For week ending Jan. 08, 2009

       Five months of continuously declining export at markedly faster pace finally brought the cumulative January-November figure at 1,495,128 MT lagging behind from same period year-ago total at 1,512,815 MT by 1.2%. Breakdown is as follows, in MT: coconut oil 771,940 (777,060), copra meal 419,095 (366,263), desiccated coconut 124,793 (121,520), oleochemicals as copra 76,887 (91,508).

       Korea was practically an exclusive market for copra meal during the month with uptake at 17,200 MT comprising 96.7% of total trade. New Zealand took in the remaining 3.3% or 579 MT.

       Export in 2009 is projected at 1.619 million MT in copra terms, a shade lower by 0.8% from prior year estimated at 1.632 million MT, on increased demand for coconut oil in the domestic market especially for biodiesel feedstock and a need to boost stocks which had been sharply depleted. Breakdown is as follows, in MT: coconut oil 835,000 (-0.7% from prior year estimated at 840,547), copra meal 460,000 (+4.5% from 440,066), desiccated coconut 138,000 (+1.8% from 135,609), oleochemicals 80,000 in copra terms (-9.0% from 87,952).

       Cumulative January-October figure stood at 619,896 MT, exceeding by 9.1% a comparable year-earlier period total at 568,220 MT. Coconut oil at 421,183 MT grew significantly by 26.5% from 332,954 MT at the same time last year; while palm kernel oil at 198,713 MT dropped by 15.5% from 235,220 MT. The Philippines supplied nearly half (48.5%) of the 10-month lauric oil total with delivery of 300,936 MT (277,076 MT) coconut oil.

       Meanwhile, in a related development, Malaysian Prime Minister Datuk Seri Abdullah Ahmad Badawi said that Malaysia and Indonesia would find ways to boost palm oil prices as they affect the economies of both countries, noting that the two countries jointly account for 80 percent of the world?s palm oil production. The statement was made after a courtesy call with Indonesian President Susilo Bambang Yudhoyono before the Malaysia-Indonesia General Border Committee 37th meeting in December last year which the prime minister chaired. The two nations have also agreed to strengthen cooperation to face an anticipated increase in illegal trans-border activities arising from the global economic slowdown.

       The government, however, still awaits the demand forecasts from the Indonesian Palm Seed Producers Association before setting a final demand benchmark. When CPO prices hit their peak in March of last year, estimated demand for oil palm seeds in 2008 reached 230 million seeds.

       The China Business Daily reported early this week that Sime Darby, the world?s largest palm oil processing company got approval to build a plant in Rhizao, in east China?s Shandong Province. The project involves a total investment of 500 million US dollars and is designed to have an annual palm oil processing capacity of three million tons that may change China?s status from a big palm oil importer to palm oil processing center and catapult Sime Darby as the biggest palm oil producer in Rhizao. The first phase of the project has registered a capital of USD29.9 million and is scheduled to start building before the end of May 2009 and to start production before the end of June 2010.

       The government program is to guarantee the price of crude palm oil at 22.50 baht per kilogram, while the price of palm fruit would be guaranteed at 3.50 baht per kg. Palm nuts were trading lately at between three and 3.20 baht per kg, with crude palm oil at 20-21 baht per kg. The intervention scheme, however, has yet to start as the southern plantation areas are being hit by heavy rain and flooding.

       Ulrick & Short has launched a clean label tapioca-based starch for fat replacement in cakes and muffins, Foodnavigator.com reports. The company claims that its Synergie L526 could replace up to 25 percent of fat in bakery products, reducing costs while helping the industry to meet fat reduction targets. The new product has been designed to replace vegetable oil or margarine, and comes as a powder which can be mixed directly into dry ingredients without needing to be pre-hydrated. This latest fat replacer adds to the company?s existing range of tapioca starch products, each designed to mimic the way that different fats build viscosity in different products, producing different products, producing different textures and mouth feel.