Newsbrief 36

For week ending Sept. 06, 2007

3RD ANNUAL UCAP BADMINTON TOURNAMENT

As of this writing seven teams have signed up for the tournament. These are: Cargill Philippines, Intertek (Caleb Brett), Pilipinas Kao, San Miguel Corp. Agribusiness, United Coconut Chemicals (Cocochem), United Coconut Planters Bank (UCPB), and Mixed Nuts (Cosay & Co., Igual Commodities, Pacific Royal, UCAP). Venue of the tournament which will be held on four consecutive Fridays starting September 28 through to October 19, 2007 will be the Smashville, located at #100 Ortigas Avenue, Autocamp Compound (in front of Meralco Gate 2), Pasig City.

The tournament is sponsored by Cargill Philippines, Intertek (Caleb Brett), Pilipinas Kao, San Miguel Corp. Agribusiness, Cocochem, and UCPB all of which are Gold Sponsors. UCPB was last year’s tournament champion.

9TH ANNUAL UCAP GOLF TOURNAMENT

Invitations have been sent out for the tournament which will be held on November 09, 2007 (Friday). The event will be held at the Canlubang Golf and Country Club in Canlubang, Laguna, an hour’s drive from Manila using the South Luzon Expressway and the Silangan exit. This is one of the country’s classic and enduring golf courses designed by the world famous Robert Trent Jones, Jr. This is the second time, after five years, that UCAP is holding the tournament in this 36-hole complex.

As has been the practice in the last eight years, the tournament will open with a ceremonial tee-off at 6:00 AM. Tee-off time starts right after the ceremonial tee-off. As before, door prizes will be raffled off and trophies awarded to the winners in their respective classes as well as winners of special awards.

P300 MILLION PALM OIL PLANT TO BE FUNDED BY LAND BANK

Land Bank of the Philippines (LBP) President Gilda E. Pico disclosed that Agumill Phils. Inc. (API) just held a groundbreaking for the construction of a P300-million palm oil plant in Maguindanao. The plant will begin producing palm oil by the last quarter of 2008. It will capture its methane waste to power the plant itself thus eliminate greenhouse gas emission. It will be the first of such palm oil plant in the country that will be registered with CDM (Clean Development Mechanism). The bank extended a P213 million loan for the project while API puts in the P87million equity.

A palm oil operation generally has two types of waste - methane and biomass. During oil crushing, biological waste is produced and goes through a lagoon which eventually emits polluting methane once the waste decomposes. Biomass comes from the fruit bunches which is currently being burned to produce the electricity. But the methane has yet to be captured, so the CDM loan is needed to finance this operation. API will also replicate the methane capture in its other palm oil plants in Agusan and Bohol.

The plant will have an initial capacity of 30 MT and is expandable to 90 MT of fresh fruit bunches per hour. Oil recovery rate is at 14 to 21 percent for 1 MT of FFB, depending on the age of the tree. This can displace as much as 45,360 MT of palm oil import yearly. On the other hand, the methane capture will generate as much as five megawatts of electricity. Any excess from the plant requirement may be sold to the national grid.

SRI LANKAN DESICCATED COCONUT EXPORT UP IN MAY

Figures from Coconut Development Authority in Sri Lanka show the country’s desiccated coconut export in May jumped by 21.7% to 3,717 MT from 3,055 MT in May last year. Average traded price during the month at USD1,126.39/MT FOB is slightly higher by 2.0% from US1,104.52 a month ago but hiked by an appreciable 23.6% from USD911.24 in May year-ago. Total export for the five month period ending May amounted to 18,274 MT, a whopping increase by 60% from 12,181 MT at the same time last year.

Export in May went to 40 country destinations across the world led by Egypt which took in 540 MT or 14.5% of total sales, trailed by U.A.E at 500 MT or 13.5%. Other buyers of substantial quantities were France at 294 MT, Saudi Arabia 270 MT, Germany 252 MT, Portugal 245 MT, Netherlands 211 MT, Turkey 201 MT, Spain 186 MT and Pakistan at 110 MT, which jointly accounted for 47.6%. The remaining 908 MT or 24.5% were shared by 30 countries, whose uptake ranged from a low of 1 MT to a high of 94 MT.

