the oil of the future - my palm oil councilmpoc.org.my/upload/mpoc_full ar_2008.pdf · meetings...

8annual repor t

T h e O i l o f t h e F u t u r e

�

MALAYSIAN PALM OIL COUNCIL Annual Report 2008

contents

MALAYSIAN PALM OIL COUNCIL annual report 2008

02 corporatebackground 54

04

07

08

09

�2 ceo’s report 89 financial

statements

chairman’sstatement 79 calendar of

events

organisation chart & management team 74 public relations

activities

board oftrustees and committees 73

branding ofmalaysianpalm oil

board of trustees 65

�9 marketoverview ��2 list of

abbreviations

domesticpromotions

mediapromotions,publicationsand posters


2

corporate background

The Logo was designed to be hard-edged towards

defined linearity, while conforming to the geometry of

balance and clarity of form. It was structured to reflect

modernity in the expression of an oil palm tree, within

the context of today’s graphic idiom. The simplicity in the

design approach is derived from the utilisation of component

elements from the ubiquitous ‘square’ itself, to interact

intuitively, for easy recognition and recall.

The colours of green and earthy red represent a healthy environment, and black - concerns

for biodiversity, and the preservation of a cleaner world of tomorrow. The initials - MPOC

- anchor the logo to form part of the total corporate signature.

The development of the logo was intended to generate stronger awareness of the Council’s

relentless efforts to put Malaysian Palm Oil on the highest scale of consumer acceptability,

in terms of health-giving attributes, environmental friendliness, and endless commercial

applicability.

The introduction of this new logo has enhanced MPOC’s standing and visibility, for

continued success of the Malaysian Palm Oil industry, at home and in the global market.

3


mission & objectives

missionTo promote the market expansion of Malaysian palm oil and its products by enhancing the image

of palm oil and creating better acceptance of palm oil through awareness of various technological

and economic advantages (techno-economic advantages) and environmental sustainability.

objectives• To enhance trade opportunities in the market place by identifying and meeting the latest

opportunities in the market.

• To encourage product diversification by using Malaysian palm oil as the key ingredient, thus

gaining a prominent role in new and reformulated products.

• To improve understanding of palm oil, enhancing its application and elucidating its numerous

strengths and benefits

• To uphold the good name of Malaysian palm oil by closing the gap between the issues of

perception, allegations and the realities of palm oil.

• To safeguard Malaysian palm oil as the most dominant vegetable oil in terms of market

coverage, nutritional benefits, environmental sustainability and commercial success.


4

board

Dato’ Seri Lee Oi Hian Chairman(retired on Feb 21, 2009and replaced by Dato’ Lee Yeow Chor)

Dato’ Lee Yeow Chor

Nurmala Abd RahimTan Sri Datuk Dr Yusof Basiron

5


of trustees

Ramli Putih Dato’ Er Kok Leong

Dato’ Dr Mohd Basri Wahid Dato’ Carl Bek-Nielsen


6 board of trustees (cont’d)

Datu Vasco Sabat Singkang Dato’ Azhar Abdul Hamid

R Venugopal Low Kock Ching

Haji Eusope @ Yusoff Haji Ismail

7


board of trustees & committees

Board of TrusteesDato’ Seri Lee Oi Hian (Chairman)

Nurmala Abd Rahim• representing Ministry of Plantation Industries and Commodities (KPPK)

Tan Sri Datuk Dr Yusof Basiron• representing Ministry of Plantation Industries and Commodities (KPPK)

Dato’ Dr Mohd Basri Wahid• representing Ministry of Plantation Industries and Commodities (KPPK)

Dato’ Carl Bek-Nielsen• representing Malaysian Palm Oil Association (MPOA)

Dato’ Lee Yeow Chor• representing Malaysian Palm Oil Association (MPOA)

Dato’ Azhar Abdul Hamid• representing Malaysian Palm Oil Association (MPOA) (from June 27, 2008)

R Venugopal• representing Malayan Edible Oil Manufacturers’ Association (MEOMA) (from April 22, 2008)

Ramli Putih• representing Federal Land Development Authority (FELDA)

Low Kock Ching• representing Palm Oil Millers Association (POMA) (from June 30, 2008)

Dato’ Er Kok Leong • representing Palm Oil Refiners Association Malaysia (PORAM)

Haji Eusope @ Yusoff Haji Ismail• representing National Association of Smallholders (NASH) (from March 3, 2008)

Datu Vasco Sabat Singkang• representing Sarawak Land Consolidation and Rehabilitation Authority (SALCRA)

Datuk Mazlan Haji Jamaludin• representing National Association of Smallholders (NASH) (up to March 3, 2008)

Dato’ Low Mong Hua• representing Palm Oil Millers Association (POMA) (up to April 13, 2008)

Muhammad Hakim See Abdullah• representing Malayan Edible Oil Manufacturers’ Association (MEOMA) (up to April 22, 2008)

Dato’ Haji Sabri Ahmad• representing Malaysian Palm Oil Association (MPOA) (up to June 27, 2008)

Kwok Kian Hai• representing Pasir Gudang Edible Oils Sdn Bhd (up to September 30, 2008)

Finance and General Affairs Committee

Dato’ Er Kok Leong(Chairman) (from June 18, 2008)

Tan Sri Datuk Dr Yusof Basiron

Nurmala Abd Rahim

Ahmad Sidek Stroo

R Venugopal (from June 18, 2008)

Dato’ Low Mong Hua (Chairman)(up to April 13, 2008)


8organisation chart & management team

Tan Sri Datuk Dr Yusof BasironChief Executive Officer

Dr Kalyana SundramDeputy CEO / Director, Science &

Environment Division

Computer & Communications Unit

- MIS Executive- Information Service Executive- Communication Web Executive- Script Writer- Video Technician

Senior Fellow (Environment)Senior Fellow (Nutrition)

Manager, Science & Environment

- Senior Executive, Science & Environment- Executive, Science & Environment (Nutrition)- Executive, Science & Environment (Non-Food)- Executive, Environment

Muahamad Sanuri SarijanDirector, Finance &

Human Resource Division

Manager, Finance & Human Resource

- Accountant- Administrative Executive

Wira AdamDirector, Marketing &

Market Development Division

Manager, Marketing

- Analyst, Europe - Analyst, Asia Pacific - Analyst, Sub-Continent

Manager, Market Development

Regional Managers - Americas - Europe - Africa - West Suez - East Suez

Belvinder Kaur SronDirector, Promotions &

Branding Division

Manager, Promotions & Branding

- Senior Executive, Promotions & Branding- Executive, Promotions & Branding- Advertising & Promotions Executive- Publications Executive

- Analyst, Middle East - Analyst, Africa - Analyst, Americas

- Pakistan - India - Bangladesh - China - Asia Pacific

9


2008 was a remarkable year, one that was both rewarding

and challenging for the Malaysian palm oil industry.

Crude palm oil (CPO) production reached �7.7 million

tonnes, recording a �2% increase over the previous year.

The increase in oil yield and expansion of mature planted

areas were the primary factors behind this growth.

CPO prices soared in tandem with crude mineral oil to an all-time record of

RM4,�79.50 in March, enabling plantation companies to reap profits, although

this proved to be short-lived. The industry witnessed another record of sorts

when CPO prices dipped to an eight-year low at RM�,403 in November, partly

due to a drop in the price of crude mineral oil. Rising palm oil stock levels

from September, to a whopping 2.3 million tonnes by end November, aggravated

sentiments. The shadow cast by potential over-supply in the oils and fats market

affected CPO prices.

chairman’sstatement



�0 chairman’s statement (cont’d)

Despite the challenges, palm oil contributed RM65.2 billion to Malaysia’s export revenue, or an increase of 44.3% over 2007.

This was mainly due to high prices in the first half of the year. CPO production registered a �2.�% increase from �5.8 million

tonnes in 2007, thanks to recovery of yield after the biological stress experienced the previous year.

One milestone of the year was that exports to the United States of America surpassed � million tonnes, showing an increase of

3�.8% compared to 2007. This was largely due to enforcement of mandatory labelling of the trans-fatty acid content in food-

products from January 2007. The growth in export volume to the US was also promoted by higher demand from the bio-fuel

sector.

China continued to be the major consumer of Malaysian palm oil despite a slight decline of �.2% in imports. This was attributed

to increased oilseed imports for local crushing, as well as absorption of palm oil from other sources.

Sustainability has emerged as a key issue in recent years, especially in Europe. Germany, the United Kingdom, and the

Netherlands are leading the European Union in formulating sustainability and certification criteria for bio-fuels. Year 2008

saw more countries preparing to be on par with Germany, the United Kingdom, and the Netherlands for sustainability-related

definitions and enforcement. MPOC has had to formulate effective responses and strategies to better safeguard the interests

of Malaysian palm oil and to present the correct picture of many issues being debated in Brussels. Several programmes were

organised to neutralise misconceptions about, and consolidate support for, Malaysian palm oil in the European Parliament.

Meetings with key policy makers were held in conjunction with the working visit of YB Datuk Peter Chin Fah Kui, Minister of

Plantation Industries and Commodities, to The Hague, Brussels and London.

High energy prices in the first half of the year partially assisted the growth of the Malaysian bio-diesel sector. By the end of the

year, �4 bio-diesel plants had been established, with a combined annual production capacity of �.7 million tonnes. The widely

accepted need to reduce greenhouse gas emissions has pushed countries to seek alternative sources of fuel, as well as lent

urgency to production of sustainable palm oil for the bio-fuel sector. Malaysia’s own mandate for a B5 fuel supply saw keen

interest in palm bio-fuel.

These developments, along with the vital need to inform the world about sustainable agricultural and plantation practices in

Malaysia, led MPOC to formulate the MALAYSIAPALM certification scheme. The initial target-group comprises manufacturers of

palm bio-diesel. However, the scheme is also open on voluntary basis to oil palm growers, palm oil millers, refiners, traders and

bio-diesel producers. It provides an opportunity for those who admitted to assure clients that their palm oil is obtained from oil

palm cultivated on legal agricultural land, using good agricultural and management practices.

MPOC organised the International Palm Oil Sustainability Conference for the first time to address growing concerns about palm

oil and the environment. The industry’s efforts to translate Corporate Social Responsibility into action were given prominence.

The Malaysian Palm Oil Wildlife Conservation Fund, established by MPOC, reflected collaboration, support and funding from

Bursa Malaysia for an Orang Utan Survey by the Borneo Conservation Trust and the non-governmental organisation called

HUTAN.

��


The Palm Oil Trade Fair and Seminar (POTS) series, which have become MPOC’s trademark event, were organised in Dubai,

Mumbai and Nanjing. This followed the launch in Kuala Lumpur, themed ‘Changing Marketing Landscape – Challenges for

Business Sustainability’. The international-level POTS were timely in view of issues confronting the global market and high

prices of energy and essential food commodities.

Print and electronic media promotional campaigns were undertaken in various regions, targeted at general consumers and

medical practitioners in particular. These were in line with MPOC’s continuing efforts to highlight the health and nutritional

benefits of palm oil.

Another key event of the year was the Palm Oil Industry Leadership Award and Dinner, which was used as a platform to present the

inaugural Palm Oil Industry Leadership Award (PILA). PILA was created to honour individuals whose leadership has contributed

significantly to the well being of the Malaysian palm oil industry. The inaugural recipient was YABhg Tun Dr Lim Keng Yaik, a

former Minister of Primary Industries.

Two Council Members completed their term of service – Dato’ Sabri Ahmad (MPOA) and Mr Kwok Kian Hai (Pasir Gudang

Edible Oils Sdn Bhd) served up to June 26 and August 27 respectively. Additions to the Council were Mr R Venugopal

(MEOMA) and Mr Low Kock Ching (POMA). The Council was saddened by the sudden demise of Dato’ Low Mong Hua on

April �3, 2008. The industry has lost a prominent leader who was at the helm of the Palm Oil Millers Association for 2� years.

His contributions were immeasurable and he will be remembered with gratitude and respect.

I would like to specially thank Dato’ Seri Lee Oi Hian who completed his tenure as Chairman of MPOC on Feb 2�, 2009.

Dato’ Seri Lee fulfilled his mandate with unwavering dedication over the �9 years of his involvement with MPOC, �3 years of

which was as its Chairman.

