Newsbrief 53

For week ending Feb. 05, 2009

COCOHOUSE LUNAR NEW YEAR CELEBRATION

UCAP Cocohouse welcomed the Year of the Ox last Tuesday, February 03, at the Summer Palace restaurant, EDSA Plaza Hotel, Mandaluyong City. This is the second year that Cocohouse celebrated the Chinese New Year. Members enjoyed the special New Year Prosperity Yee Sang or Yu Seung luncheon. The Yee Sang menu is designed and arranged to attract prosperity and good health. Yee Sang is served only during the Chinese New Year, especially in Singapore and Malaysia. Major sponsor of the event was UCAP Director Enrique J. Uy of the Association of Coconut Brokers, Inc.

U.S. IMPORT OF LAURIC OILS DOWN IN NOVEMBER 2008

Data from USDA show the U.S. imported 83,904 MT of lauric oils in November 2008. This is 11.9% lower than November year-earlier at 95,214 MT. The decline was on account of sharp drop in coconut oil purchases. Of total import, coconut oil accounted for 62.1% or 52,143 MT while palm kernel oil contributed the remaining 37.9% or 31,761 MT. Import of palm kernel oil shot up by 49.4% from 21,261 MT last year while uptake of coconut oil was cut by 29.5% from 73,953 mainly on reduced shipment from the Philippines.

Bulk of delivery during the month, however, came from the Philippines at 40,034 MT of coconut oil only, down by 38.6% from prior year at 64,944 MT and representing 47.7% of the pack. Malaysia shared 35.7% or 29,957 MT of which 4,177 MT (1,509 MT last year) was coconut oil and 25,780 MT (19,273 MT) was palm kernel oil; while Indonesia provided 16.6% or 13,913 MT of which 7,932 MT (7,500 MT) was coconut oil and 5,981 MT (1,988 MT) was palm kernel oil.

Cumulative figure for January-November reached 703,801 MT, increasing moderately by 6.1% from 663,436 MT. Coconut oil was 473,326 MT (406,909 MT) and palm kernel oil was 230,475 MT (256,527 MT). The Philippines? shipment of coconut oil at 340,970 MT (342,021 MT) was responsible for 72.0% of total imported lauric oil.

VEGETABLE OIL STOCKS IN JAPAN SWELL BY 41%

Preliminary data from local edible oil producers and the Ministry of Agriculture show that edible oil stocks in the country leaped 41% to 113,625 MT in December from a similar month last year owing to lower demand and rise in imports. Stocks have been piling up for six straight months ending December, data show. The figure included rapeseed oil stocks which more than doubled to 39,447 MT and soya oil which expanded by 19% to 34,288 MT.

Volume of oilseed crushed fell for the fifth straight month by 11.8% in December from a year earlier to 463,638 MT, but failed to offset the rising stocks. ?Edible oil demand for business use has been on the decline in the second half of 2008. That?s one factor boosting stocks as the time passed?, a ministry official said. Imports of soya oil and rapeseed oil rose recently, worsening the demand/supply balance. For the 2008 calendar year, ministry figures show oilseed crushing volumes fell 2.9% to 5.71 million tons, with soybeans accounting for 49% of the total and rapeseed 39%. Japan traditionally imports soybeans from the US, while the majority of rapeseed supplies come from Canada.

INDONESIAN GOVERNMENT TO SUBSIDIZE BIOFUELS

Indonesia?s Energy Mineral Resources Minister Purnomo Yusgiantro submitted recently a plan with the House of Representative commission VII, which oversees energy and mineral resources, to subsidize biofuels in a bid to promote the use and distribution of the renewable energy. Under the plan, government will give the subsidy to state-owned oil and gas company PT Pertamina as the sole distributor of the fuel. Pertamina will get a subsidy of Rp 1,000 (8.9 US cents) for each liter of biofuel distributed. The government targets that by 2025, biofuel consumption must contribute at least 5 percent of the national energy portfolio, from less than 1 percent currently. Aside from providing a subsidy for Pertamina, the government has required fuel retailers to ensure that biodiesel accounts for at least 1 percent of their national fuel sales.

