2013
01.31

Palm oil rallied to the highest level in more than three months on speculation that Malaysian stockpiles may drop from a record as a zero export tax lures buyers away from Indonesia, the world’s largest producer.

The contract for delivery in April climbed as much as 1.8 percent to 2,562 ringgit ($825) a metric ton on the Malaysia Derivatives Exchange, the highest price for the most-active contract since Oct. 25, before trading at 2,557 ringgit at 12:22 p.m. in Kuala Lumpur. Futures, 4.6 percent higher in January, are heading for the biggest monthly advance since March.

Malaysia will maintain the zero-tariff policy for a second month in February to help clear stockpiles of the oil used in foods and fuels, while Indonesia, the biggest producer, will raise taxes on crude exports to 9 percent for February from 7.5 percent, the Trade Ministry said Jan. 28. Exports from Malaysia climbed 11 percent to 1.46 million tons in January from a year earlier, according to data from surveyor Intertek today.

“The zero export duty for crude palm oil should help Malaysian shipments,” Alvin Tai, an analyst at OSK Investment Bank Bhd., said by phone in Kuala Lumpur. The pick-up in exports and an expected double-digit drop in production this month, will help reduce stockpiles, he said.

While Malaysia’s exports fell 7 percent in January compared with December, the extent of the decline narrowed as the month progressed, Intertek data showed. In the first 15 days of the month, shipments had been down 21 percent. Inventories reached a record of 2.63 million tons at the end of December, according to the Malaysian Palm Oil Board. Production is typically lowest in January and February each year.

Refined palm oil for delivery in September advanced 0.7 percent to 7,120 yuan ($1,145) a ton on the Dalian Commodity Exchange. Soybean oil for delivery in the same month increased 0.9 percent to 8,808 yuan a ton.

Soybeans for March delivery lost 0.2 percent to $14.76 a bushel on the Chicago Board of Trade, while soybean oil for March delivery was little changed at 52.53 cents a pound.

Source: Bloomberg

2012
11.25

Palm oil producers operating within Ajumako Enyan Essiam District in Central Region operating at Ofobil site led by an impletmentation team have made a passionate appeal to authorities specifically the District Assembly to recognize the immense contribution of palm oil industry towards the growth of domestic and national economy and give the industry the necessary support.

The producers who had previously expressed their challenges in a similar forum reaffirmed that the major problem retarding the progress of the palm oil business is absence of hydro electric power at Ofobil producing site. It was explained that since there was no electricity at the Ofobil production site, producers mostly depend on diesel powered equipment in the production processes which was costly and less efficient to use. For them, the situation had always made it impossible to work at the site at night due to the darkness and general insecurity and thus reducing their working time at the site which in turn affects the level of productivity.

According to the implementation team with the diesel powered machines in use, the plants at the site could only produce eight barrels of oil in a week at the cost of 42 gallons of diesel at the rate of GHS8.00 and that if there were electricity at the site, this production level could be trippled within the given period. For them, the cummulative effect of these was that, the industry was made less rewarding and less attractive at the site, since they had often resulted to low productivity, affecting their incomes and business growth.

The implementation team therefore called on government to make efforts towards the extension of electricity to the site and that fortunately, there had been efforts in recent times that have led to the extension of electricity to the Ofobil Township lessening the distance to the site to 1Km such that it required a little more effort to get electricity to the production site, adding that a separate transformer planted and designated only for use at the site would do them a lot more good.

This was realized during a day’s sanitization activity organized in Mankessim, the District capital. The sensitization exercise was sponsored by the Business Sector Advocacy Challenge Fund (BUSAC Fund) under the support of DANIDA, USAID and the European Union. It was under the theme “Advocating for the provision of electricity to boost production of palm and kennel oil at Ofobil”. The activity recorded an attendance of 271 participants made up of 174 males and 97 females.

The program was organized by the Ajumako Enyan Essiam Palm Oil Producers Association (AEEPOPA) to raise awareness of the association’s members and instill in them a sense of ownership of an advocacy action meant to address electricity problem facing the association at its palm oil production site at Ofobil.

On behalf of the implementation team of the action, the chairman of the association, Mr. Owusu Acheampong reiterated that oil palm production started in the 1820s and that despite Ghana’s efforts in the industry, Malaysia which learnt lessons on the industry from Ghana is far ahead of Ghana in reaping the benefits grounded in the industry due to the adequate attention given the industry in Malaysia. The chairman lamented that upon all the viable nature of the palm oil business, it had over the years enjoyed limited support from the central government. This according to Mr. Acheampong has contributed to the gradual dwinling surrounding the industry.
He recounted the relevance of the oil palm industry and the numerous benefits it provided, such as the exports of its products (palm oil and kennels) aside the local domestic and industrial use of such products and that the industry had been economically helpful to the producers of palm oil and kennel oil at the Ofobil area who depended on it to generate a living.