My heartfelt gratitude to fellow members of the Board of Trustees of MPOC for their tireless efforts and commitment in dealing

with new issues and challenges faced by the industry. I would also like to thank the Malaysian Palm Oil Board, Malaysian Palm

Oil Association, Palm Oil Refiners Association of Malaysia, Malayan Edible Oil Manufacturers’ Association, Malaysian

Oleochemical Manufacturers Group, diplomatic and trade missions abroad and numerous other agencies that have provided

invaluable support, assistance and guidance throughout the year.

Finally, I extend my sincere appreciation to the management and staff of MPOC for their contributions and endeavour in all

activities undertaken. I am confident that such diligence and perseverance will see us through the anticipated difficult times in

the coming year, in the face of the unprecedented global economic slowdown.

chairman’s statement (cont’d)


�2

ceo’s report

Malaysian palm oil industry performance 2008

The world vegetable oils market was bullish for much

of the year, as demonstrated by the sustained high

demand for food and non-food products, as well as

for bio-fuel.

Palm oil prices in the first half of the year were boosted to levels which

departed from the justification of supply and demand fundamentals, even

hitting a historic high in March. A meltdown then saw prices losing more

than half of their value.

This was magnified by the fallout from the ‘credit crunch’ in the US financial

market and rising palm oil stocks at home. Nonetheless, palm oil exports

generated RM65.�9 billion in revenue due mainly to the spike in prices.

Tan Sri Datuk Dr Yusof Basiron

�3


ceo’s report (cont’d)

Total oil palm planted area stood at 4.49 million ha, up by 4.25% compared to the previous year (Table �). Crude palm oil (CPO)

production touched �7.73 million tonnes, significantly more by �.9� million tonnes. This was attributed to recovery in overall

yield and the larger mature area. Crude palm kernel oil production rose by ��.73% to 2.�3 million tonnes from �.9� million

tonnes in 2007.

Table 1: Oil Palm Planted Area and Output

Jan-Dec 2007 Jan-Dec 2008 Change Change (%)

Planted area (ha) 4,304,9�4 4,487,957 �83,043 4.25

Production (tonnes)

Crude palm oil �5,823,746 �7,734,439 �,9�0,693 �2.07

Crude palm kernel oil �,907,6�3 2,�3�,399 223,786 ��.73

Closing Stocks (tonnes)

Palm oil �,682,587 �,994,68� 3�2,094 �8.54

Palm kernel oil 268,842 348,747 79,905 29.72

Source: MPOB** Figures as at February 15, 2009; subject to revision

As an outcome of higher production and lower demand, palm oil closing stocks at the end of December stood at �.99 million

tonnes, or �8.54% more than in 2007. Palm kernel oil closing stocks were at 0.34 million tonnes, compared to 0.26 million

tonnes previously.

In terms of volume, export demand for palm oil and derived products was ��.�2% higher year-on-year, reflecting higher

availability (Table 2). Palm oil exports were recorded at �5.4� million tonnes, compared to �3.75 million tonnes the previous

year, or up by �.66 million tonnes.

Oleochemical exports were, however, affected by the high price and declined by 3.�8% to 2.07 million tonnes from 2.�4 million

tonnes in 2007. Additional production of bio-diesel led to �82,�08 tonnes being exported, against the previous year’s level of

95,0�3 tonnes. Exports of finished products doubled in volume at 670,570 tonnes, from 35�,�83 tonnes in 2007.

Table 2: Export of Palm Oil and Derived Products (tonnes)

Jan-Dec 2007 Jan-Dec 2008 Change (Vol) Change (%)

Palm oil �3,746,823 �5,408,753 �,66�,930 �2.09

Palm kernel oil �,060,7�3 �,047,380 -�3,333 -�.26

Palm kernel cake 2,093,500 2,255,092 �6�,592 7.72

Oleochemical products 2,�40,�73 2,072,22� -67,952 -3.�8

Finished products 35�,�83 670,570 3�9,387 90.95

Bio-diesel 95,0�3 �82,�08 87,095 9�.67

Others 86,839 ��3,95� 27,��2 3�.22

Total Exports 19,574,244 21,750,075 2,175,831 11.12



�4 ceo’s report (cont’d)

Malaysian palm oil exports grew by �2.09% over the comparative period. China, the European Union (EU), Pakistan, United

States (US) and India were the biggest buyers, accounting for 60% or 8.3 million tonnes of the volume (Table 3). China remained

the single largest importer, absorbing 3.79 million tonnes or 24.62% exports. EU and Pakistan showed an intake of 2.05 million

tonnes and �.25 million tonnes respectively.

Table 3: Malaysian Palm oil Exports to Selected Destinations (tonnes)


China 3,840,389 3,794,494 -45,895 -�.20

EU-27 2,063,226 2,052,77� -�0,455 -0.5�

Pakistan �,070,067 �,257,396 �87,329 �7.5�

India 5��,�67 970,734 459,567 89.9�

US 794,920 �,047,668 252,748 3�.80

North East* 888,443 883,74� -4,702 -0.53

ASEAN 803,79� 756,579 -47,2�2 -5.87

Bangladesh �54,494 27�,265 ��6,77� 75.58

Egypt �84,588 347,558 �62,970 88.29

UAE 360,509 356,395 -4,��4 -�.�4

Total Exports 13,746,823 15,408,753 1,661,930 12.09

Note: * Includes Japan, South Korea, North Korea & Taiwan Source: MPOB** Figures as at February 15, 2009; subject to revision

The US imported �.04 million tonnes of Malaysian palm oil, up by 3�.8% from the previous year. This was due partly to

implementation of mandatory labelling of the trans-fatty acid content in manufactured foods, enforced from January 2007.

Higher demand was also generated by use of palm oil as feedstock for bio-fuel production.

�5



India held a clear lead in year-on year percentage growth. Changes in its import policy regime resulted in a smoother in-flow of

palm oil, leading to 970,734 tonnes being taken up against 5��,�67 tonnes the year before. The export volume to Egypt recovered

to 347,558 tonnes against a low of �84,588 tonnes the previous year.

Table 4: Malaysian Palm Oil Exports by Region (tonnes)


Asia Pacific 5,777,8�7 5,678,489 -99,328 -�.72

Sub-Continent �,907,482 2,708,34� 800,859 4�.99

Middle-East �,446,303 �,903,409 457,�06 3�.6�

Africa �,248,467 �,260,3�4 ��,847 0.95

Europe 2,4�6,��6 2,668,437 252,32� �0.44

Americas 92�,408 �,�89,763 268,355 29.�2

Others 29,230 - -29,230 -

Total 13,746,823 15,408,753 1,661,930 12.09


Despite the volatility in palm oil prices, an all-time high surpassing RM4,000 per tonne of CPO was achieved in March. An

average price of RM3,465 per tonne was recorded in the first quarter but toward year’s end, the price plunged to about RM�,500.

Average local delivered CPO price was RM2,773, against RM2,5�6.50 in 2007 (Table 5).

Average export prices of RBD palm oil, RBD palm olein, and RBD palm stearin rose respectively to RM2,699 (by 2.2%), RM3,055

(�8%) and RM2,5��.50 (�.6%) per tonne. The price of Palm Fatty Acid Distillates declined by �3.2% to RM�,674 per tonne.

Table 5: Average Price of Palm Oil and Derived Products


Domestic Price* (RM/tonne)

Crude palm oil 2,5�6.50 2,773.00 256.50 �0.�9

Crude palm kernel oil 2,807.50 3,437.00 629.50 22.42

Export Price (US$/tonne)

RBD palm oil 77�.50 806.00 34.50 4.47

RBD palm olein 753.00 922.00 �69.00 22.44

RBD palm stearin 733.50 774.50 4�.00 5.59

PFAD 563.00 50�.00 -62.00 -��.0�

Note: *Average for Malaysia Source: MPOB** Figures as at February 15, 2009; subject to revision


�6 ceo’s report (cont’d)

Export earnings from all palm oil products improved significantly to RM65.�9 billion (Table 6). Palm oil sales alone brought

in 44.39% more in revenue, while revenue from palm kernel oil and oleochemical products increased by 33.98% and 29.96%

respectively. Finished products accounted for RM2.65 billion, more than twice the previous year’s value of RM�.09 billion.

Table 6: Revenue from Export of Palm Oil and Derived Products (RM million)


Palm oil 33,�86.7 47,9�7.6 �4,730.9 44.39

Palm kernel oil 3,�04.9 4,�59.8 �,054.9 33.98

Palm kernel cake 76�.7 990.0 228.2 29.96

Oleochemicals 6,679.6 8,695.3 2,0�5.7 30.�8

Finished products �,098.3 2,656.5 �,558.2 �4�.87

Bio-diesel 253.2 6�0.7 357.5 �4�.�9

Others 84.7 �64.5 79.8 94.20

Total Revenue 45,169.1 65,194.4 20,025.2 44.33


Global scenario

World production of oils and fats stood at �60 million tonnes. Of this, palm oil and palm kernel oil jointly accounted for 48

million tonnes (30%), leading other sectors. Soybean oil was next with 37.�6 million tonnes (23%).

Source: Oil World, Dec 12, 2008 & Jan 30, 2009 issues

World Oils and Fats Production, 2008

(160.03 million tonnes) Soybean23%

Palm &Palm Kernel30%Rapeseed

�2%

Sunflower7%

Animal Fats�5%

Others��%

Coconut2%

�7


About 38% of the oils and fats produced were traded. Of the 60.3 million tonnes of oils and fats exported worldwide, palm oil

and palm kernel oil again took top ranking, at about 60% of the total.

Source: Oil World, Dec 12, 2008 & Jan 30, 2009 issues

Malaysia contributed close to ��% to the global oils and fats output through �7.7 million tonnes of palm oil. It also held 45%

of the market share, thereby maintaining dominance of the palm oil trade.

Source: Oil World, Dec 12, 2008 issue


World Oils and Fats Export Trade, 2008

(60.30 million tonnes)

Others4%

Coconut3%

Soybean�7%

Palm & Palm Kernel60%

Rapeseed4%

Sunflower6%

Animal Fats6%

PNG�%

Indonesia43%

Thailand�%

Others�0%

Malaysia45%

World Palm Oil Exporters, 2008

(33.48 million tonnes)


�8

Outlook for 2009

Among the factors that had led to the plunge in CPO price towards the end of 2008 was concern over large palm oil stocks;

decline in export trade resulting from apprehension over potential default; and difficulty in obtaining credit because of the

global financial crisis. With the onset of the global economic slowdown and recession in some trading countries, there continue

to be doubts over the CPO price in 2009.

The Malaysian Government’s measures to stimulate the economy have addressed the immediate concerns of the palm oil sector,

and enabled it to brace itself for difficulties ahead. The steps are linked to supply management, such as the replanting scheme;

stimulation of domestic demand through the policy on bio-diesel blends; and allocation of financial credit to selected importing

countries to bolster export growth.

Global oils and fats production for the 2008/09 season is expected to increase by 3.34% to �64 million tonnes, compared to

�60 million tonnes currently. Demand growth is expected to be sustained at 3.87%.

The tightness in supply may be attributed to lower soybean oil output resulting from crop losses in South America. Hence, overall

oils and fats supply could lag behind consumption, which may result in lower stocks of �7.55 million tonnes against �7.63

million tonnes currently.

Palm oil output is expected to reach 44.9 million tonnes, up by less than �.9 million tonnes compared to 4.�4 million tonnes

in 2008. Malaysia’s CPO production is estimated to rise marginally, or the least remain in the vicinity of �7.6 million tonnes,

due to the seasonal slowdown in yield.

While this may be positive for the outlook of palm oil prices, the key variable of recovery will be the strength of external

demand for oils and fats – and this has already been shown to be susceptible to recession in developed countries.

The extent of recession will determine the outlook for the larger global economy, while the fiscal measures undertaken will

determine the pace of demand for palm oil, for both food and bio-fuel purposes.


�9


market overview


20 asia pacific

MARKET OVERVIEW

The region’s intake of oils and fats registered �2.07 million tonnes, marginally lower than the �2.48 million tonnes absorbed in

2007. This was attributed mainly to the sharp decline in soybean oil imports by China, following a bumper harvest at home.

Palm oil imports bucked the trend of lower regional demand for oils and fats, and continued to lead overall imports with a tally

of 7.57 million tonnes. It benefited from the crisis in Argentina which affected soybean exports. As a result, the palm oil market

share rose from 57.7% to 62.7%.