INDONESIA AJDUSTS LOCAL OIL TAXES

Indonesia raised the export tax for both crude palm oil (CPO) and refined, bleached, deodorized (RBD) palm olein to 7.5% from 6.5%. The new tax rates took effect this week. Mari Pangestu, trade minister also announced an increase in CPO base export price to $816/MT from $728/MT.

Earlier, it was reported that Indonesia would scrap the 10% value added tax on CPO sold to cooking oil processors. Anton Apriyantono, agriculture minister said that by scrapping the VAT on CPO, it will encourage more producers to process it for the local market. He is confident the new measures will ease prices of cooking oil in the domestic market, which have become almost unaffordable to many Indonesian families due to the surging international market.

MALAYSIA DELAYS IMPLEMENTATION OF BIODIESEL LAW

Implementation of the Biofuel Industry Act 2006 is being postponed for a while due to high crude palm oil (CPO) prices. CPO now trades at between RM2,300 and RM2,600 per ton, way above the threshold RM2,200/MT for biofuel manufacturing to be viable. Plantation Industries and Commodities Minister Datuk Peter Chin Fah said implementation of the law at this time may force government to subsidize to bring biodiesel price such as its very own EnvoDiesel to a more attractive level.

The Biofuel Industry Act, passed by lawmakers in June this year, among others allows the Plantation Industries and Commodities Ministry via the Malaysian Palm Oil Board (MPOB) to regulate, monitor, and enforce rules on the biodiesel industry in the country. Under the Act, the MPOB will be able to issue and revoke biodiesel production and export licenses, instead of the Malaysian Industrial Development Authority, an agency under the International Trade and Industry Ministry. The Act will also enable all diesel-powered vehicles in the country to use palm oil based biodiesel, thus giving the public a choice over ordinary fossil fuel-based diesel. It will also set a ceiling price for biodiesel as well as direct petrol stations to sell the green fuel to consumers.

FRANCE TO IMPORT BIOFUELS TO MEET GOAL

An industry analyst revealed France may become an importer of biodiesel to meet its increased blending target for the blending of biofuels in fossil fuels in 2008. Biodiesel blending in France is poised to increase to 5.75% of fossil diesel from January 2008 from 3.5% currently. At present, locally produced biofuel uses rapeseed oil as feedstock.

Oil World estimates the increase would be equivalent to about 900,000 MT in biodiesel demand in France for calendar year 2008, adding that the growth would likely impact on the rapeseed oil market in the EU as the increase cannot be met by French producers alone. As a result, the country needs to import biodiesel from neighboring countries.

EU BIODIESEL PRODUCERS MAY SHIFT TO OTHER FEEDSTOCK THAN RAPESEED OIL

EU is expected to increase its rapeseed oil consumption for biodiesel to 5 million MT in the coming October 2007/September 2008 season from present level of 4.5 million MT. As against this, Oil World estimates EU rapeseed oil consumption for the season at 7.82 million MT, indicating the bulk of rapeseed oil consumption will go to biodiesel.

On the other hand, EU food suppliers may opt to replace sunflower oil, which has seen sharp price increase due to failing crop, with rapeseed oil, a situation that should also raise rapeseed oil prices, respectively biodiesel feedstock, creating problems for the biodiesel industry. “Biodiesel producers will increasingly shift to feedstock other than rapeseed oil, but the flexibility is limited, especially in winter months”, Oil World said.

FELDA ACQUIRES U.S. VEGETABLE OILS PROCESSOR

Malaysia’s Federal Land Development Authority ( Felda) recently signed an agreement to acquire 100 percent equity in Twin Rivers Technologies LLC, the third largest manufacturer of fatty acids and biggest biodiesel producer in North America. Deputy Prime Minister Najib Razak said the acquisition will enable Felda to be a global leader in the vegetable oils industry.

Twin Rivers was established in 1994 and has plants in Massachusetts and in Cincinnati. It uses vegetable oils including palm oil for its products. Mohamad Bakke Salleh, Felda group managing director expressed confidence in the venture as demand for palm oil in the United States has increased in the past two years.