The chairman stated that oil palm production served as employment for persons in the business, mentioning the medinal value component of palm oil as a major merit for nursing mothers/care givers. He further explained that palm oil can be used to cure sores in the stomach and a common source of nutrition when used in the preparation of soup and eaten with food.

Amid standing ovation from the participants Mr. Acheampong intimated that tapping of palm wine and the growing of mushroom on the dead and rotten trees, weaving of baskets ( the straw of the tree), roofing of houses and hats/ building of thatch houses, animal feed(oil palm leaves), source of fuel/fire ( kennel shell) in the blacksmiths and homes as well as preparation of soaps are some of the numerous benefits dervived from the oil palm tree.

Hierachically, unstable market prices for the oil palm products and the bad nature of the roads to the industrial site according to the implemetation team are other problems facing the oil palm industry at the Ofobil site.

Contributing to the subject , Mr. John Yaw Akparep Business Service Provider/Consultant to the association urged members of the association not to relent in their effort to pledge their unflinching support to the implementation team, adding that it is only through collective effort that will help overcome the current problem facing oil palm production at Ofobil producing site. He took the opportunity to appeal to the government through the Ministry of Trade and Industry to help provide electricity to oil palm producers at Ofobil.

The BUSAC Fund monitor to the association, Mr. Seth Komla Nutakor commended the association for organizing a successful sensitization activity and encouraged them to cooperate to make the action succeed for the benefit of all. He advised the leadership of the association to make judicious use of the grant to achieve the desired results.

Source: GhanaWeb

2012
10.14

TOP EXPORTERS: Malaysia and Indonesia must create a win-win partnership heading

PALM oil accounts for the largest share of the global edible oil market. This is estimated to be 40 per cent. Soya bean oil is now in second place. Malaysia and Indonesia control almost 90 per cent of the market. More than 80 per cent of the world's palm oil comes from Malaysia and Indonesia.

Malaysia, which at one time was a leading producer, is now behind Indonesia. Production in Malaysia has stagnated at about 18 million tonnes a year. Available land is limited. The only area left for expansion is in Sarawak. Even there, expansion is constrained by deep peat soils, which cost more to develop.

Malaysia, despite some unfounded claims by non-governmental organisations, still remains committed to maintaining the country's more than 60 per cent of natural forest cover, legislated as permanent reserves. Despite this, many NGOs, for reasons best known to them, have not stopped criticising palm oil.

Since Malaysia and Indonesia control 90 per cent of the world's palm oil market, one would expect them to work together to get the best returns from palm oil. It is only logical that the two countries pursue a win-win collaboration. Unfortunately, they have not. The competition has heated up.

Recently, Indonesia changed its palm oil export duty structure, denying palm oil refineries in Malaysia marketshare.

The Indonesian government introduced new lower export duties on both crude and refined palm oils. The new duty regime also includes an export tax differential between the two oils. Experts agree this downward revision of the export tax structure for crude palm oil (CPO) and refined palm olein is likely to have implications for the global palm oil market.

The export marketshare between two of the world's largest exporters, Malaysia and Indonesia, will see change, most likely favouring Indonesia. As a result, many expect increased investments in the refining sector in Indonesia. The move will intensify Indonesia's competition with Malaysia. In the end, it will be a lose-lose situation for both.

Export tax on refined palm olein was reduced from 25 per cent to 13 per cent. For crude palm oil, the duty cut was smaller, from 25 per cent to 22.5 per cent. What is clear from the adjustment is that the Indonesian government wants to promote the export of processed palm oils and capture the benefit of value addition locally. This will most likely upset the refining business in markets such as India, which also deploys the duty structure to encourage downstream investments in edible oils. How would India respond?

With export tax nearly halved, the export competitiveness of Indonesian refined oils will improve considerably, at the expense of refiners in Malaysia.

At the same time, a much smaller duty reduction in crude palm oil means that for the export market, the product will continue to remain relatively more expensive and, therefore, less competitive. This, in turn, will encourage larger local sales of CPO to domestic refiners. It is also likely that CPO producers may set up fresh refining capacities to take advantage of the fiscal concession.

Given the volatility of the global vegetable oil market and somewhat fickle nature of government policies, investors will be more cautious in building new refining capacities.

But Malaysia will not keep quiet. The government recently added two million tonnes of CPO to be exempted from export duty. This may have not been well-accepted in Indonesia. But the move has also rattled the refiners in Malaysia.

