Oil Palm Growers to Purchase Less Fertiliser

Monday, November 24, 2008 8:54 PM

(Source: New Straits Times)By Ooi Tee Ching
MALAYSIA'S 200,000-odd oil palm planters, initially forecast to spend
more than RM5 billion on 3.5 million tonnes of imported fertiliser
this year, have collectively agreed to reduce purchases in the next
six months.

Oil palm plantations consume more than 75 per cent of the nation's
fertiliser imports.

"We're considering not applying fertiliser for the next six months to
cut cost if fertiliser prices do not come down. Fertiliser is still
two times more costly than at the beginning of the year," said
Malaysian Palm Oil Association (MPOA) chairman Datuk Azhar Abdul
Hamid, who is also Sime Darby Bhd executive vice-president of the
plantation and agribusiness division.

He was speaking to reporters after a meeting with Malaysian Estate
Owners Association (MEOA) president Boon Weng Siew and the Malaysian
Palm Oil Board (MPOB) chairman Datuk Sabri Ahmad.

MEOA's Boon said fertiliser importers' recent pledge to cut prices by
15 per cent is not justified.

"Fertiliser suppliers should drop prices by 50 per cent, considering
that international crude oil have come down by more than 65 per cent
from its high of US$147.47 (about RM535) per barrel in July," he said.

Also present at the press conference were Felda Holdings Bhd group
managing director Datuk Mohd Bakke Salleh, IOI Corp Bhd executive
chairman Tan Sri Lee Shin Cheng and Kuala Lumpur Kepong Bhd (KLK)
chairman Datuk Seri Lee Oi Hian.

Last year, Malaysia's oil palm planters spent RM2.6 billion on 3.4
million tonnes of imported fertilisers.

MPOB has so far collected RM500 million in cess from oil palm
planters. This money will be used to replant 200,000ha of land and
stabilise biodiesel prices when the government implements the B5
mandate effective February 2009.

Oil palm planters are also proposing to the government that national
power firm Tenaga Nasional Bhd uses palm oil feedstock for its
diesel-fuelled power plants in Sabah.

Although yesterday's sudden gathering of the oil palm associations
that included captains of the six biggest oil palm companies seemed to
reflect the seriousness of low palm oil prices, KLK's Lee said oil
palm planters and exporters are not in dire straits.

"Please do not misread this as a distress situation. At RM1,500 per
tonne, we're still profitable," he said, adding that oil palm planters
can manage production cost by lowering inputs.

He said KLK's oil palm planted area of some 170,000ha in Malaysia and
Indonesia have begun to reduce fertiliser inputs by 20 per cent.

"By using less fertiliser, we've cut back on our production cost by
about RM100 per tonne," he said.

Yesterday, the third month benchmark crude palm oil on Bursa Malaysia
Derivatives Exchange traded RM28 higher to close at RM1,488 per tonne.

Tree fungus makes ready-to-use biodiesel

by David Masters 

November 4, 2008

Researchers in the Patagonian rainforest have discovered a biofuel producing tree fungus that could radically transform worldwide energy production practices.

Gliocladium roseum is a fungus that grows inside the ulmo tree in northern Patagonia.

The fungus naturally produces a mixture of chemicals almost exactly the same as vehicle quality diesel derived from fossil fuels.

G. roseum produces the biodiesel chemical - termed 'myco diesel' - as a vapour, making it much easier to extract, purify and store than liquid counterparts.

Crops grown for biofuel usually have to be converted into sugar and fermented before they can be pumped into vehicle engines.

Scientists believe the fungus has the potential to be a major provider of green energy, as it could be used to convert cellulose plant waste directly into myco diesel.

According to lead researcher Gary Strobel from Montana state university, no other known organism on the planet does this.

According to Strobel, the mixture of chemicals in the myco diesel could run a car engine without any need for modification.

The fungus produces the myco diesel vapour as a self protective measure to kill off surrounding fungi.

Carotech secures RM200m biodiesel contract

KUALA LUMPUR: Carotech Bhd, one of the largest local producers of palm methyl ester, has inked a RM200mil contract with Trafigura Beheer BV, Amsterdam for the export of its refined and distilled palm biodiesel to the US and Europe.