Table 1: Asia Pacific – Oils and Fats Imports (‘000 tonnes)


PO - Malaysia 5,777.8� 5,678.5 -99.3 -�.7

PO - Indonesia� �,428.0 �,886.5 458.5 32.�

SBO2 3,3�9.8 2,640.2 -679.6 -20.5

RSO3 424.� 279.8 -�44.3 -34.0

PKO - Malaysia 352.7 325.2 -27.5 -7.8

PKO - Indonesia� 3�8.� 325.4 7.3 2.3

CNO� �95.9 254.5 58.6 29.9

Tallow & Grease4 574.5 593.7 �9.2 3.3

Butter5 87.2 85.4 -�.8 -2.�

Total 12,478.11 12,069.20 -408.9 -3.3

Sources: Oil World; MPOBNote: 1 Exports of Indonesia (Jan-Aug)2 Exports of Argentina, Brazil (Jan-Dec) & US (Jan-Nov)3 Exports of Australia (Jan-Nov) & Canada (Jan-Oct)4 Exports of Australia, New Zealand, US (Jan-Nov) & Canada (Jan-Oct) 5 Exports of Australia & New Zealand (Jan-Nov)

Regional palm oil imports went up by 557,000 tonnes from 7.2� million tonnes in 2007. Indonesia’s contributions grew by

32% year-on-year, even though it had raised export tax to as high as 20%. Exporters used Malaysian ports as transit points to

bypass the tax, for onward shipping of palm oil to final destinations.

2�


asia pacific (cont’d)

Malaysian palm oil exports fell by 99,328 tonnes (�.7%) year-on-year. However, the volume of 5.68 million tonnes still took

the biggest slice of the market. China, which remained the region’s largest importer, absorbed 3.89 million tonnes compared to

3.93 million tonnes the previous year.

Table 2: Asia Pacific – Import of Malaysian Palm Oil (tonnes)


China 3,939,497 3,892,442 -47,055 -�.2

North East 889,3�6 884,800 -4,5�6 -0.5

ASEAN 803,79� 756,579 -47,2�2 -5.9

Oceania �45,2�3 �44,662 -55� -0.4

Total 5,777,817 5,678,489 -99,328 -1.7

Source:MPOB

After a strong run of growth in 2007, the ASEAN market experienced a slow down in imports which stood at 756,579 tonnes,

down by 5.9%, in the year under review. Higher palm oil prices discouraged intake, particularly in price-sensitive markets like

Vietnam where imports went down by 49,2�2 tonnes (�9.6%).

Table 3: Asia Pacific – Import of Malaysian Palm Oil by Product (tonnes)


CPO/CPL/CPS 230,344 348,669 ��8,325 5�.4

RBD PO 452,699 442,384 -�0,3�5 -2.3

RBD PL 4,�02,3�0 3,952,5�6 -�49,794 -3.7

RBD PS 733,349 565,526 -�67,823 -22.9

PFAD 24,947 3�,068 6,�2� 24.5

CO/DPL 39,707 35,306 -4,40� -��.�

DFPL/Super PL 47,637 44,539 -3,098 -6.5

PMF/Soft Stearin 59,247 74,999 �5,752 26.6

Others 87,577 �83,482 95,905 ��.4

Total 5,777,817 5,678,489 -99,328 -1.7

Source: MPOB


22

RBD palm oil, palm olein and palm stearin were still the major products imported from Malaysia, albeit in smaller quantities

than in 2007. The drop in demand led to overall exports of palm-based products falling to 87.4%, from 9�.5% previously.

However, the impact was partly offset by increased CPO imports by China.

Table 4: Asia Pacific – Import of Malaysian Palm Oil by Country (tonnes)


China 3,939,497 3,892,442 -47,055 -�.2

North East

Japan 527,344 546,968 �9,624 3.7

Mongolia 873 �,058 �86 2�.3

North Korea 2,975 8,052 5,077 �70.7

South Korea 222,007 �96,572 -25,364 -��.4

Taiwan �36,��7 �32,�50 -3,967 -2.9

Sub-total 889,3�6 884,800 -4,444 -0.5

ASEAN

Brunei 3,424 3,�60 -264 -7.7

Cambodia 5,�27 5,202 75 �.5

Indonesia 20,037 2,043 -�7,994 -89.8

Philippines �28,062 �6�,453 33,39� 26.�

Singapore 379,708 354,966 -24,742 -6.5

Thailand �5,909 27,443 ��,534 72.5

Vietnam 25�,524 202,3�2 -49,2�2 -�9.6

Sub-total 803,79� 756,579 -47,2�2 -5.9

Oceania

Australia �20,934 ��8,0�9 -2,9�5 -2.4

Fiji �,203 2,366 �,�63 96.7

Kiribati �7 �9 2 ��.8

New Caledonia 95 66 -29 -30.5

New Zealand 2�,783 22,293 5�0 2.3

PNG 838 �,734 896 �06.9

Solomon Is 326 �42 -�84 -56.4

Vanuatu �3 0 -�3 -�00.0

Tonga 4 0 -4 -�00.0

French Polynesia 0 22 22 NA

Sub-total �45,2�3 �44,66� -552 -0.4

Total in Region 5,777,817 5,678,489 -99,328 -1.7

Source: MPOB


23



PALM OIL EDUCATION PROGAMME FOR TERTIARY STUDENTS

SingaporeMPOC initiated the programme to enable Singaporeans to gain better understanding of palm oil. Lectures on palm oil and its

benefits were delivered at the following institutions of higher education.

1. Ngee Ann Polytechnic (May 2) 4. Singapore Polytechnic (July 16)

2. Temasek Polytechnic (May 9) 5. Singapore Institute of Food Science & Technology (July 18)

3. Nanyang Polytechnic (July 8) 6. National University of Singapore (Aug 19)

Nanyang Polytechnic-Jiangnan University

Inaugural Joint Scientific Conference,

(Sept 23-24) At the invitation of the School of Chemical and Life Sciences of

Nanyang Polytechnic in Singapore, MPOC presented technical

information on the nutritional benefits and food applications of

palm oil. Faculty members of the School of Food Science and

Technology of Jiangnan University, China, were at the conference as well. MPOC also took part in an exhibition that enabled

participants to obtain additional information on palm oil.

Vietnam

Hanoi Hanoi University of Technology (Dec 5)This educational programme for students majoring in science, technology and medicine drew 275 students. Topics included

nutritional aspects of palm oil, food and non-food applications, oleochemicals, and global trade in palm oil.

1 2 3

4 5 6


24

PROMOTIONAL ACTIVITIES

Symposium on Palm Oil in Conjunction with the �6th National Convention of Council of

Hotel and Restaurant Educators of The Philippines, Manila (Jan 24-26)MPOC’s participation was targeted to provide updates on palm oil, nutrition and food applications. The audience comprised

members of the hospitality education industry, which is enjoying rapid growth. MPOC contributed through a lunch symposium

and an exhibition.

Personal Care and Homecare Ingredients Exhibition, Shanghai, China (March �7-�9)MPOC participated in the exhibition and organised a half-day seminar to encourage the use of palm-based oleochemicals in

personal care, cosmetic and home-care products which currently enjoy high demand in China. More than 300 local and foreign

exhibitors took part.

Food Ingredients China, Shanghai (March 26-28) One of the most authoritative trade shows on food additives and

ingredients in Asia, this attracted over �,�00 exhibitors from more than

30 countries and regions. Three Malaysian companies – Carotech Bhd,

MOI International Food Co Ltd and Taiko International Trade (Shanghai)

Co Ltd – participated alongside MPOC to demonstrate the versatility of

palm oil. This also lent an opportunity to establish contacts with

manufacturers from all over China.

Health and Nutrition Exhibition, Beijing, China

(April 3-5)With food safety a major concern, the exhibition was an ideal platform

to exchange information and keep abreast of market trends. MPOC

reinforced the health properties of palm oil, while fostering links with

key players in China.


25


China Bakery Exhibition, Guangzhou (May �3-�5) The event showcased the wide range of applications of palm oil in the

baking and confectionery industry. MPOC, in partnership with MOI

International Food Co Ltd, reached out to users and manufacturers of

bakery fats, to establish contacts.

Seoul Food and Hotel Exhibition, South Korea

(May �4-�7)

The fourth biggest food exhibition in Asia, it attracted an estimated

35,000 visitors. There were �,052 exhibitors, with more than 450 of them from

34 countries. MATRADE’s Malaysia Pavilion grouped �� companies.

MPOC joined Sime Darby Plantation Sdn Bhd to promote palm-based

solid and specialty fats.

Thaifex 2008 International Food Exhibition & Conference, Bangkok, Thailand

(May 2�-25)MPOC collaborated with Carotech Bhd and Meetco Sdn Bhd in taking part in the exhibition, which had more than

50,000 visitors. The event is the largest food event in Asia. A paper entitled ‘Trans-fat alternative using palm oil and mixed oil’

was presented at the conference, which had about �00 participants.

Food and Hotel Asia (FHA) Exhibition, Singapore

(April 22-25) MPOC took part in the ‘FoodAsia’ category of the exhibition under

the pavilion hosted by MATRADE. FHA is acknowledged as one of

Asia’s largest food and hospitality trade events. Apart from trade and

market updates, MPOC provided information on technical aspects of

palm oil to members of the region’s food and hospitality industry.



26

Seminar on ‘Development of the Oleochemical Industry in China’, Huangshan (June �7-�8)The inaugural meeting of the Oleochemical Application Committee attracted some 200 participants. This was a useful event

to paint a broad perspective of Malaysian palm oil in relation to its uses in the oleochemical sector.

International Conference on Sustainable Agriculture, Sapporo, Japan (July 2-6)The conference addressed growing concerns over supplies of food and energy derived from agricultural sources. It concluded

with the Sapporo Declaration on Sustainable Agriculture for Food, Energy and Industry, which reflected input and proposals

from �� sessions at which 49 papers were presented.

In addition, there were 53 poster presentations including one from MPOC entitled ‘The Sustainability Edge of the Malaysian

Palm Oil Industry’. It highlighted the strategies, principles and policies of the Malaysian palm oil industry in providing the

world with sustainable palm oil. Japanese scientists and researchers, who were not aware of such sustainability practices,

found the information relevant to their work.

EU Bio-fuels Workshop on ‘Opportunities for Southeast Asia’, Jakarta, (July ��) MPOC joined the Malaysian delegation to raise issues resulting from the EU’s proposed Directive on Renewable Energy for

Member-States. The Directive is seeking to establish national renewable energy targets that result in an overall binding target

of a 20% share of renewable energy sources in energy consumption, and a binding �0% minimum target for renewables,

such as bio-fuels, in transport in 2020. The Directive also sets environmental sustainability criteria for bio-fuels to ensure that

these are produced in a sustainable manner.

Some of the key issues the Malaysian delegation raised were exclusion of social contributions of palm oil, unwarranted default

values for palm bio-diesel, inaccuracy of inefficiency value, absence of uniformity in cut-off dates, and the use of different

mechanisms for recognising ‘green’ electricity and greenhouse gas savings. The European Commission commented that it

would study the issues and said it welcomes further discussions with Malaysia.


27


47th Annual Convention of the Philippine

Association of Food Technologists Inc, Manila

(Sept �-3)

This is a key meeting for food scientists and technologists in The

Philippines. MPOC’s technical presentation updated participants on

food technology and nutrition. It highlighted the advantages of using

palm oil as a substitute for partially hydrogenated oils, which have

been found to create hazardous trans-fatty acids in food formulations.

This was reinforced through product displays and materials distributed during the parallel trade exhibition.

POTS China, Nanjing (Oct �6-�8)

The China leg of MPOC’s Palm Oil Trade Fair and Seminar was a key

programme for the region. It was co-organised with the China Council

for Promotion of International Trade in Grain, Development and Exchange

Centre of State Administration of Grain and China National Vegetable

Oil Association.

The Malaysian delegation included Bursa Malaysia, Lipochem (M) Sdn Bhd, Lipochem Bio-Tech Sdn Bhd, IPalm Supplies Sdn

Bhd, Sime Darby Plantation Sdn Bhd, Natural Oleochemicals Sdn Bhd, FELDA IFFCO Sdn Bhd, My Flexitank Industries Sdn Bhd

and East China Cereals and Oils Electronics Commerce Co Ltd. They entertained enquires from food and non-food enterprises

and promoted various applications and production technology of Malaysian palm oil and its derivatives.

