KUALA LUMPUR, Jan 14 (Bernama) -- Malaysia's palm oil production isexpected to grow by two to three percent in 2003 when compared with lastyear, Malaysian Palm Oil Association's (MPOA) chief executive, M.RChandran, said Tuesday.The increased output can be attributed to the fact that a lot ofplantation areas in Sabah with young palms would start producing palm oilin a bigger way this year, he explained.In fact, he said Malaysia's palm oil production for 2003 ought to havebeen lower as a result of the on-going replanting programme embarked fromearly last year following low prices for the commodity.He told Bernama after presenting a paper entitled "The Outlook forPlantation Commodities" at the Malaysia Strategic Outlook 2003 Conferencehere Tuesday that Malaysia produced about 11.9 million tonnes of palm oilin 2002, a marginal increase from 11.8 million tonnes registered in 2001.In 2004, Chandran said production was going to be even higher, given thecurrent high price, which would encourage plantations to use morefertilisers."Normally when prices are low, people tend to cut back on fertiliserswhich will effect the yield for one year. So next year, it should be goodbecause a lot of fertilisers have gone in (the palms)."On the price outlook for the current year, Chandran said the average pricefor crude palm oil (CPO) was around an average of RM1,400 per tonne.Currently, CPO prices are hovering around RM1,650-RM1,670 per tonne.On why the average figure was somewhat lower, he said higher production ofsoya beans in Argentina and Brazil expected in March or April this yearcould have an adverse impact on CPO."Higher prices for soya oil towards the end of last year had boostedplanting (of soya beans) and increased availability of soya bean (later)could have an effect on palm oil prices," he said.Unless there was a change in climatic conditions, a good harvest for soyabeans had been anticipated, he said.Moving forward, Chandran said the local palm oil industry should embark onproducing more branded cooking oils or invest in countries like India,China and Europe and go into refining and downstream activites."Or we should go in together with people who are already producing theseproducts with a brand name and get in with them and sell it as a brandname," he said.In the process, consumers would tend to associate the product or palm oilwith the brand and would not be so bothered whether the cooking oil wasproduced from palm oil or soya oil."If I were to mention Cadbury Chocolates, then you might only beinterested in Cadbury Chocolates for you are not so bothered about wherethe cocoa came from. So this is the kind of strategy we need to adopt," hesaid.Chandran said there was a need to restructure the industry verticallywhereby producers would also be associated with milling, refining,producing oleochemicals and other products in the downstream sector.At present, he said only 25 percent of the CPO was refined in refineriesowned by plantation companies while the balance was processed bynon-plantation companies and most of them were foreign-owned.He lauded IOI Corporation Bhd's move to acquire the Netherland-basedLoders from Unilever Group which has downstream activities in fivedifferent countries."This is the way to move forward," said Chandran.He revealed that the Malaysian Palm Oil Board (MPOB) was looking atchanging the structure of palm oil to be like olive oil through the use ofbio-technology.MPOB, he said, was also working on reducing the planting of oil palms inrainforest areas as well as producing "dwarf" oil palms which would beeasier to harvest.But he said these bio-technological efforts could only materialise in12-15 years.Such efforts were crucial over the long term because Indonesia has thecapacity to take over Malaysia as the world's largest palm oil producer,said Chandran."This is because Malaysia is constrained by land. We can plant a maximumof 4.5 million hectares of oil palm but Indonesia has the capacity toplant more than 10 million hectares of oil palms," he said.However, he said Indonesia could only achieve this target if there wastotal co-operation within its industry as it lacked funding and would haveto rely on foreign funds.In terms of quality, he said Indonesian palm oil was as good asMalaysia's, if not better, because Indonesian has an abundance of labourand this played a major role in improving quality.-- BERNAMA

KUALA LUMPUR -(Dow Jones)- A group of landowners from east Malaysia'sSabah state are suing Unilever PLC (U.ULV) for a share of the proceedsfrom the sale of its wholly-owned Pamol Group to Malaysian oleochemicalscompany Palmco Holdings Bhd. (P.PAL).The 180.3-million-ringgit ($1=MYR3.80) claim is based on a joint ventureagreement between the landowners and Pamol which the landowners say wouldhave resulted in them owning 30% of Pamol had the venture been finalized.But the suit, filed Dec. 4 in the Johor Bahru Civil High Court after thelandowners said attempts to reach a settlement with Unilever and Pamolfailed, is unlikely to derail Pamol's sale to Palmco."What my clients want is compensation" and not to stop the sale, OswaldMojingol, a lawyer and spokesman for the 2,382 landowners, told Dow JonesNewswires.Pamol declined comment on the case, referring queries to its Unileverparent.A Unilever spokesman said: "This is an extremely complex issue. We areunable to make any comment at this juncture. The whole matter is governedby Malaysian law and we'll be seeking local legal advice on theappropriate next steps."Palmco officials couldn't be reached for comment.Unilever on Dec. 2 signed an agreement to sell its wholly-owned PamolGroup - which comprises 23,045 hectares of oil palm plantations and twopalm-oil mills - to Palmco for MYR567 million.The landowners who filed the claim are from tribes indigenous to Sabah,and are represented as plaintiffs in the suit by six businessmen.According to claim documents reviewed by Dow Jones Newswires, thelandowners were first invited to participate in a joint venture with Pamolaround 1995."Had it (the joint venture) materialized, what would have happened is thatmy clients would have had the 30% (of Pamol)," Mojingol said.Unilever and Pamol declared on June 30, 1999, that the joint-ventureagreement "had lapsed" because certain conditions were not met by April 9,1999, according to the claim documents.One of the terms of the agreement required the landowners to secure atleast 20,000 acres of good-quality land for the joint venture within sixmonths from Jan. 17, 1997. The deadline was later extended to April 9,1999.The landowners didn't meet that second deadline.But in their claim, they allege subsequent events and correspondence withUnilever and Pamol officials indicated the deadline had been extendedfurther.In their claim, the landowners are seeking an injunction to restrainUnilever from disposing of the proceeds of the Pamol sale up to the sum ofMYR180.3 million.That sum comprises MYR43.5 million in special damages for costs incurredin the land acquisition exercise and in professional fees and generaldamages of MYR136.9 million.