Managing director David Ho expected the agreement to contribute significantly to the company's earnings and further strenghen its position as the leading supplier of palm biodiesel in the world.

"Trafigura has been our customer since 2007 and this agreement is important to us as it would take up more than 50% of our capacity and provide certainty to our operations, bankers and suppliers," he told reporters after the agreement signing ceremony yesterday.

At present, Carotech operates two production facilities in Perak which produce more than 120,000 tonnes of biodiesel per year.

Left to right : Trafigura Beheer BV, Amsterdam representative Nicolas Chiche, Deputy Minister of Plantation, Industries & Commodities YB Senator A.Kohilan Pillay and Carotech Bhd MD David Ho at the signing ceremony on Wednesday.

Under the agreement, Ipoh-based Carotech will supply Trafigura with 60,000-84,000 tonnes of its CaroDiesel biodiesel annually or 5,000-7,000 tonnes monthly, at a price based on a formula at a premium over the crude palm oil price.

The one-year contract would begin in January, said Ho.

Based in Switzerland, Trafigura is the world's third largest independent oil trader and second largest independent trader in the non-ferrous concentrates market.

In the oil sector, the company has access to over 30 million barrels of storage facilities through a combination of owned terminals under its network and long-term lease agreements with third party oil terminals.

Ho said while the biodiesel industry will face tougher challenges in 2009, its outlook was still bright with the European Parliament reaffirming binding targets of 5% for biofuels in transport by 2015 and thereafter increasing it to 10% by 2020.

"Failure to meet these interim targets for renewable energy will result in penalties," Ho said, adding that the US market for biodiesel was also growing at a rate of 25 million gallons per year in 2004 and 2005 to 450 million gallons in 2007.

No German ban on palm biodiesel

Germany has not banned imports of palm biodiesel, said Plantation Industries and Commodities Deputy Minister Senator Kohilan Pillay.

"There is no ban. Palm biodiesel can enter Germany. It is not possible to ban the import of any product as it would go against the very principles of free trade as spelled out by the World Trade Organisation," he said.

The deputy minister was speaking to reporters after witnessing the signing of a biodiesel supply agreement between Carotech Bhd and Swiss-based oil trader Tra-figura Group in Kuala Lumpur yesterday.

He said the German Government's main concern is the production of biofuels that cause the destruction of virgin jungles and the killing of wildlife. It proposes the elimination of soya and palm oils from the list of qualified biofuels for subsidy.

Kohilan said the general concern is the sustainability of biofuel sources. Bankers can be assured that biodiesel producers in Malaysia source their feedstock from oil palm estates that operate in a responsible manner.

"Banks and financial institutions should continue extending credit facilities to biodiesel producers. The industry, although in its infancy, is an increasing contributor to our economy. It is important that manufacturers have access to adequate cashflow," he said.

In view of the mandatory blending of five per cent biodiesel with 95 per cent regular diesel in government vehicles and the public transportation system from next February, biodiesel producers are in a solid position to repay bank loans, he said.

The deputy minister was responding to the growing concern of banks tightening lending to businesses perceived as risky in the light of slowing global economy.

Malaysia is ranked 24th in the World Bank's Ease of Doing Business Survey 2009 but in the sub-category of access to financing, it is ranked number one.

Earlier, Bank Negara Governor Tan Sri Dr Zeti Akhtar Aziz was reported to have said total financing approved up to September this year was RM230 billion, 9.5 per cent more than the same period last year.

The central bank is in regular engagement with banks to make sure businesses, particularly small and medium enterprises, continue to have access to bank financing.

Malaysia sees 'fair' price for palm oil at RM2,000-RM2,600

THE Government will implement measures to reduce supply and increase the usage of palm oil in order to maintain the crude palm oil (CPO) prices at around RM2,000-RM2,600 per tonne. 

The measures include accelerating the replanting of oil palm trees that are more than 25 years old, increasing the usage of biofuel and developing downstream activities, said the Minister of Plantation Industries and Commodities, Datuk Peter Chin Fah Kui. 