�7th Asia Food Expo, Manila, The Philippines

(Sept 3-6)This is the biggest local exhibition catering to food-related products and

services. MPOC, working with representatives of Sime Darby Plantation

Sdn Bhd and Soon Soon Oilmills Sdn Bhd, helped educate players in

the industrial oils and fats sector on the advantages of using palm-based

products. This was MPOC’s first participation in the event. It joined nine

companies in the Malaysia Pavilion under the auspices of MATRADE.



28

China Confectionery and Ice Cream Exhibition,

Tianjin (Oct 2�-24) MPOC and MOI International Food Co Ltd took part to promote the

suitability of palm oil and palm kernel oil in making confectionery and ice

cream. Leading producers, manufacturers, ingredient suppliers, suppliers

of equipment were among the participants.

9th Western China International Economy and

Trade Fair, Chengdu (Oct 27-30)MATRADE led the Malaysian delegation comprising representatives of

MPOC, Malaysian Timber Council, Tourism Malaysia and Redwire Global

Solutions Sdn Bhd. Each was assigned an information counter.

MPOC displayed samples of palm oil and palm-based products,

distributed brochures and responded to enquires. The information went down well, with many showing interest in the products

and asking about availability in the local market for use in both the food and non-food sectors.

International Conference on ‘Functional Foods and Edible Oils – The Future’, Auckland,

New Zealand (Nov �2-�3) Food researchers, scientists and industry players were at the conference which focused on oils and fats issues and applications.

MPOC sponsored three speakers who covered current issues. The lectures were on palm oil as the preferred substitute for

hydrogenated fat in food products; stability and frying characteristics of palm olein; and health benefits of natural antioxidants

from palm oil. MPOC set up a trade stand where participants could seek additional information on food and non-food

applications of palm oil.

Personal Care Ingredients Exhibition, Bangkok, Thailand (Nov �6-�9) MPOC participated in the exhibition and organised a half-day seminar. The objective was to expand the use of palm-based

oleochemicals as ingredients in personal care and cosmetic products. There were over 300 exhibitors. Technical material and

papers were presented during the seminar.


29


RSPO 6th Roundtable Meeting, Bali, Indonesia (Nov �7-20)Almost 550 participants, including MPOC representatives, were at the sixth meeting of the Roundtable for Sustainable

Production of Palm Oil. It culminated in the General Assembly at which three resolutions were tabled for a vote:

• Wetlands International sought a moratorium on palm oil from tropical peatland. This will be discussed together with the

issue of greenhouse gas emissions. A working group has been formed to develop the terms of reference.

• Oxfam International wanted a Code of Conduct to which members could commit and subsequently report annual progress.

This was supported by IOI Group, Kulim, Sawit Watch and WWF International. As the majority of members agreed, the

resolution was adopted.

• WWF International asked for procedures to assure compliance with the RSPO Principles and Criteria in relation to new

plantings. New Britain Palm Oil Ltd supported the move. A working group will be established to discuss the resolution

and arrive at a decision by June 2009. The resolution will then be tabled at the next General Assembly in 2009.



30 sub-continent

MARKET OVERVIEW

A significant increase exceeding �.3 million tonnes (�6.5%) was seen in the region’s oils and fats imports. India recorded

the largest volume of �.62 million tonnes (up by 3�.4%) to 6.78 million tonnes, following the removal of import duty in April

as well as a dramatic drop in vegetable oil prices in the international market. Anticipated reinstatement of import duty by the

Indian government with effect from 2009 also prompted additional imports before the year ended.

Table 5: Sub-Continent – Oils and Fats Imports by Country (‘000 tonnes)


India� 5,�63,790 6,784,034 �,620,244 3�.4

Pakistan2 �,845,348 �,654,755 -�90,593 -�0.3

Bangladesh3 �,�6�,247 �,080,573 -80,674 -6.9

Sri Lanka - - - -

Total 8,170,385 9,519,362 1,348,977 16.5

Sources: 1SEA of India; 2MPOC Pakistan; 3MPOC Bangladesh

Pakistan and Bangladesh intake fell by �0.3% and 6.9% respectively. Their intake was generally affected by the global

economic slowdown, cautious buys by importers due to market volatility, and lower consumer purchasing power.

Palm oil and palm fats regained their market share at 86% from soybean oil which held �0.8%. Crude palm kernel oil, other soft

oils and tallow made up the balance. The price differential between palm oil and soybean oil helped increase regional offtake

of palm oil. In India especially, a huge price discount against soybean oil resulted in clear preference for palm oil which is

currently free of import duty.

Table 6: Sub-Continent – Oils and Fats Imports by Product (tonnes)


PO� 5,694,609 7,796,3�5 2,�0�,706 36.9

SBO �,766,284 �,034,807 -73�,477 -4�.4

RSO/MO 7289� 26840 -46,05� -63.2

SFO �60,550 66,9�0 -93,640 -58.3

Tallow 50,543 3�,�00 -�9,443 -38.5

CPKO �04,969 �45,387 40,4�8 38.5

CNO �8,553 23,479 4,926 26.6

Other Palm Fats2 296,�30 390,725 94,595 3�.9

Others3 5,856 3,799 -2,057 -35.�

Total 8,170,385 9,519,362 1,348,977 16.5

Sources: SEA of India; MPOC Pakistan; MPOC BangladeshNote: 1CPO, CPL, RBD PO, RBD PL & Palm Stearin 2PAO, PFAD, PKFAD, PKAO & ROFS 3Refined vegetable oil, butter oil & ghee/shortening in consumer packs

3�


sub-continent (cont’d)

The price discount boosted imports of palm oil and its derivatives, which recorded outstanding growth of 36.7%. India led with

a 55.5% increase in volume, followed by Bangladesh with 40%. In contrast, Pakistan reduced intake of palm oil by 5.78% as part

of a move to lower all its oils and fats imports.

Table 7: Sub-Continent – Import of Palm Oil by Product (tonnes)


CPO 3,652,�48 5,0�9,838 �,367,690 37.4

CPL 537,288 668,2�0 �30,922 24.4

RBD PO 2,299 345,638 343,339 �4,934.3

RBD PL �,280,535 �,63�,62� 35�,086 27.4

Palm Stearin 222,339 �3�,008 -9�,33� -4�.�

CPKO �04,969 �45,387 40,4�8 38.5

PFAD 253,9�9 374,�67 �20,248 47.4

Others� 42,2�� 6558 -25,653 -60.8

Total 6,095,708 8,332,427 2,236,719 36.7

Sources: SEA of India; MPOC Pakistan; MPOC BangladeshNote: 1PKFAD, PKAO, ROFS & PAO

CPO was the most popular palm-based product with imports amounting to �.36 million tonnes (up by 37.4%), or more than

60% of the region’s volume. India alone absorbed more than 86% of the supply. Refined products – RBD palm oil and RBD palm

olein – went up by 54.�%, making up 23.7% of the overall trade in palm oil. RBD palm oil imports jumped markedly to

345,638 tonnes from just 2,299 tonnes previously, due to higher offtake by Pakistan. The record volume was due to price

competitiveness against domestic sources of RBD palm oil.


32 sub-continent (cont’d)

In spite of high prices of vegetable oils up to the third quarter of the year, the region’s imports of Malaysian palm oil

improved by 4�.9%. India, Pakistan and Bangladesh registered increases of 89.9%, �7.5% and 75.6% respectively, expanding

the volume by 763,667 tonnes. Malaysian exports to India rose by 459,567 tonnes and to Pakistan by �87,329 tonnes.

Table 8: Sub-Continent – Import of Malaysian Palm Oil by Country (tonnes)


India 5��,�67 970,734 459,567 89.9�

Pakistan �,070,067 �,257,396 �87,329 �7.5�

Bangladesh �54,494 27�,265 ��6,77� 75.58

Sri Lanka 94,�57 6�,576 -32,58� -34.60

Nepal �,8�8 495 -�,323 -72.79

Bhutan - - - -

Maldives 2,596 2,�87 -409 -�5.74

Myanmar 60,�79 �3�,757 7�,578 ��8.94

Sub-total �,894,478 2,695,4�0 800,932 42.28

Afghanistan 9� �73 82 90.47

Kazakhstan �,404 3,280 �,876 �33.62

Uzbekistan ��,2�8 8,832 -2,386 -2�.27

Turkmenistan 9� �2� 30 33.�5

Tajikistan 60 83 23 37.85

Kyrgyzstan �40 442 302 2�5.4�

Sub-total �3,004 �2,93� -73 -0.56

Total 1,907,482 2,708,341 800,859 41.99

Source: MPOB

Exports to Sri Lanka and Nepal dropped as anticipated, as Indian traders began importing directly from Malaysia following

removal of import duty at home. Palm oil was previously shipped via the two countries to take advantage of duty exemption

under the regional Free Trade Agreement.

33



Market Research on Product Ingredients, Lahore and Karachi (Jan 28-Feb 28)The three objectives were to identify major suppliers of products for the industrial frying sector; to get to know industrial users

and potential users of palm olein; and to assess the likely growth of the snack food industry in the next five years so as to

project the demand for palm olein. The snack food sector is shared by organised and non-organised players in the ratio of 75:25.

The market is estimated to be worth almost �.3 billion rupees. There are bright prospects for use of palm olein, especially with

strong awareness of its attributes.

Market Visit to Kazakhstan (June 2-6)The main purpose was to establish new contacts, strengthen relations with the oils and fats industry, and to explore the

possibility of conducting marketing activities, including the Programme for Rebuilding and Increasing Malaysia’s Exports.

Launch of Palm Olein-based Cooking Oil, Karachi

(Aug 5) MPOC provided Farooq Oil Industries a grant from the Programme for

Rebuilding and Increasing Malaysia’s Exports to launch Pakistan’s first

palm olein-based blended cooking oil. MPOC assisted in the brand

activation exercise, which received enthusiastic response from

consumers in Karachi and its surroundings. Soneri, a blend of Malaysian

palm olein and canola cooking oil, is the first oil to be made available in a wide range of consumer packs. Pakistan’s soft

oils market has shown promising growth in the last �0 years. The launch of Soneri cooking oil is the first step in introducing

Malaysian super olein in the consumer market.

pakistan

‘MPO Delightful Dining’ TV Cooking Show

(November 2008-March 2009)MPOC’s cooking show is aired every Friday at 4pm on Masala TV,

which has the highest ratings among cooking channels.


34 pakistan (cont’d)

Dawn ‘All about Lifestyles’ Exhibition, Karachi

(Dec�8-20) (Dec �8-20)

MPOC Pakistan has supported and benefited from the exhibition since

200�. A consumer survey was conducted to gauge awareness and

perceptions of palm oil as a premium liquid oil for cooking and frying.

Efforts were made to elevate the image of palm oil as an ingredient of

vanaspati, and to get leading cooking oil brands to endorse palm oil and

its role in their products.

35


india


Panacea Expo, Mumbai (Jan 30-Feb �)The biennial exhibition of natural products, services and ingredients attracted a large number of exhibitors representing the

food and beverage and personal care sectors. MPOC showcased palm-based products, disseminated information and presented

a paper on palm oil.

POTS Mumbai & Ministerial

Mission (May 29-30)A maiden project for MPOC in India, the event was

supported by 270 participants. Ten papers were

presented by international and local speakers,

covering global perspectives of the oils and fats

business, technical trends and new demands, and

price outlook and market direction.

In tandem with the event, YB Datuk Peter Chin Fah

Kui, the Minister of Plantations Industries and

Commodities, led a mission representing various companies and

associations. They included Sime Darby Plantation Sdn Bhd, IJM, Sawit

Kinabalu, PORAM, MPOC, Malaysian Palm Oil Board and Bursa

Malaysia.

Meetings were held with the Solvent Extractors Association of India and

the Minister of Agriculture, Consumer Affairs and Public Distribution.

Discussions centred on promoting collaboration with the Malaysian business community and issues related to trade barriers.

In-cosmetics India 2008, Mumbai (Sept �7-�8)MPOC participated in the exhibition on personal care and home-care ingredients, as well as organised a half-day seminar for

formulation chemists and manufacturers of such products. The objective was to increase awareness of palm-based oleochemical

applications and to boost the use of palm-based oleochemicals in formulations for cosmetics, soap, and personal care and

detergent products. Technical articles and journals were made available during the seminar, at which papers were presented.

More than 200 exhibitors took part in the event.


36


Showcase Malaysia 2008, Dhaka (March 20-22)Organised by the Bangladesh-Malaysia Chamber of Commerce and Industry in cooperation with Malaysia South-South

Association, the event enabled three local producers of palm olein-based brands to promote and market their products at the

MPOC pavilion. Information on the nutritional and beneficial attributes of palm oil was disseminated to visitors through a video

recording, leaflets, booklets and brochures.

National Cardiac Conference, Dhaka (April 25)MPOC Dhaka sponsored the conference for some 500 leading cardiologists and cardiac surgeons. A paper was delivered on

‘Edible Oils and Their Role in Prevention of Heart Disease’, highlighting the beneficial properties of palm oil in this regard.

‘The Monitor-Malaysian Palm Oil Chef of the Year’ Competition, Dhaka (Aug 6)MPOC Dhaka office signed a MoU with The Bangladesh Monitor to sponsor the competition as Title Sponsor for the

second time. The event was launched at a press conference on Aug �3 and the winner selected in November. The programme

was aimed at popularising Malaysian palm oil among end-users like home-makers and professional chefs.

Seminar on Palm Oil, Dhaka (Oct 28)A seminar on ‘Cardiac-friendly Edible Oil’ was jointly organised by MPOC, Ibrahim Cardiac Hospital and Research Institute

(ICHRI) and Ibrahim Medical College (IMC). There 300 participants comprised eminent cardiologists and medical doctors

from the ICHRI and the Bangladesh Institute of Research and Rehabilitation in Diabetes, Endocrine and Metabolic Disorder

Hospital, as well as professors and students of IMC. The seminar educated participants on the comparative advantages and

disadvantages of edible oils and their impact on cardiac health. In this respect, it was highlighted that palm oil has a positive

effect on cardiac health.

Scientific Seminar on Palm Oil, Dhaka (Oct 29)A scientific seminar on ‘Role of Edible Oil in Ischaemic Heart Disease’ was organised by MPOC and the Academic and Research

Cell of the Department of Cardiology, University Cardiac Centre, Bangabandhu Sheikh Mujib Medical University. About 350

medical professionals and students attended the seminar to obtain updated information and research findings on the role of

edible oils in preventing heart disease. The beneficial role of palm oil was emphasised in maintaining a healthy heart, either

used on its own in blends with other edible oils.

bangladesh

37


middle east

MARKET OVERVIEW

Oils and fats imports grew by 62�,007 tonnes (up by �4.5%), bringing the region’s total to 4.89 million tonnes. The volume of

soybean oil increased marginally to about �.6� million tonnes, while that of sunflower oil was significantly higher by �73,000

tonnes to record 252,000 tonnes.

Palm oil broke the dominance of soybean oil with a combined volume of 2.7 million tonnes from Malaysia and Indonesia.

This was driven by the competitive pricing of palm oil vis-à-vis soybean oil.

Table 9: Middle East – Oils and Fats Imports (‘000 tonnes)


PO - Malaysia �,446,303 �,903,4�0 457,�07 3�.6

PO - Indonesia� 888,000 885,000 -3,000 -0.3

SBO2 �,603,000 �,6�7,900 �4,900 0.9

SFO3 79,000 252,000 �73,000 2�9.0

Corn Oil4 26�,900 240,900 -2�,000 -8.0

Total 4,278,203 4,899,210 621,007 14.5

Sources: Oil World; MPOBNote:1YTD Imports for Jan-Aug only2YTD Imports from US (Jan-Nov); Argentina & Brazil (Jan-Dec) 3YTD Imports from Argentina (Jan-Oct) 4YTD Imports from US (Jan-Nov) & Brazil (Jan-Dec)

Malaysian palm oil made up �.9 million tonnes of overall imports, or 457,�07 tonnes (3�.6%) more than in 2007, due mainly to

overall growth in demand and lower intake from Indonesia.

Exports to the East of Suez sub-region were higher by 3�2,527 tonnes (29.5%) compared to �.06 million tonnes in 2007.

Higher offtake was recorded in Jordan and Iran, where imports increased to 376,77� tonnes and 259,5�� tonnes respectively.


38 middle east (cont’d)

Table 10: Middle East – Import of Malaysian Palm Oil by Country (tonnes)


East of Suez

Armenia 40 - - -

Azerbaijan - 38 38 -

Bahrain 986 �,�77 �9� �9.4

Georgia 6,8�8 235 -6,583 -96.6

Iran 23�,07� 259,5�� 28,440 �2.3

Iraq 677 �9,89� �9,2�4 2,838.�

Jordan 6,0�4 376,77� 370,757 6,�64.9

Kuwait �3,527 44,237 30,7�0 227.0

Oman 96,359 92,942 -3,4�7 -3.5

Qatar �08 �,�02 994 920.4

S Arabia 33,736 28,�2� -5,6�5 -�6.6

Turkey 20�,247 �29,396 -7�,85� -35.7

UAE 360,509 356,395 -4,��4 -�.�

Yemen �09,3�6 63,��9 -46,�97 -42.3

Sub-total �,060,408 �,372,935 3�2,527 29.5

West of Suez

Algeria 29,948 �3,769 -�6,�79 -54.0

Cyprus �,560 63� -929 -59.6

Djibouti 80,98� �04,�2� 23,�40 28.6

Egypt �84,588 347,558 �62,970 88.3

Eritrea � 356 355 -

Ethiopia 5,824 9,982 4,�58 7�.4

Lebanon 4,606 3,347 -�,259 -27.3

Libya 624 526 -98 -�5.7

Morocco 7,007 5,609 -�,398 -20.0

Somalia �6,398 20,933 4,535 27.7

Sudan �0,422 �,409 -9,0�3 -86.5

Syria 33,090 4,98� -28,�09 -84.9

Tunisia 9,544 �6,2�0 6,666 69.8

Sub-total 384,593 529,432 �44,839 37.7

Israel �,302 �,043 -259 -�9.9

Total in Region 1,446,303 1,903,410 457,107 31.6

Source: MPOB

39


middle east (cont’d)

In the West of Suez sub-region, Malaysia’s exports were higher by �44,839 tonnes (37.7%). In Egypt, Malaysian exports

recovered to 347,558 tonnes from �84,588 tonnes the previous year. Egypt has become an important re-export market in

cross-border trade with Sudan and Libya. As exports to Sudan have been affected by domestic financial and banking problems,

some Sudanese importers have resorted to cross-border trade with Egypt to bring in palm oil.

Djibouti’s imports of Malaysian palm oil grew by 28.6% for re-export to landlocked neighbours and countries in conflict such

as Ethiopia, Eritrea and Somalia. The local presence of key producer Sime Darby Plantation Sdn Bhd encouraged intake.


Women’s 3F Show, Dubai, UAE (Feb 2)About 500 women attended this unique exhibition on food, fitness and fashion. A series of lectures and a demonstration on

healthy cooking were held alongside the exhibition, in addition to a lively question-and-answer session for knowledge exchange.

MPOC provided information on the health and nutritional benefits of palm oil in everyday food products.

Lecture Series on Malaysian Palm Oil at Cairo University, Egypt (Feb ��) This was initiated with the Malaysia Studies Department to provide exposure on palm oil to 60 undergraduates and post-

graduate students from the Faculty of Economics and Business. The topics covered the techno-economics of palm oil, nutrition

and applications of palm oil.

Market Visit to Doha, Qatar (Feb ��-�4)The visit was to obtain information on the development of the oils and fats market from the perspective of local industry

players, especially in relation to patterns of demand for, and consumption of, palm oil.

�3th Gulf Food, Hotel Equipment and Salon Culinary Exhibition, Dubai, UAE

(Feb 24-27)MPOC Dubai has actively participated in this annual event to promote use of palm olein by major players in the food industry

and salon culinary line, and technology innovators in food preparation. Over 2,000 companies from more than 70 countries

showcased the latest in food and beverage products and services, as well as technology and developments in food preparation,

processing and packaging. MPOC joined the Malaysia Pavilion under the MATRADE umbrella.


40

5th Alexandria Conference on Food Science and Technology, Egypt (March 4-6)The conference was organised by the Faculty of Agriculture of Alexandria University to update participants on developments,

research and prospects of the Egyptian food industry. MPOC reviewed issues linked to the oil ration scheme in Egypt and

provided the latest information on prices of palm oil in comparison to other vegetable oils. The event enabled networking with

the scientific community.

Cairo International Trade Fair, Egypt (March �4-28) MATRADE set up a Malaysia Pavilion for �� exhibitors of food products. MPOC displayed palm oil products, shortening

and specialty fats as ingredients in food processing. The opportunity was taken to identify new users among oils and fats

manufacturers, importers and traders from the Middle East as a whole. The event was organised by the General Organisation for

International Exhibitions and Fairs under the auspices of Egypt’s Ministry of Trade and Industry.

OFI Middle East 2008, Abu Dhabi, UAE (April �5-�6)This annual event takes place in several countries each year, with UAE being among the venues in 2008. The programme features

technical and trade conferences alongside an exhibition. Most of the 34 exhibitors were from the Middle East. MPOC was able to

demonstrate various applications of palm oil and establish contacts with oils and fats manufacturers, producers, importers and

traders from the region.

Technical Seminar with National Research Centre,

Cairo, Egypt (April 22) MPOC co-organised the seminar on ‘Technical and Nutritional Aspects

of Palm Oil’ to provide updates on trans-fats issues, food applications

of palm oil and its nutritional properties. The 69 participants consisted of

nutritionists, researchers, lecturers and managers.


POTS Dubai, UAE (May 26-27)The trade fair and seminar by MPOC and MPOB was aimed

at enhancing the palm oil trade. With the theme ‘Exceeding

Expectations, Enriching Partnership’, the event included three seminar

sessions and three plenary lectures featuring �0 speakers. The trade

exhibition drew �4 exhibitors and seven sponsors from Malaysia and

the Middle East.

4�



Exporters-Importers Dialogue in Djibouti (2� May) and Addis Ababa (May 27), EthiopiaIn Djibouti, the event was intended to strengthen the palm oil business in the Horn of Africa countries – Djibouti, Ethiopia,

Eritrea and Somalia. About 40 key importers attended the dialogue to discuss specific trade issues related to palm oil imports

into Dijbouti and Ethiopia, and to secure business deals with Malaysian exporters of palm oil. MPOC presented a paper on

‘Sustainable Malaysian Palm Oil’ to provide insight into current efforts to achieve sustainability. In Addis Ababa, the event

attracted a selected group of vegetable oil importers and food Industry players.

Health and Food Seminar, Cairo, Egypt (Nov 7) MPOC participated in this seminar for women, organised by Kol-Woshkor Food Magazine to educate participants on the health

and nutritional benefits of palm oil. A paper entitled ‘Goodness of palm oil and quality frying and baking’ was delivered.

Halal World Expo 2008, Abu Dhabi, UAE (Nov ��-�4)This was the largest and most comprehensive exhibition for halal products and services in the Middle East. It gave the halal

industry community an international platform to interact and to exchange ideas, as well as to forge business relations and secure

business deals. MPOC participated for the second time, taking advantage of the increasing number of opportunities for the

marketing of halal products in the global market. Emphasis was given to the uses and health advantages of palm oil as a halal

ingredient for the food and non-food industries.


42 europe

MARKET OVERVIEW

EU-27 imports of five major oils and fats reached 8.85 million tonnes, declining by 0.3% year-on-year. The region’s import

demand is determined to a large extent by the prices of vegetable oils and crude mineral oil, as well as developments in the

bio-fuel policy. High prices of vegetable oils during the year in review affected demand from the bio-fuel sector, except where

supported by mandatory mixing regulations and mandates that had already been put in place.

Table 11: Europe – Oils and Fats Imports (‘000 tonnes)


PO 4,623 4,867 244 5.3

SBO 96� �,036 75 7.8

SFO �,354 �,�78 -�76 -�3.0

RSO 497 362 -�35 -27.2

Laurics �,44� �,4�0 -3� -2.2

Total 5 Major Oils 8,876 8,853 -23 -0.3

Source: Oil World

Demand for palm oil escalated to 4.86 million tonnes or higher by 244,000 tonnes due to its competitive price relative to other

vegetable oils. Soybean oil imports were up 75,000 tonnes, but sunflower oil imports went down to �.�7 million tonnes due to

high prices.