Purmono explained that declining crude oil prices in global markets has made the development of biofuel less commercially attractive given the high costs involved in producing biofuel, hence a subsidy was needed as an incentive for Pertamina to keep its biofuel distribution business going. The subsidy is aimed at helping Pertamina cover high production costs for biofuel so that it could still sell its biofuel products at commercially reasonable prices. Pertamina could for instance sell biosolar, which is a combination of 2.5 percent biodiesel and 97.5 percent conventional diesel at Rp 4,500 a liter, at the same price as 100 percent diesel. Similar pricing would apply to bioethanol with Pertamex.

EU-BRAZIL JOINT BIOFUEL PROJECTS

Research into second generation biofuels was given a boost recently as the EU officially opened its call for joint projects uniting EU and Brazilian energy research teams, The Public Ledger reports. The coordinated call for research recorded in the official journal of EU law, offers a $5.5 million budget for joint EU-Brazilian research into the viability of biofuels which do not compete with food sources. Second generation biofuels are likely to play an increasing part in EU energy production over the coming decade, after ministers and MEPs recently reached agreement on a Renewables Directive, setting a 10% target for renewables in transport fuel and offering extra incentives for the use of second-generation biofuels.

The co-ordinated research drive is mandated within the framework of the EU-Brazil S&T Co-operation Agreement, and agreed projects will come under the ?2009 Co-operation? work program for Research, Technological Development and Demonstration Activities. The work program, announced in November by the EC and the Brazilian Ministry of Science and Technology (MCT), calls for research into advanced technologies for producing second generation biofuels from Brazilian and European feedstock. Focusing on sustainability, the joint EU-Brazilian program mandates research into the upgrading and economic use of residues, by-product and process waste streams.

USDA AGENCY PILOTS GM QUALITY MANAGEMENT SCHEME

The USDA?s Animal and Plant Health Inspection Service (APHIS) has introduced a trial of the biotechnology quality management system. The system is part of continued efforts to enhance compliance with the regulatory requirements for field trials and movements of certain genetically (GM) organisms. The goal with the biotechnology quality management system is to give developers the tools they need to better comply with the regulations. The pilot project provides an opportunity to further develop and improve the system before its full implementation.

APHIS has accepted five volunteer participants into the pilot project: Bayer Cropscience, BASF Plant Science, JR Simplot Plant Science, Pioneer Hi-Bred International and the University of Nebraska at Lincoln. The participants will develop, implement and maintain a quality management system within their organization to proactively manage the movement and field release of regulated GM organisms. As part of the process they will: 1) work to identify vulnerabilities in their processes for working with GM organisms, 2) develop or revise standard operating procedures that address vulnerabilities, 3) properly train personnel on the standard operating procedures, and 4) undergo a third-party audit to determine effectiveness of their quality management system.

HIGH-TECH PROCESS TO EXTRACT CHEMICALS FROM GLYCEROL DEVELOPED

The Ministry of Knowledge Economy in Korea said researchers from local universities, the state-run Korea Research Institute of Chemical Technology, and GS Caltex Corp. have successfully produced glycerol carbonate (GC) and 3-hydroxypropionic acid (3-HP) from glycerol, a by-product of biodiesel production. Glycerol Carbonate (GC) is a new kind of solvent used for industrial and medical purposes that could replace conventional propylene carbonate, while 3-HP is a water-soluble compound utilized in the industrial production of various chemicals such as acrylates. The project is part of a greater effort by government to develop new biochemical materials and fuels to cope with Korea?s large industrial and energy needs.

Using a special catalyst to make the chemicals, scientists have found a way to effectively reduce biodiesel production costs by 15 percent. A government official said production cost can be lowered as manufacturers will be able to sell the by-product chemicals on the market. The official also said that the extraction process is the first of its kind and gives the country an edge over foreign rivals currently committed to making biodiesel fuel. Once the extraction process for the two chemicals is fully optimized for large-scale production which is expected to be completed by 2012, biodiesel manufacturers will be able to churn out 950,000 tons of GC per year. That could draw in an estimated 700 billion won (US$542 million), while production of 3-HP may top 3.6 million tons worth 4.7 trillion won.

MANUEL V. DEL ROSARIO, 61

Mr. Manuel V. del Rosario, UCAP vice-chairman and director passed away last January 29, 2009. He was president of the Philippine Coconut Producers Federation and represented the Federation in the UCAP board. He was also vice-chairman and executive director of Philippine Coconut Research & Development Foundation. He is survived by his loving wife, Angela, daughter Isabel Cristina, and son Juan Paolo.