He noted that the Government had allocated RM200 million for replanting and vehicles owned by it would start using biofuel in two to three months. 

A "fair" price for palm oil is between RM2,000 (US$562) a ton and RM2,600, he told reporters today in Putrajaya, outside Kuala Lumpur. 

CPO prices are now traded in the RM1,600 plus range per tonne. 

Malaysia, the world's second-largest palm oil producer, expects output of the edible oil next year to rise 2.9 per cent to 18 million tons. 

Chin said he expects the nation's palm oil production this year to be 17.5 million tons. - Agencie

International Energy Agency Warns of Rising Oil Prices

Posted by: Admin in Oil, Policy

The International Energy Agency recently issued a warning proclaiming that the era of cheap oil is over. It further went ahead to predict that crude oil prices would soon rebound to above $100 a barrel and double again by 2030 as fields in the North Sea and elsewhere in the world declined faster than expected.

More than $26 trillion of new investment would be needed over the next 20 years to ensure the world had enough energy, according to the IEA, which was founded during the oil crisis of 1973-74 and acts as energy policy adviser to 28 member countries including Britain.

The organization further said that while market imbalances could temporarily cause prices to fall back, it is becoming increasingly apparent that the era of cheap oil is over.

The developed world's energy watchdog has doubled up its long-term price expectation from last year's $108 a barrel for 2030. It assumes oil prices will rebound from today's $60-$70 a barrel to trade, in real terms adjusted by inflation, at an average of more than $100 from 2008 to 2015.

The summary to the IEA's annual World Energy Outlook says the rise in oil prices is for the most part because companies will battle to pump enough new oil to offset the production declines of the world's older fields. However, the organization refuses to accept that what is known as "peak oil" has yet been reached.

"The world is not running short of oil or gas just yet," it said. "The immediate risk to supply is not one of a lack of global resources, but rather a lack of investment where it is needed."

Total world oil output is not anticipated to peak before 2030, but the more easily approachable sources of crude, or conventional oil, are expected to plateau towards the end of that period. That will make the world more dependent on non-conventional sources, such as oil sands, which are hard to process, while conventional oil production will rise by only 5m barrels a day by 2030, the IEA forecasts.

The IEA has consistently said that energy resources have become concentrated in fewer hands as any increase in production is largely confined to Organization of Petroleum-Exporting Countries, the producers' cartel. Non-OPEC conventional oil output has already reached a plateau and is projected to be in fall by around the middle of the next decade.

Japan wood-gas-to-energy power plant wins award

By Anna Austin

Web exclusive posted Oct. 30, 2008 at 4:22 p.m. CST 

Japan-based Yamagata Green Power, an electricity distribution company which runs the country's most powerful wood gas-to-energy power plant, has been awarded the Asian Power magazine's Gold Award for the Best Renewable Energy Power Plant of the year. 

The two-megawatt power plant, which is fueled by gasified wood chips from local forests, is powered by two GE Energy Jenbacher gas engines, both of which have an electrical efficiency of up to 36 percent. Most of the plant's energy is sold to a power producer and supplier; the rest of the energy supports plant operations. 

This is the second consecutive year that the company's engines have received an Asian Power award. In 2007, GE Energy was recognized for its cow manure-digester biogas project in Punjab, India. 

Although GE Energy has supplied its Jenbacher engines for other types of waste gasification projects in Japan, the Yamagata project represents its first large-scale wood gas engine project in Asia. According to the company, it has also installed the engines in other wood gas plants in Europe and North America. 

The Asian Power awards, which are given annually to highlight the top power plant projects in Asia, were announced during the Power-Gen Asia 2008 conference in Kuala Lumpur, Malaysia. The award is given to projects which generate power from abundant, renewable biomass resources otherwise treated as waste, and demonstrate opportunities for future waste-to-energy initiatives.

By 2010, Japan has a goal to increase renewable energy production to three percent of the country's overall energy supply. As part of its renewable energy strategy, Japan is also seeking ways to expand its use of biomass fuel by up to 330 megawatts by 2010.