Friday, October 19, 2012

20121019 1737 Palm Oil Related News.

VEGOILS-Palm oil edges up on demand view, set for weekly gain
Fri Oct 19, 2012 1:55am EDT
* Palm oil futures up on demand from India ahead of festive
    * Futures on track for 0.6 percent weekly gain
    * Prices capped by high inventories -analyst

    By Anuradha Raghu
    KUALA LUMPUR, Oct 19 (Reuters) - Malaysian palm oil futures
rose on Friday, with market players confident of a recovery in
demand thanks to strong Malaysian exports in the first half of
the month and a major festival next month.
    Friday's light trade was enough to put palm oil on track for
a second weekly gain, buoyed by expectations of stronger demand
that could ease record stocks.
    "There are more purchases from India and China - India
especially - because Deepavali is coming soon. They need to
stock up more on palm oil," said Malaysia's Public Investment
Bank analyst Chong Hoe Leong, referring to the Hindu festival of
lights set for Nov. 13.
    "The current crude palm oil price is quite attractive for
purchase because it's at the low base," he said, but warned that
inventory levels are expected to stay consistently high for the
remainder of the year.
    By the midday break the benchmark January contract
on the Bursa Malaysia Derivatives Exchange rose 0.7 percent to
2,514 ringgit ($825) per tonne. Prices have lost one-fifth so
far since the start of the year.
    Total traded volumes stood at 6,374 lots of 25 tonnes each,
much thinner than the usual 12,500 lots as investors stayed on
the sidelines ahead of the weekend.
    Despite hopes for an improved exports trend, analysts say
inventories, which hit a record high in September, remain
worrying as palm oil production shows no signs of slowing, and
Malaysia struggles to push out shipments quicker amid weaker
global economic growth.
    "For next year, it is a bit challenging for palm oil because
we can see a slowdown in market activity especially in the major
consuming countries," Chong said.
    "That will be the major concern for the palm oil market,
despite Malaysia recently imposing a lower tax structure
starting from next year," he added, referring to the tax cut
from the current level of 23 percent of the export price per
    Brent blend crude oil, an important indicator for the palm
oil biofuel market, held above $112 a barrel on Friday, but
remained on track for its third weekly fall in five weeks as
supply concerns diminished with the imminent restart of
Britain's largest oilfield.
    In other vegetable oil markets, U.S. soyoil for December
delivery fell 0.8 percent in early Asian trade. The
most-active May 2013 soybean oil contract on the Dalian
Commodity Exchange were up 0.2 percent by the midday break.

U.S. officials to visit Indonesia for palm oil emissions talks
By Michael Taylor and Yayat Supriatna
JAKARTA | Fri Oct 19, 2012 4:21am EDT
(Reuters) - The U.S. Environmental Protection Agency will visit Indonesia next week, officials said on Friday, in what may prove a crucial step in the battle to meet green standards and open up a potentially huge market for the world's top palm oil producer.
Indonesia is seen as a key player in the fight against climate change and is under intense international pressure to curb its rapid deforestation rate and destruction of carbon-rich peatlands.
A recent blow to the Southeast Asian palm oil industry, which supplies more than 90 percent of world supplies of the edible oil, came in late January when it failed to meet greenhouse gas saving standards to qualify for the U.S. renewable fuels program.
The U.S. EPA said palm oil converted into biofuels in Indonesia and Malaysia cut up to 17 percent of climate warming emissions, falling short of a 20 percent requirement to enter the world's largest energy market.
Next week an EPA delegation will visit a palm oil plantation in Riau province, opposite Singapore on Sumatra island, and then meet the Indonesian agriculture minister in Jakarta, Gamal Nasir, director general of plantation at the ministry told Reuters.
"The visit is very important for both the EPA, American people and the Indonesian government and its people," Nasir added. "This is a good step to prove what EPA claims and Indonesia argues.
"We will be open up to them and prove our arguments in the field."
A senior spokeswoman at the EPA said that the group had been invited and would visit Southeast Asia next week, but was unable to give any further details.
Palm industry figures, including the Indonesian Palm Oil Board (IPOB) are due to be part of next week's EPA visit. The IPOB declined to comment.
In the last few years, Indonesia has seen rapid growth in production of palm oil, with output this year expected to be between 23 million and 25 million tonnes, with around 18 million tonnes exported.
In 2012, palm oil estates will sprawl across 8.2 million hectares of Indonesian land, and is expected to rise about 200,000 hectares each year for the next decade.
Green groups have been critical of expansion in the palm sector.
Plantation expansion is projected to pump more than 558 million metric tons of carbon dioxide into the atmosphere in 2020, an amount greater than all of Canada's current fossil fuel emissions, a study by Yale and Stanford University researchers said last month.
Plantation expansion in Kalimantan alone is projected to contribute 18-22 percent of Indonesia's 2020 CO2-equivalent emissions, the study added.
For their part, Indonesian government officials and palm industry figures have lobbied the U.S. government on the issue.
Indonesia's President Susilo Bambang Yudhoyono signed off on a two-year forest moratorium in May last year, although critics say breaches still occur.
Although the U.S. is not a large palm oil market at present, with India, China and Europe the top buyers, this could change in the future, say Indonesia-based traders.
Both Malaysia and Indonesian government officials have agreed to work together to improve the palm industry's record on environmental issues.

No comments: