For week ending Dec. 06, 2007

       Danilo M. Coronacion, CIIF Oil Mills Groups President said the study will look into the possibility of using only a fraction of coconut oil for biodiesel and get the valuable chemical properties for higher value products like bio-lubricants, thus optimize the feedstock at lower cost and make it competitive. The Philippines’ present use of CNO for biodiesel was based on technologies for long chain fatty acid (LCFA) particularly influenced by US or German technologies that were designed for LCFA soybean oil, rapeseed oil or palm oil. Technology on MCFA may lower costs and maximize CNO’s competitive advantage. While exploring viable products from the MCFA technology, the R&D will also work on the blending of CNO with jatropha oil which is an LCFA.

       In a related development, Dean Lao, Jr., Chemrez chief operating officer told reporters at the sidelines of a visit by representations from the Asian Network of Major Cities who were in Manila for a conference, that the planned expansion may also be needed to support the company’s exports of glycerin to other countries. They have already tapped Iran, Pakistan, India and Korea as market for glycerin. Glycerine is a byproduct of biodiesel production that commands a premium when refined into pharmaceutical grade. The company’s oleochemical plant includes an operational glycerin refining section.

       Jessin Soriano, Splash president and chief operating officer said that through Mandalay Trading the needs of Filipinos in the US can now be served, adding that through the venture Splash will be able to create a new generation of loyal US-based consumers through the much broader Oriental, Hispanic and other targets segments. Health and wellness is a $44 billion market in the US, a third of the estimated $128-billion global market.

       Cumulative January-September 2007 import amounted to 518,854 MT, a reduction by 9.6% from same period last year at 574,206 MT. Coconut oil was 300,636 MT, a substantial drop by 21.3% from 382,043 MT at the same time last year; while palm kernel oil at 218,218 MT grew moderately by 13.6% from 192,163 MT.

       Projections from the Coconut Research Institute indicate only 450 million nuts will be harvested between now and February 2008. Total output for 2007 is anticipated to reach about 2.934 billion nuts. Domestic consumption accounts for 1.910 billion nuts, which is not sufficient to feed the island’s desiccated coconut and coconut oil mills, that collectively require around 1.186 billion nuts.

       The Thai Ministry of Commerce indicated that vegetable oil prices may be raised before yearend and may go up further next year due to higher production costs. Vegetable oils now sell at 41 baht per liter and to rise up anew to 43.50 baht per liter during the New Year holidays. The Department of Internal Trade (DIT) is to hold discussion with vegetable oil producers regarding their consideration to another increase of oil prices amid rising production costs.

       Gulam Dewji, chairman of METL Group, said the multipurpose plant also has a capacity to handle an additional 300 MT of soft oils per day and three manufacturing lines for soap with aggregate capacity of 7,000 MT per month. The new plant has been designed to have harbor-to-plant pipelines to ensure economical delivery of imported materials. The company also has installed a tank facility that will store up to 26,000 cubic meters of vegetable oil and 2,400 cubic meters of liquid caustic soda.

       Energy Minister Purnomo Yusgiantoro disclosed government plans recently to return to a 5% biodiesel blend in diesel within the next three years following expectations of rising palm oil and jatropha production. State-owned oil firm Pertamina cut the biodiesel fuel blend to 2.5% from 5% as rising palm oil prices and lack of subsidies reduced margins. Palm oil prices have gained nearly 50% since early this year on strong demand from both the food and energy sectors, prompting countries including Malaysia to defer the use of biodiesel.

       China is set to become the biggest consumer of renewable energy, which may account for more than 15% of the nation’s energy use by 2020. Biofuels, such as biodiesel and ethanol, may replace as much as 24% of global petroleum and diesel use by 2030, according to BP, Europe’s second-largest oil company.