MPOB Palmnews
 
Date
 10/11/2001
News Provider
 Mahamad Rodzi Abdul Ghani
News Source
 NULL
Headline
 CPO storage woes end as demand picks up

09 November 2001 (Business Times) - MALAYSIAN crude palm oil (CPO) supplylogistics are back in gear with exports shifting into normal to out-pacethe build-up in stocks.Palm oil bulkers no longer face storage constraints as demand has pickedup ahead of the upcoming festivals like Deepavali on November 14, HariRaya in mid-December and Chinese New Year in mid-February, an industrysource said.“The storage tanks were overflowing at one point but the pressure haseased substantially... shipments are back to normal,” the source toldBusiness Times in Kuala Lumpur yesterday.Business Times reported last month that CPO bulkers were facing storageconstraints caused by disruptions in shipments to Pakistan and other partsof West Asia due to the on-going military strikes in Afghanistan.CPO is stored at bulking facilities at the ports and elsewhere beforebeing loaded onto ships for export. At least one of the major depots hadto turn away new supplies in the wake of sluggish offtake, worsened byshipping lines’ nervousness in servicing the Gulf region.The US and its coalition partners had on October 7 launched a militaryoffensive against Afghanistan in an effort to force the ruling Taliban tohand over Saudi-born militant Osama bin Laden, which Washington names asthe prime suspect in the September 11 attacks on the US.Primary Industries Minister Datuk Seri Dr Lim Keng Yaik had even assuredshipping lines that the Government was prepared to fully insure theirvessels against attack.The world’s biggest CPO bulker, Felda Johor Bulkers Sdn Bhd, rejected upto 50,000 tonnes of the commodity as its tanks were full, sources said.Located in Pasir Gudang, the facility can hold 242,000 tonnes of CPO atany one time. It handled 3.6 million tonnes or 33.27 per cent of Malaysia’s palm oil exports of 10.82 million tonnes last year.It is not immediately known to what degree shipments were actuallydisrupted last month. Pakistan buys about 100,000 tonnes of the commodityfrom Malaysia each month, involving the use of about 10 ships.There are 31 licensed bulkers in the country with facilities located inJohor, Pahang, Penang, Selangor, Sabah and Sarawak.Combined, they can hold up to 850,000 tonnes of CPO at a time. Johor leadswith a capacity of 267,000 tonnes, followed by Selangor with 247,855tonnes, Pahang 120,880 tonnes, Penang 115,500 tonnes, Sabah 94,840 tonnesand Sarawak 3,600 tonnes.Apart from Felda Johor Bulkers, the other major bulkers are Fima PalmbulkServices Sdn Bhd, Butterworth Bulking Installation Sdn Bhd, Wilmar BulkingInstallation Sdn Bhd and Guthrie Export Sdn Bhd.At the Malaysia Derivatives Exchange yesterday, the benchmark third monthJanuary 2002 futures closed RM19 higher at RM1,100 a tonne.A trader said the market is cautious ahead of the release of Octoberproduction figures, which are likely to show a 1 per cent rise fromSeptember’s 1.1 million tonnes.The Malaysian Palm Oil Board is expected to release the production, exportand end-stock data on Monday.“The market is on a technical rebound but there may be a retracement assome players feel that it is already somewhat overpriced.“But overall, the market is bullish amid strong seasonal demand,” said atrader.At the close, November futures were unchanged at RM1,080 a tonne, DecemberRM19 higher at RM1,099, and February and March RM31 and RM34 up at RM1,146and RM1,155, respectively.Total turnover was down 1,007 lots at 2,843 lots and open interests waslikewise 189 contracts lower at 13,150 contracts.