Table 12: Europe – Import of Malaysian Palm Oil (tonnes)


EU-27 2,06�,664 2,052,�40 -9,524 -0.46

Non-EU 354,452 6�6,297 26�,845 73.87

Total 2,416,116 2,668,437 252,321 10.44

Source: MPOB

43


europe (cont’d)

Malaysian palm oil imports by the EU stood at about 2.05 million tonnes, reflecting a marginal decrease of 0.46%. Higher

demand was recorded in non-EU countries, with exports to Russia and the Ukraine pegged at �25,026 tonnes and 483,955

tonnes respectively.

Table 13: Europe – Import of Malaysian Palm Oil by Selected Countries (tonnes)


Netherlands �,460,554 �,297,888 -�62,666 -��.�

Sweden �43,963 ��5,045 -28,9�8 -20.�

Germany 24,890 ��8,553 93,663 376.3

Italy �20,660 �53,68� 33,02� 27.4

Denmark �27,936 �26,3�8 -�,6�8 -�.3

Spain ��6,07� �45,502 29,43� 25.4

UK 26,024 40,�75 �4,�5� 54.4

Russia �82,578 �25,026 -57,552 -3�.5

Ukraine �64,458 483,955 3�9,497 �94.3

Others 48,982 62,293 �3,3�� 27.2

Total in Region 2,416,116 2,668,437 252,321 10.4

Source: MPOB

CPO continues to be the main product imported by the EU, accounting for nearly 53% of the total. But at �.08 million tonnes,

the volume was 98,�80 tonnes less than in 2007. The Netherlands absorbed �.0� million tonnes, but this was �2.34% lower

than the �.�5 million tonnes recorded the previous year.

Table 14: EU-27 – Import of Palm Oil by Product (tonnes)


CPO/CPL/CPS �,�83,746 �,085,566 -98,�80 -8.29

RBD Palm Oil ��6,589 77,996 -38,593 -33.�0

RBD PS 2��,79� 256,599 44,808 2�.�6

RBD PL �87,8�4 232,5�4 44,700 23.80

PFAD/PAO �92,453 257,753 65,299 33.93

Others �69,27� �4�,7�2 -27,559 -�6.28

Total 2,061,664 2,052,140 -9,524 -0.46

Source: MPOB


44


Market Visit to Poland (Feb ��-�4)Following the accession of Poland into the EU, it was necessary to review developments in the oils and fats market. As such,

the visit focused on prospects for palm oil and examined the impact of bio-fuel development on the oilseeds sector.

Workshop on ‘Sustainability Criteria for Bio-fuels’, Brussels, Belgium (March 4)This was organised at the European Parliament under the chairmanship of MEP rapporteur Ms Dorette Corbey. The main purpose

was to provide a platform for interested stakeholders to voice their opinions and suggestions on the sustainability criteria.

The decision to include the sustainability criteria for bio-fuels in the revised Fuel Quality Directive was made by the Committee

of Permanent Representatives in February. The relevant environmental agencies, NGOs and private consultants presented their

views on greenhouse gas savings, land-use change, biodiversity and social issues. Several European Members of Parliament

also attended the workshop.

World Bio-fuels Congress, Brussels, Belgium (March �2-�4)The conference looked at ways to ensure sustainability criteria for bio-fuel production and the implementation of certification

schemes. Attention was also given to the potential adverse impact of the criteria on the environment.

Dialogue with the German and Sweden Permanent Representation in the EU

(March �7-�8); & with the Slovenian Presidency and Dutch Permanent Representation

(March 26-28), Brussels, BelgiumMPOC Brussels held a series of meetings with members of the newly-created Ad-hoc Working Group. With sustainability

criteria and greenhouse gas calculations for bio-fuels becoming politically sensitive, this body was specially set up by EU

Member-States in February to elaborate on the criteria, for use in both the Renewable Energy and Fuel Quality Directives.

Key messages on palm oil were delivered during the meetings with representatives of the Slovenian EU Presidency, as well

as German, Dutch and Swedish Permanent Representations to the EU.

Dialogue with the President of the Ad-hoc Working Group, Brussels, Belgium (April �7)The meeting with the Slovenian Presidency was coordinated by the Brazilian Embassy in Brussels. Representatives of Malaysia,

Argentina, Indonesia, Mexico, South Africa, Malawi, Mozambique and Thailand attended the dialogue to express their views

and concerns on development of the sustainability criteria.

europe (cont’d)

45


europe (cont’d)

Group Meeting with European Commission Officials and Representatives of the Joint Research Council, Brussels, Belgium (May 6)The meeting provided the opportunity to discuss related issues with key officials responsible for the development of

methodologies and gathering of data for greenhouse gas (GHG) savings from various feedstocks, as displayed in Annex VII of

the draft Renewable Energies Directive. This technical issue is very important to countries like Malaysia because GHG emission

reductions are generally one of the main comparative advantages of the bio-fuels produced. However, this advantage can be

significantly diminished if inappropriate data or methodologies are employed.

�3th International Peat Congress, Tullamore, Ireland (June 8-�3) A special session at the congress was devoted to tropical peatlands. MPOC was effective in addressing concerns about the

impact of oil palm cultivation in such areas. Contacts were made with peat soil scientists and various follow-up actions have

since been initiated.

Ministerial Mission to The Hague, Brussels and London (Sept 7-�5) MPOC and the Malaysian Timber Council (MTC) co-organised this

mission to address palm oil sustainability and timber issues in Europe.

The mission on palm oil was aimed at reaffirming Malaysia’s high-level

political commitment to sustainability and continued engagement in

Europe. It also served as a reminder to European decision makers that

Malaysia is closely monitoring the sustainability issues and that a lot

is at stake for third-country producers. The timing was carefully chosen to coincide with full-blown political bargaining among

EU Member-States, Parliamentarians and the European Commission over the EU’s renewable energy and bio-fuel proposals.

The Malaysian delegates led by YB Datuk Peter Chin Fah Kui, the Minister of Plantation Industries and Commodities, consisted

of Members of Parliament, captains of industry, Ministry officials, Malaysian Palm Oil Board, Malaysian Palm Oil Association,

Malaysian Bio-diesel Board, Malaysian Timber Board, Malaysian Timber Certification Council, Sarawak Land Consolidation and

Rehabilitation Authority, Forestry Department of Sarawak, MTC and MPOC. A journalist was invited to provide coverage.

Meetings were held with key policy makers representing the

Netherlands, European Parliament, EU Commission and UK Parliament.

These allowed all parties to update each other and share their views on

sustainability of palm oil, bio-fuels and food security.

The mission concluded with a World Sustainable Palm Oil Conference,

organised by the Asian Strategy and Leadership Institute, in London.

YB Datuk Peter Chin Fah Kui and HE Dr Anton Apriyantono, Minister

of Agriculture, Indonesia, presented the keynote addresses and jointly

fielded questions from the floor. A roundtable discussion on sustainable

palm oil was also held.


46

Meeting with Palm Oil Stakeholders, Rotterdam, The Netherlands (Oct 22)The meeting was held in Nootdorp for representatives of Greenpeace, Unilever and other major stakeholders in the palm oil

sector. It provided an update on the proposed moratorium on palm oil and on the outcome of the meeting hosted by Unilever in

London on Oct 8. Participants suggested that that the current Principles and Criteria of the Roundtable on Sustainable Palm Oil

be strengthened to tackle issues of deforestation, rather than introduce a new requirement as was suggested by Greenpeace.

6th International Bio-fuels Conference, Berlin, Germany (Dec �-2)Current issues in the development of biogenic fuels in Germany and Europe were discussed together with future framework

conditions for bio-fuels. Evidence was provided that bio-fuels are not in competition with food production, while measures were

examined on achieving environmentally friendly and sustainable bio-fuel production.

Dialogue Session with German Members of Parliament, Berlin (Dec 3)The dialogue with MP Dr Christel Happach-Kasan of the Free Democratic Party and MP Dr Joachim Pfeiffer of the Christian

Democratic Union addressed issues arising from amendments to the draft legislation on promotion of bio-fuels, adopted by

the German government on Oct 22. The Bill will go through the parliamentary ratification process and could come into force

as early as February 2009. It focuses on a lower national bio-fuel quota of 5.25% for 2009 instead of 6.25%, as originally

planned. More significantly, it stipulates that bio-fuels from palm oil and soybean oil will have to prove their compatibility

with sustainability requirements in order to count towards the target and receive preferential tax treatment.

europe (cont’d)

47


africa

MARKET OVERVIEW

Countries in this region added to their oils and fats intake by 9.5%, with a volume of 2.67 million tonnes compared to 2.44

million tonnes in 2007. Palm oil contributed �.88 million tonnes (up by 4.37%). Soybean oil imports were recorded at 765,000

tonnes and tallow at 24,800 tonnes, both showing a drop in volume.

Table 15: Africa – Oils and Fats Imports (‘000 tonnes)


PO - Malaysia �,248.50 �,260.30 ��.8 0.9

PO - Indonesia� 484.6 530.� 45.5 9.4

PO - Singapore2 70.6 92.2 2�.6 30.6

SBO2 6�4.7 765 �50.3 24.5

Tallow3 22.7 24.8 2.� 9.3

Total 2,441 2,672 231.3 9.5

Sources: Oil World; MPOB Note: 1 Monthly data – Indonesia (Jan-Aug)2 Argentina (Jan-Dec 2008), Brazil ( Jan-Dec2008), US (Jan-Nov 2008), France (Jan-March 2008), Spain (Jan-June 2008)3 Monthly data – Australia (Jan-Nov 2008), US (Jan-Feb 2008)

Malaysia’s palm oil exports stood at �.26 million tonnes, higher by ��,847 tonnes (0.9%). Trade was conducted through a

handful of countries which also serve as re-distribution hubs for neighbouring and landlocked countries. For example, South

Africa is the main entry point for southern Africa, while Tanzania and Kenya serve East Africa, and Benin and Togo are the

gateways to West Africa.

Countries in West Africa increased imports from Malaysia, with the volume growing to 766,��2 tonnes from 6�5,777 tonnes,

or up by �50,335 tonnes (24.4%). This offset the declines recorded in southern and East Africa. South Africa’s imports of

Malaysian palm oil dropped by 89,857 tonnes (36.4%) to �56,950 tonnes, as the country took advantage of competition in

the trade.


48

Table 16: Africa – Import of Malaysian Palm Oil by Country (tonnes)


South Africa 246,807 �56,950 -89,857 -36.4

Togo �0�,944 �06,023 4,079 4.0

Ghana �06,034 ��4,�62 8,�28 7.7

Gambia 33,�48 2�,993 -��,�55 -33.7

Mauritania 53,855 64,994 ��,�39 20.7

Tanzania �46,49� �33,789 -�2,702 -8.7

Mozambique 38,358 56,088 �7,730 46.2

Benin 25�,596 343,578 9�,982 36.6

Angola 37,508 36,5�6 -992 -2.6

Kenya 95,254 54,332 -40,922 -43.0

Senegal 9,000 8,950 -50 -0.6

Nigeria �,099 �4,335 �3,236 �,204.4

Congo 39,842 36,386 -3,456 -8.7

Mauritius �0,789 8,923 -�,866 -�7.3

Others 76,742 �03,295 26,553 34.6

Total in Region 1,248,467 1,260,314 11,847 0.9

Source: MPOB

Palm olein and cooking oil made up about 65% of the Malaysian palm oil imports. The volume of RBD palm oil rose sharply

by �23,258 tonnes to stand at �27,047 tonnes, at the expense of cooking oil products. The higher volume was attributed to

substitution with RBD palm oil because of the high price of cooking oil.

Table 17: Africa – Import of Malaysian Palm Oil by Product (tonnes)


CPO/CPL/CPS �67,992 �56,943 -��,049 -6.58

RBD PO 3,789 �27,047 �23,258 3253.05

RBD PL 626,273 6�3,653 -�2,620 -2.02

RBD PS 75,735 42,563 -33,�72 -43.80

CO & DFPL/Super Olein 256,785 207,297 -49,488 -�9.27

PFAD 96,983 97,3�� 328 0.34

Others 20,9�0 �5,500 -5,4�0 -25.87

Total 1,248,467 1,260,314 11,847 0.95

Source: MPOB

africa (cont’d)

49


africa (cont’d)


Red Palm Oil Muffin Project, Cape Town, South AfricaIn the first half of the year, MPOC coordinated the setting up of a bakery in Mitchelle’s Plain, Cape Town. In the last quarter,

another bakery was set up in Natest Primary School. The ongoing programme contributes to increasing awareness of the

nutritional benefits of red palm oil; overcoming Vitamin A and micronutrient deficiency among school children; and promoting

wider use of red palm oil.