Whatever it is, production and export of palm oil products is an important economic activity for Malaysia. The country can hardly afford to let go of its competitive edge or its share of the export market.

For Indonesia, the government has been facing the dilemma of having to ensure consumer-friendly palm oil prices for the domestic market and, at the same time, maximising export marketshare.

With global vegetable oil prices and palm oil prices ruling at relatively high levels for the past three years, the Indonesian government's industrial policy has begun to focus on promoting downstream and value-added production by incentivising such industries.

The problem is that it has not helped Malaysia, which has also strived for years to build its downstream business. Instead of this lose-lose fight, Indonesia and Malaysia should gang up and look for a win-win partnership.

Source: New Straits Times

2012
05.25

KUALA LUMPUR: London-listed New Britain Palm Oil Ltd (NBPOL) pledged to have all its palm oil mills 100% Roundtable on Sustainable Palm Oil (RSPO)-certified by end-2012, through fully traceable, segregated and sustainable palm oil.

As a top five producer of RSPO Certified Sustainable Palm Oil (CSPO), in both production volume and area, NBPOL recently enabled the RSPO to achieve six million tonnes of CSPO through the latest certification of its mill in Poliamba, Papua New Guinea (PNG).

Johor state investment firm Johor Corp is a major shareholder of NBPOL, which is is based in West New Britain Province, PNG.

Said Darrel Webber, secretary-general of RSPO: “This landmark achievement in PNG, a significant growing palm oil market, encourages us to continue our vision and global effort in the production of sustainable palm oil according to good environmental, social and economic standards.

“Seven per cent of annual production capacity is contributed by PNG, which makes it the third largest CSPO producer in the world after Indonesia and Malaysia. Approximately 30% of the oil palm growers in PNG comprise smallholders.”

Source: The Star

2012
05.14

All Cosmos uses bio-technology to improve fertiliser quality

THE recycled biomass industry is one that is growing at an ever-steady pace throughout the world. In Malaysia, awareness of using recycled biomass products to be more eco-friendly is on the rise.

All Cosmos Industries Sdn Bhd, a pioneer in bio-organic fertilisers, is a 100% subsidiary of All Cosmos Bio-Tech. All Cosmos is a Malaysian manufacturer and marketer of high-grade bio-organic and bio-chemical fertilisers. They strive to be the innovative driving force in the bio-technology industry whilst helping to improve the country's ecological status.

“This industry will continue to grow as environmental awareness increases,” says All Cosmos Industries senior regional and marketing manager Alex Tan. The need for recycled biomass in the oil palm industry is also great, her adds, due to the Ganoderma Basil Stem Rot disease which affects mature palms and causes the internal tissues surrounding the base of the oil palm trees to rot. By using fertilisers produced with recycled biomass with the addition of good bacteria, the disease can be prevented.

The company believes that using a mixture of organic material, inorganic material and effective microorganisms can increase the quality of fertiliser. The organic materials used are the biomass waste from cocoa, coffee, oil palm and paddy plantations. The inorganic materials used are chemicals such as urea, ammonia sulphate, rock phosphate, muriate of potassium amongst others. Examples of effective microorganisms that are used are Rhizobium trifolii, Azotobacter vinelandii, Herdersonia, and Trichoderma.

Palm protection: The use of fertilisers made with recycled biomass with the addition of good bacteria can prevent Ganoderma Basil Stem Rot disease which attacks oil palm, says Tan.

Most chemicals are water-soluble. When inorganic fertilisers are used on oil palm plantations, especially during monsoon seasons, the trees will be less likely to absorb the nutrients as the rain will wash them away. This causes a major problem for the ecosystem, as the chemicals leak into the water supply through the soil.

Tan says the effective micro-organisms assist by helping the soil progress and softens it. It also prevents diseases and contributes to the environment by making the chemical portion of the fertiliser and the soil's heavy metal content harmless. Also, by including microorganisms in the fertiliser, it will reduce the amount of chemicals needed.

The ideology of the company actually started when group chairman and chief executive officer Datuk Tony Peng Shih Hao came to Malaysia from Taiwan. He was impressed with Malaysian cuisine and also with fruits such as jambu air. The fruit in Taiwan was a lot larger than the ones he found here.

He found that Malaysian plantations were more geared towards using genetically modified seedlings and he felt that they failed to look at the bigger picture. Peng foresaw the potential in the agricultural industry in Malaysia due to the shortage of technology and investors to sustain the industry.

The idea of adding effective micro-organisms to fertiliser came from Taiwan. Combining this factor with the agriculture opportunities in this country, Peng believed that plantations here could see a much better growth and quality of their produce.