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01/03/2003 (NSTP) - CHINA yesterday announced the 2003 import quota for atotal of 26.3 million tonnes of grains and other agricultural productsincluding wheat, rice and palm oil.The Government said China will import a total of 2.5 million tonnes ofpalm oil in 2003.China, along with India, Pakistan and the European Union, is one of thebiggest buyers of Malaysian palm oil.Malaysia is the world's largest palm oil producer, accounting for a totalof 11.8 million tonnes of palm oil in 2001.For the first 10 months of last year, China bought a total of 1.4 milliontonnes of Malaysian palm oil and it is expected to reach 1.8 milliontonnes for the full year.Yesterday, the January crude palm oil futures price on the Malaysian PalmOil Board closed at RM1,670 a tonne.

1/6/2003 (Country Report Argentina) - Contrasting performances areexpected between cereals and oilseeds in the 2002/03 (June-May) harvest.According to official estimates, the area sown with cereals will contractby 12.5%. Over half of the fall will be explained by the area sown withwheat, a by-product of the critical conditions prevailing at the turn ofthe year, including financial constraints, input shortages anduncertainty. Oilseed production, by contrast, has benefited from thenormalisation of the input market and producers' self-financing fromstocks accumulated in the previous campaign. According to officialestimates, the area sown with sunflower is estimated to increase by 20%,while that sown with soybeans will rise by 6%. The US Department ofAgriculture estimates that Argentina will reach a new record output of32.5m tonnes.

SIBU, Dec 29 (Bernama) -- Sarawak's Natural Resource and EnvironmentalBoard (NREB) will undertake a pilot study on environmental pollutioncaused by used cooking oil.State Environment and Public Health Minister Datuk William Mawan said thata grant of RM500,000 had been allocated for the purpose.

JELI, Dec 24 (Bernama) -- The Felda management will be revamped next yearto enhance the federal agency's role in increasing the incomes of the103,000 settlers in the country.Felda chairman Tan Sri Dr Yusuf Nor said Tuesday that the revamp wouldinvolve 275 land schemes to ensure a higher standard of living for thesettlers, especially when the market price of palm oil, which most of themcultivate, falls.

KUALA LUMPUR, Dec 23: The RM100 million fund pledged by the FederalGovernment to help rubber and oil palm smallholders nationwide to improvetheir income was fully disbursed in 2001 and 2002.Agriculture Minister Datuk Effendi Norwawi handed out RM2.49 million inaid to 350 smallholders in Kuala Langat, Selangor, today, signifying thefull disbursement of the fund."This shows that the Government has fulfilled its promise to thesmallholders," he said.A total of 15,000 smallholders nationwide benefited from the fund,allocated through the ministry, which was announced by Deputy PrimeMinister Datuk Seri Abdullah Ahmad Badawi in March last year.The smallholders today were part of the 709 rubber and oil palmsmallholders in the State who received RM5 million aid.Effendi urged the smallholders to use their aid wisely, utilising moderntechniques to sustain their crops and their income.The fund was pledged by the Federal Government to aid smallholders aftermarket prices of commodities such as palm oil, rubber and coconut fell totheir lowest level.Several assistance schemes were also introduced by the Government asshort- and long-term measures to increase the smallholders' incomes.The Agriculture Ministry will be seeking an allocation of RM70 millionfrom the Federal Government for the same purpose next year for another10,000 smallholders nationwide.

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NEW DELHI, Dec 18 (Bernama) -- Imports of edible oil by India is expectedto surge to an all-time-high of five million tonnes, going by imports inNovember, the first month of the current oil year and lower Rabi (winterseason) produce of oilseeds."Imports may cross five million tonnes, surpassing the earlier high of4.83 million tonnes in 2000-01, if 21 percent growth in November 2002, thebeginning of the new season is any indication," a leading importer hasbeen quoted in a Mumbai-datelined report in the financial daily theEconomic Times as saying.