The Sunday Times Food Show, Johannesburg,

South Africa (July 3-6) MPOC Africa participated for the first time in the exhibition, which

attracted visitors from other African countries such as Ghana, Liberia

and Mozambique. Business meetings were also held with companies

based in Johannesburg to discuss their participation in MPOC’s Palm Oil

Trade Fair and Seminar, to be held in Ghana in 20�0.

Market Visit to Ghana, Togo and Benin (July �0-24)In addition to capturing the latest market information, MPOC continued its efforts to expand marketing opportunities for

Malaysian palm oil in West Africa and to widen contacts with members of the oil and fats industry. The visit further enabled

preparatory work for the Palm Oil Trade Fair and Seminar in Ghana next year.

Meeting on Investing in Oil Palm Plantations, Lusaka, Zambia (Aug 5-8)The Zambia Investment Centre and Ministry of Commerce and Industry have extended an invitation to Malaysia to invest in the

country. At the request of MATRADE and Office of the Deputy Prime Minister of Malaysia, MPOC participated in the meeting to

explore opportunities for investment in oil palm plantations. MPOC also tapped into networking opportunities with oils and fats

industry players.

Visit to SIAL Exhibition Paris, France (Oct �9-23)A visit was made during the exhibition to establish contacts with major palm oil buyers and oils and fats industry members,

particularly those from West Africa. They were from Nigeria, Togo, Benin, Ghana, Senegal, Mali, Niger, Cote d’Ivoire, Guinea,

Gabon, Cameron and Liberia. MPOC promoted the Ghana leg of the Palm Oil Trade Fair and Seminar and provided information

on the oil palm plantation investment.


50 americas

MARKET OVERVIEW

The 3.84 million tonnes of oils and fats imported reflected an increase of 568,000 tonnes (�7.4%) for the comparative period.

Palm oil was the region’s dominant product at �.32 million tonnes, higher by 229,000 tonnes or 2�%. Soybean oil was next with

�.�� million tonnes.

Table 18: Americas – Oils and Fats Imports (‘000 tonnes)


SBO� 957 �,�� 54 �6.�

SFO2 66 34 -32 -48.5

RSO3 82� �,082 26� 3�.8

PO4 �,093 �,322 229 2�.0

PKO4 336 292 -44 -�3.�

Total 5 Major Oils 3,273 3,841 568 17.4

Source: Oil WorldNote: 1 Refers to Mexico, Colombia, Peru & Venezuela 2 Refers to Mexico only 3 Refers to US, Canada & Mexico only 4 Refers to US & Mexico only

Overall, the region imported about �.�9 million tonnes of Malaysian palm oil, an improvement of 268,355 tonnes (29.�%) over

the previous year.

Table 19: Americas – Import of Malaysian Palm Oil (tonnes)


US 794,920 �,047,668 252,748 3�.8

Latin America 93,986 ��,784 �7,798 �8.9

Canada 32,502 30,3�� -2,�9� -7.2

Total in Region 921,408 1,189,763 268,355 29.1

Source: MPOB

The US was the region’s biggest importer of palm oil from all sources with �.�� million tonnes, higher by 269,948 tonnes

(3�.92%). Malaysia remained the leading supplier to the US, commanding more than 90% of the market share. Compulsory

labelling of trans-fatty acid content in food products has pulled palm oil back into the market as manufacturers and food-service

providers seek out an alternative to partially hydrogenated oils.

Table 20: US – Palm Oil Imports (tonnes)


Malaysia 794,920 �,047,668 252,748 3�.80

Indonesia� 50,700 67,900 �7,200 33.93

Total 845,620 1,115,568 269,948 31.92Sources: Oil World; MPOB 1Jan-Aug only

5�


The main products imported by the US were RBD palm oil (343,047 tonnes), and RBD palm olein (329,528 tonnes), which

constituted 64% of total imports of palm oil from Malaysia. Other popular products were RBD palm stearin and PFAD.

Table 21: US – Import of Palm Oil By Product (tonnes)


RBD PO 302,�92 343,047 40,855 �3.52

RBD PL 205,508 329,528 �24,020 60.35

RBD PS �79,085 262,724 83,639 46.70

PFAD �00,764 �0�,222 459 0.46

Others 7,37� ��,�47 3,776 5�.22

Total 794,920 1,047,668 252,748 31.80

Source: MPOB


National Bio-diesel Conference & Expo 2008, Florida, US (Feb 3-6) Held in Orlando, the main objective of MPOC’s participation was to keep abreast of technical developments, policies and

regulations, and market details on the bio-diesel industry in the US. MPOC highlighted the relevance of palm oil to the bio-

fuel industry, which gained much attention. Companies like Green Earth Bio-fuels and Imperium Renewables were solid in

their support for palm oil. The National Biodiesel Board expert panel drove home the point that additional feedstock will help

ameliorate the ‘food versus fuel’ debate and that it is important for the industry to educate the media and consumers about the

real reasons for higher food prices.

USDA Outlook Forum 2008, Texas, US (Feb 2�-22)The forum, held in Arlington, highlighted the changing oilseeds/oils dynamics, global issues, new products and the US

economy, which may have an impact on the agricultural outlook for the year.

International Restaurant Show, Nevada, US (Feb 24-27)The event, held in conjunction with the Chef Culinary Challenge, presented an opportunity to promote the use of palm oil by

the restaurant sector, as well as the food and baking industries. More states in the US are coming under pressure to adopt

regulations on declaring the content of trans-fatty acids in food products. This has created a niche for the marketing of

trans-free palm oil.

americas (cont’d)


52

Working Visit to Oregon and Hawaii (March �-�4) & NIOP Annual Convention, Louisiana

(March 9-�2)The working visit led by the Secretary-General of the Ministry of Plantation Industries and Commodities was the focal point

in removing discriminatory language on palm in the House Bill (HB) 22�0. Expert testimony by members of the Malaysian

delegation changed the views of state and city agency leaders in Oregon. Additionally, environmental groups that had previously

opposed palm oil based on apocryphal ‘evidence’ have since dropped their opposition to Malaysian palm oil. Significant

progress is now being made towards removing discriminatory laws against palm oil, through discussions with lawmakers.

In Hawaii, the delegation met the Department of Business and Economic Development and Tourism DBEDT – a government arm

that sets out policies towards renewable energy. They expressed support for the use of palm oil but emphasised the need for

sustainable and certified production. They proposed energy solutions tied to sustainability concerns, and included provisions to

certify use of palm oil that is declared to be sustainably produced.

The delegation then participated in the NIOP conference. MPOC CEO Tan Sri Dr Yusof Basiron outlined developments in, and

the market outlook for, palm oil. Also addressed were issues relating to the ‘food versus fuel’ debate, including productivity

techniques, new technology and the need to develop food-based agriculture in developing countries.

State Department Dialogue on Sustainable Palm Oil, Washington, US (May 2) The dialogue on ‘Palm Oil – Opportunities for Environmental Sustainability and Corporate Social Responsibility’ briefed

participants on ways to achieve sustainable production of palm oil. They represented companies, conservation organisations,

consumer product firms and academia, among others. Malaysia’s brief was on the palm oil industry and current developments,

role of the Government, and solutions to environmental issues including the work of the Roundtable on Sustainable Palm Oil.

NW Bio-diesel Forum, Washington, US (May 4)This was held in Seattle for more than 200 participants, mainly in the bio-diesel sector. MPOC presented a paper on ‘Sustainable

Malaysian Palm Oil’, giving an insight into Malaysia’s moves to achieve sustainability in palm oil production, as well as its

leading role in related research and development. MPOC participated in the mini expo held in conjunction with the forum.

Visit to CARB and Energy Commission, California, US (May �2-�3)A series of meetings was held with the California Energy Commission (CEC) and California Air Resources Board in Sacramento.

Both state agencies are frontrunners in determining the use of renewable fuels including bio-diesel. The visit enabled the

Malaysian palm oil industry to highlight its sustainable practices, and to express its concerns over the sweeping assertion that

production of palm oil raises environmental and sustainability issues.

California’s Low Carbon Fuel Standard (LCFS) was announced through Executive Order S-�-07 on Jan �8, 2007. The LCFS

creates a state-wide goal of reducing the carbon intensity of transportation fuel by �0% by 2020. CEC is seeking to set

sustainability standards and a roadmap to complement LCFS.

americas (cont’d)

53


americas (cont’d)

Roundtable Discussion on Stearic Acid, Washington, US (May �6)The dialogue was convened with scientists in Seattle to discuss the move to label stearic acid for cholesterol metabolism.

This is of special concern to palm oil. The discussion with a panel of independent experts on stearic acid was to share unbiased

views on the neutrality of palm oil in cholesterol metabolism. The technical deliberations were attended by MPOC Deputy CEO

Dr Kalyana Sundram, Dr KC Hayes, Dr Pramod Khosla, Rein Archer and Dr T Thiagarajan.

International Oilseed Producers Dialogue (IOPD XI) (June �3-�4) The IOPD aims to develop and promote a sound business environment that allows oilseed producers to obtain viable returns.

Held in Berlin this time around, the dialogue was organised by the Union for the Promotion of Oil and Protein Plants of

Germany. At the meeting, Malaysia’s initiatives to achieve sustainable standards were highlighted, together with information

on the launch of the certification scheme by the Roundtable on Sustainable Palm Oil.

Fispal 2008 Food Fair & MPOC Palm Oil Symposium, Sao Paulo, Brazil (June 23-26)This biggest food exposition in Latin America once again provided an opportunity to promote the use of palm oil in bio-diesel

production. MPOC promoted several food products under its current educational theme, ‘Palm oil for global market food and

fuel solutions’.

The symposium in Menaus was co-organised with Braspalma and FELDA. The 80 participants discussed agronomy-related

matters and potential to develop oil palm plantations in Brazil. MPOC Deputy CEO Dr Kalyana Sundram spoke on the nutritional

properties of palm oil and environmental aspects of the oil palm industry.

IFT Annual Meeting, California, US (June 28-July 2)The theme of IFT 2008 was ‘Driving Growth and Sustainability through Innovation’. MPOB and IOI Loders Croklaan took part in

the exhibition to promote palm oil, while Hill & Knowlton collaborated with IOI in conducting a symposium on ‘New Paradigm

for Saturated Fats’. Three reputable speakers addressed issues of dietary saturated fats as part of a healthy diet; public policy

issues on dietary fats; and the role of the Food and Drugs Administration. Writer Gary Taubes spoke on good calories and bad

calories.

ADA Meeting & Expo 2008, Illinois, US (Oct 26-28)Held in Chicago, this event was targeted at dieticians. Information was delivered on the sustainability of palm oil production,

with the key message that it is also trans-free and nutritious.


54 domestic promotions

MPOC was involved in a varied range of programmes to promote the attributes of palm oil

to specific target groups in Malaysia. This included participation in exhibitions, seminars

and conferences organised by MPOC itself or in collaboration with other organisations.

Red Palm Oil Feeding Programme, Miri (January) MPOC collaborated with the Ministry of Health on a community-based project known as the Red Palm Oil Feeding Programme.

It is aimed at addressing energy and micronutrient malnutrition among Penan children in Sarawak. The current project is being

implemented in several districts around Miri. It spans �2 months, during which the nutritional status of the children and

their families is monitored. The programme, which began in 2007, is expected to be completed in 2009.

Palm Oil Promotions Programme, Miri (Jan 26)MPOC once again collaborated with the Ladies Division of the Sarawak United People’s Party in a palm oil promotion

programme for party-members and the public. The highlight was a cooking demonstration by celebrity chef Florence Tan.

Participants were enlightened on the health properties of Vitamin E tocotrienols and beta-carotenes in palm oil. Tips on cooking

and advantages of using palm oil were also shared with participants, several of whom said they have become more confident

about using palm oil.