To produce the fertiliser, first, the plant-based organic raw materials are put through a fermentation process with the addition of effective microorganisms. The fermentation process usually takes one to two years. However, with the use of effective micro-organisms, the process is complete in only a month.

Next, the fermented product and chemical raw materials (urea ammonia sulphate, rock phosphate, potassium, magnesium, boron and other trace elements) are put through a machine. The first level of the machine is an infrared ray separation machine that separates nitrogen, phosphorus, potassium, magnesium and other chemicals based on the ratio required with a computer prescription.

Then, it is put through another progress that grinds the product and dries it. Then, it is pelletised and put through a few temperature-controlled procedures. First, the pellets are exposed to temperatures up to 100°C to eliminate all unwanted bacteria. Good bacteria are then sprayed onto the pellets.

Then, the pellets are immediately frozen to keep the bacteria in a dormant state. After that, the pellets are packaged with a manufacturing by-date of 24 months. Finally, the pellets are put through strict quality control measures before being released for distribution.

The challenge that recycled biomass companies face is that more and more plantations are recycling their own organic waste to produce their own fertilisers. However, Tan says that the fertilisers that these plantations produce are incomplete as they do not contain the effective micro-organisms.

He says that without help from the effective micro-organisms, the oil palm trees are still susceptible to the Ganoderma disease.

All Cosmos procures the biomass waste from several suppliers such as Yayasan Pelajaran Johor for palm oil waste, Delfi Cocoa (M) Sdn Bhd for cocoa waste and Super Coffeemix Manufacturing Ltd for coffee waste. It acquires paddy waste from Kelantan, Kedah and also Thailand. It has contracts with each of its suppliers to supply the biomass waste in bulk at a fixed price.

Over the past 10 years, prices of biomass waste have increased at least two-fold due to demand. Even so, All Cosmos stays competitive by buying its supply in contracts.

Bags of fertiliser stored at the All Cosmos warehouse.

This means that it procures the biomass waste in bulk at a fixed price and for a fixed number of years. Its suppliers are chosen based on their capabilities to provide the supplies that are high in quality, and are able to provide the necessary quantity in good time. It does not risk procuring products that are inconsistent and inadequate.

The fertilisers it produces cater for oil palm, vegetables, fruits, flowers and rice plantations.

Besides catering for the Malaysian market, All Cosmos distributes their fertilisers to countries across the greater Asia-Pacific region such as Indonesia, Vietnam, China, Singapore, Taiwan, Myanmar, and the Philippines. It is currently in the midst of entering the Cambodia market.

Plantations it is currently working with include IOI Corp Bhd's plantation division Kuala Lumpur Kepong Bhd, Rimbunan Hijau Group, Sabah Softwoods Bhd, Felda, and Felcra on oil palm. All Cosmos also works with rubber plantations such as Lembaga Getah Malaysia and Risda.

The application of fertiliser is dependent on the type of crop, plant age, soil nutrient status, weather conditions and management practice.

The company is striving to create awareness of bio-organic fertilisers by promoting their products at events hosted by the Malaysian Palm Oil Board, International Society of Planters, Malaysian Agricultural Research and Development Institute and other plantation organisations. They also send consultants to plantations to educate planters on the effectiveness of the fertiliser and also how their produce can be improved.

Its long-term objectives are to create a bigger impact economically by increasing the productivity of the work force, improving the efficiency in the use of farmland, and transforming the industrial structure into a knowledge-based economy.

At the packaging department of All Cosmos’ factory in Pasir Gudang, Johor

It hopes to reach ecological growth and to also be internationally competitive.

All Cosmos has high faith in narrowing the gap in living standards between urban and countryside folk.

The company was the first to combine chemical, and organic material and microbes into fertiliser. It was incorporated in 1999 and currently produces 20 different types of fertilisers that are distributed locally as well as for the larger Asia Pacific region.

A modern plant was built in Pasir Gudang, Johor, and completed in 2001 to meet increasing demands for its products. Construction for a second plant in Sabah has just started and completion is expected to be in September this year.

All Cosmos currently largely focuses on the oil palm sector as the volume and potential are higher. Between 2000 and 2011, the areas planted with oil palm trees in Malaysia increased from 3.38 million hectares to 5 million hectares.

The end product: fertiliser pellets

Meanwhile, research on paddy, rubber and vegetables is currently in progress.

The company is currently working with Universiti Teknologi Malaysia to cultivate effective micro-organisms, as research has shown that home-grown microbes are more effective and efficient.

It is also currently working on producing a 4-in-1 formula that includes more added values in the fertiliser, depending on current and future needs.

Source: The Star