seri Musa said one of the measures currently implemented or considered to be implemented for reducing their financial burden caused by the global financial crisis is setting up a Special Action Committee.

It would monitor the oil palm industry in Sabah because it is one of the State’s main financial resources, he told Bugaya Assemblyman Datuk Haji Ramlee Marahaban.

He said the others include a directive to all the State and Federal Government agencies like Sawit Kinabalu, Sabah Land Development Board (SLDB) and Federal Land Development Authority (Felda) as well as government-linked companies to buy all the produce from oil palm smallholders at a reasonable price (not less than the production cost price).

Financial institutions like Sabah Development…

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Business Times
Monday - November 17, 2008
by W.Q. Mun

This market has yet to complete its short-term cyclical price downturn, raising the possibility that this market could fall to test the RM1,390 immediate support level.

OBSERVATIONS: The Kuala Lumpur CPO futures market sagged under the weight of record high palm oil stocks last week, its fall lubricated by crude oil’s decline to 22-month lows to around US$55 a barrel. Though still technically in consolidation mode its ability to hold above its RM1,390 immediate support level is suspect as it has yet to complete its short-term cyclical downturn.

The actively-trade January 2009 contract was traded to a high of RM1,696 and a low of RM1,435 before settling last Friday at RM1,455, down RM154 or 9.57 per cent over the week.

Palm oil, as with most other commodities and equities, jumped at first on news of China’s US$586 billion (US$1…

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The Star
Monday - November 17, 2008
Kota Kinabalu
Thousands of Sabah rural families involved in oil palm cultivation are in dire straits as mills are refusing to buy their oil palm fruits because of palm oil’s plunging price.

In the Kinabatangan district, as many as 7,000 families are facing financial hardship as they watch fruits rot on trees.

“These families have been suffering for the past two months. The federal or state government has to do something,” said Kinabatangan MP Datuk Bung Mokhtar Radin.

He said most oil palm smallholders were cultivating between 5ha and 15ha and were paid about RM500 to RM600 per tonne.

This translated into profits of between RM500 and RM700 per hectare in good times.

“The last I heard, processing mills were willing to pay RM190 per tonne, that is if they are buying any fruit at all. For the smallholders, this is a money-losing…

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Business Times
Monday - November 17, 2008
by Rupa Damodaran
The battle lines remain drawn for oil palm growers from Malaysia and Indonesia, as pressure groups continue to question the credibility of the Roundtable on Sustainable Palm Oil (RSPO) certification process that was put in place earlier this year.

A three-day conference, themed “RSPO Certified Sustainable Palm Oil - The Gathering Momentum” which opens in Bali tomorrow may seek additional criteria for the certification process which covers the production and development of the palm oil.

RSPO secretary-general Dr Vengeta Rao said four resolutions have been received for the conference, including from Wetlands International and Pan Eco.

Wetlands International wants to call for a moratorium on palm oil from tropical peatlands until a greenhouse gases (GHG) committee has been established and carried out its work.

To strong activists and non-RSPO members like Greenpeace, the RSPO has yet to prove…

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The Star
Saturday - November 15, 2008
by Hanim Adnan
The commodity slump is not just a concern for corporate Malaysia. With the plunge in crude palm oil (CPO) prices, thousands of oil palm smallholders and their families are feeling the pain as well. The smallholders’ average monthly income has eroded by almost 60% and they need the Government’s assistance.

There are 122,000 independent smallholders working 470,155ha of oil palm, accounting for about 11% of the country’s total oil palm-planted area of 4.3 million ha.

“We want the Government to provide a safety net for us during these bad times. Just help us to secure a reasonable selling price for our fresh fruit bunches (FFB),” says TR Boniface Banda Enjah, chairman of the Sarawak-based Subis Smallholders Organisation.

The organisation represents 5,000 smallholders, of whom 15% are oil palm growers. Adds Boniface: “We are seeking an FFB floor price…

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The Star
Saturday - November 15, 2008
by P. Gunasegaram
The way both oil and crude palm oil prices have gyrated on world markets suggests there is much more than just demand and supply driving their prices. And if that is indeed the case, that’s one more area financial market regulators should poke their noses into.

It was not long ago that oil was trading at close to US$150 a barrel and palm oil was nearly RM4,500 a tonne. And there were those who thought that they would go even higher and that the world may face a serious shortage of oil, both mineral and edible.

Subsequently, the prices of both commodities have collapsed spectacularly. Oil is now trading at way less than half the record prices at around US$55 a barrel after an almost relentless rise from the end of January to the middle of the…

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Business Times
Saturday - November 15, 2008
CPO FUTURES
Crude palm oil (CPO) futures prices on Bursa Malaysia Derivatives Bhd were mostly lower at close yesterday, as the market players continued to monitor the crude oil market movement, dealers said.

They said that the benchmark third-month January 2009 contract was down RM25 to settle at RM1,455 a tonne.

A dealer said despite a recovery in crude oil, the market lost ground amid concerns that demand would slow down with mounting stockpiles.

“Fundamentally, the market is bearish because the production is good but the demand is not picking up,” the dealer added.

The dealer also noted that the volatile crude oil market is putting more pressure on the palm oil price, adding, due to the uncertainties, mild profit-taking was in place.

For the CPO contract prices, November 2008 increased RM11 to RM1,472 per tonne.
However, for December 2008, January 2009 and February 2009, the contract…

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