MPOC-UMS Seminar on Palm Oil, Kota Kinabalu (Jan �8) MPOC co-organised a seminar with the School of Food Science and Nutrition of Universiti Malaysia Sabah (UMS). Based

on the theme ‘Food applications and nutritional attributes of palm oil’, it was aimed at disseminating scientific information

on food applications and nutritional attributes of palm oil to undergraduates. The seminar was particularly useful in that it

helped educate future food technologists/scientists and nutritionists.

Seminar on ‘Life Cycle Assessment (LCA) for Industry and Business Sustainability’,

Subang Jaya (Jan 22) MPOC attended the one-day seminar, organised by SIRIM to educate the business sector on applying LCA toward industry and

business sustainability. Close to �00 stakeholders from various sectors attended the seminar. A presentation by the Malaysian

Palm Oil Association addressed the role of LCA in measuring the palm oil industry’s carbon balance. Support is also being

provided to SIRIM in completing a LCA Project for the palm oil sector.

55


domestic promotions (cont’d)

Ekspo Komoditi 2008, Miri (Feb 22-29)MPOC participated in the event together with the Malaysian Palm Oil

Board, under the purview of the Ministry of Plantation Industries and

Commodities. This eight-day event was aimed at creating public awareness

on the Ministry’s roles and activities. MPOC took part in the exhibition,

and held cooking demonstrations as well as a ‘Biggest Oil Palm Fruit

Bunch’ competition.

MPOC explained its role and functions, and highlighted the

value of palm oil in both food and non-food products. Celebrity

chef Florence Tan led a cooking demonstration, which proved

to be a major draw. She shared cooking tips and explained

the benefits of palm oil in food applications. The contest to find

the biggest oil palm fruit bunch attracted participation from

major plantation companies and smallholders. Winners were awarded

cash prizes and certificates.

Palm Oil Price Outlook Conference & Exhibition, Kuala Lumpur (Feb 25-27) MPOC’s participation in the exhibition highlighted industry efforts to

address sustainability issues and provided conference participants

with information on palm oil and industry contacts. MPOC released

its new corporate video, ‘Malaysia Palm Oil: The Golden Discovery’. The

7-minute clip highlights the economic, social and environmental

advantages of oil palm cultivation as well as nutritional benefits of palm

oil. MPOC received many inquiries about the video and its latest

directory on suppliers of palm oil products.

The conference was launched by YBhg Datu Dr Michael Dosim Lunjew, Secretary-General of the Ministry of the Plantation

Industries and Commodities. It attracted about �,400 local and international participants.

Medical Seminar on ‘Controversies and Myths on Fats/Oils Nutrition’, Kuala Lumpur (Feb 29)As part of its continuing education programme for medical practitioners, MPOC co-organised a seminar with the Malaysian

Medical Association (MMA) chapters of Selangor and Kuala Lumpur. The lectures focused on dietary palm oil in relation to

cardiovascular health, palm-based minor constituents and various food applications. The programme succeeded in updating

the medical professionals on developments relating to oils and fats nutrition, particularly palm oil. It attracted �27 MMA

members and other health professionals. This is a key target-group as medical and health professionals are regarded as

shapers of opinion and agents of change in health matters.


56

Programme Timbalan Perdana Menteri Bersama

Perkebun Kecil dan Pekerja Ladang dalam

Menjayakan Tanggungjawab Sosial dan Korporat,

Shah Alam (March 6)MPOC participated in the exhibition held in conjunction with the launch

of the Corporate Social Responsibility (CSR) programme for oil palm

plantation companies. This event was organised by the MPOB to record

appreciation to smallholders and plantation workers for their contributions to the palm oil industry, which had generated

RM45.� billion in revenue in 2007 and placed palm oil among the prime movers of the economy.

MPOC’s participation was intended to educate smallholders and plantation workers on issues of sustainability in palm oil and

its contributions to the environment. In addition to posters, the display included food and non-food products to show the

versatility of palm oil applications.

The highlight was the launch of the CSR Project by Deputy Prime Minister YAB

Datuk Seri Najib Abdul Razak, and presentation of the Anugerah Ladang Prihatin

and Anugerah Pekebun Kecil Cemerlang awards.

International Symposium on ‘Peat Swamp Forests – Towards enhancement of knowledge-

based decision making in the conservation and management of natural resources’,

Kuala Lumpur (March ��-�2)MPOC was invited to share its experiences derived from devising an Integrated Management Plan for Peat Swamp Forests

(PSFs) in three demonstration sites in Pahang, Sabah and Sarawak respectively. The event was hosted by the Ministry of

Natural Resources and Environment and officiated by its secretary-general. The symposium strived to enhance awareness on

the role of PSFs which not only harbour rich biodiversity, but also store carbon in the form of biomass and peat soils.

The discussions examined issues of carbon depth, peat depth and peat classification. Guidelines will be drawn up for state

governments, based on presentations and feedback at the symposium. This is to ensure better conservation and sustainable

use of PSFs.


57


International Conference on Palm

Oil Sustainability, Kota Kinabalu

(April �3-�5)Officiated by YB Datuk Peter Chin Fah

Kui, the Minister of Plantation Industries

and Commodities, this was the first

sustainability conference organised by MPOC. It

attracted 550 local and international participants

and 23 organisations that displayed products and

services at the parallel exhibition. Over the five

sessions, 2� papers were presented.

The opening ceremony covered three major

undertakings by MPOC:

i. Official Launch of the Malaysian Palm Oil Wildlife Conservation Fund (MPOWCF)

ii. Signing of a MoU between MPOC, Borneo Conservation Trust and Bursa Malaysia

iii. Launch of a video entitled ‘Malaysia Palm: Golden Oil from Green Agriculture’

The MoU was to fund a project to survey the orang utan population in

Sabah. It was signed by:

• YABhg Tun Mohamed Dzaiddin Haji Abdullah, Chairman of Bursa

Malaysia

• YBhg Tan Sri Datuk Richard Allen Lind, Chairman of Borneo

Conservation Trust

• YBhg Tan Sri Datuk Dr Yusof Basiron, CEO of MPOC

An exhibition was also held to promote the industry’s efforts in

sustainable production of palm oil and to showcase its main products. Solutions for sustainable production of vegetable oils,

in particular palm oil, were also on display. MPOC highlighted messages on sustainability of Malaysian palm oil, while

exhibiting several top brands of local and international palm products.

MPOC responded to inquiries, such as the difference between red palm oil

and palm olein; Tenera and its parental species and advantages of Tenera;

how to increase fresh fruit bunches and oil yield; and the role of MPOWCF

and application procedures for funding.



58

Malaysia International Halal Showcase, Kuala

Lumpur (May 7-��)This is the biggest specialised trade fair of its kind in the region.

MPOC participated for the second consecutive year. The event,

organised by MATRADE, was officiated by YAB Dato’ Seri Abdullah

Ahmad Badawi, the Prime Minister of Malaysia.

A survey was carried out to gauge visitors’ awareness of palm oil.

Off the 640 respondents:

• 85% know that palm oil is a vegetable oil

• 93% believe that palm oil is cholesterol-free

• 97% know that palm oil is rich in Vitamin E and red palm oil

is rich in pro-Vitamin A

• 95% believe that palm oil is good for health

• 82% know that palm oil has a balanced composition of

unsaturated and saturated fatty acids

• 97% use palm oil in cooking

The survey also gauged awareness of MPOC’s roles and activities.

About 75% of the respondents said they had learnt about

MPOC from various sources, in particular articles in Berita Sawit and

the Jom Masak Bersama Seri Murni TV cooking programme.


59


48th National Annual General Meeting & Scientific

Meeting of the Malaysian Medical Association,

Kuching (May 29-3�)MPOC sponsored a lunch symposium for 80 doctors at this national

annual meeting. Updates were provided on dietary fats, with special

emphasis on trans-fatty acids. The event proved to be an excellent

platform to enable better understanding of dietary palm oil as a healthy

alternative to products containing trans-fatty acids.

International Workshop on ‘Conservation of the Bornean Elephant in Sabah’,

Kota Kinabalu (May 2�-23)MPOC was invited to attend the workshop which was organised by the Sabah Wildlife Department, with the assistance of WWF

Malaysia, Cardiff University, Universiti Malaysia Sabah and the NGO known as HUTAN. Among the �00 participants were

officials of government agencies, academicians, environmentalists, affected communities and industry players including palm

oil plantation companies. The objective was to generate a State Action and Management Plan to conserve the pygmy elephant

population in the state. The workshop identified four Managed Elephant Ranges to be set up in Sabah to provide pygmy

elephants with better protection. It also proposed that stakeholders, including from the oil palm industry, should work closely

to conserve the species.

REACH Meeting with MIDA, Kuala Lumpur (June �9)The meeting discussed such topics as the REACH Regulations, pre-registration and registration requirements, Material Safety

Data Sheet, Chemical Safety Report and Chemical Safety Assessment.

5th Malaysian Conference & Exhibition on Anti-

aging and Aesthetic Medicine, Kuala Lumpur

(May �7-�9)MPOC sponsored a booth at this annual conference. Carotino Sdn Bhd

and Hovid Bhd participated in the exhibition to promote their palm-based

products. MPOC disseminated information on the nutritional attributes

of palm oil, with special focus on minor constituents.



60

9th Malaysia International Food and Beverage

Trade Fair, Kuala Lumpur (July �0-�2)This was organised concurrently with the 4th International Agro-Bio

Business Conference. Officiated by YB Dato’ Mustapa Mohamed, Minister

of Agriculture & Agro-Based Industry, the event was one of the major

trade fairs on the domestic calendar.

MMVitaoils Sdn Bhd joined MPOC at its exhibition booth to respond

to inquiries on price and palm-based product specifications. Cooking

demonstrations received positive response from visitors. Inquiries were received on the palm products displayed – especially

red palm oil and double fractionated olein – as well as on local distributors and manufacturers.

3rd International Conference on Animal Nutrition, Bangi (July 29-3�) This discussed domestic feed production and substitution, feed safety, feeding strategies, new feed processing technologies

and enzymes supplementation. The importance of energy, protein, and mineral supplementation was also highlighted.

Malaysia Agriculture, Horticulture and Agrotourism Show, Serdang (Aug ��-23)The biennial event promotes diversification in agriculture and related business opportunities. It drew about �.2 million

visitors.

MPOC participated under the Ministry of Plantation Industries and Commodities’ pavilion to promote palm oil and to provide

links to industry players. Three cooking demonstrations showed how a variety of dishes can be prepared with palm oil and red

palm oil. The chefs talked about the goodness of palm oil and its benefits in food.

More than 5,000 visitors visited MPOC’s booth over the �3 days. Inquiries were received about palm bio-diesel, agronomy of

oil palm, uses of empty fruit bunches, nutritional facts about palm oil, uses of oil palm waste, and comparison of the attributes

of palm olein and olive oil.

International Symposium & Workshop on Tropical Peatland, Kuching (Aug �9-22)Organised by Universiti Malaysia Sarawak, MARDI, Carbopeat and the International Peat Society, the symposium gave MPOC

a speaking slot and an opportunity to correct misconceptions on planting oil palm on peat soil.


6�


2nd International Palm Oil Trade Fair & Seminar 2008 (POTS 2008), Kuala Lumpur

(Aug 24-26)

The event, themed ‘Changing Marketing Landscape – Challenges for Business Sustainability’ was timely, given that the

global market was then facing high prices of crude oil and essential food commodities.

Officiated by YB Datuk Peter Chin Fah Kui, the Minister of Plantation Industries and Commodities, the event allowed the

oils and fats industry to obtain updates on key market trends and to discuss global issues. The tally of 535 participants was

60% more than at the inaugural event in 2006.

They included conference delegates, exhibitors,

sponsors, invited guests, government officials

and media representatives.

The trade exhibition integrated with the seminar provided a good opportunity for Malaysian companies to showcase their

products and services, and to interact with those seeking business ventures. Fifteen companies participated, occupying 28

booths. MPOC’s booth was a one-stop information centre for posters, products and videos on palm oil.

Most exhibitors said they had generated contacts for business opportunities and that the exhibition had created publicity

for their products and services. One company even concluded a supply contract. Seventy-one business meetings were

arranged for buyers and Malaysian suppliers.

POTS 2008 was also used as a platform to sign a Memorandum of

Understanding between Sime Darby Plantation Sdn Bhd and the State

Trading Corporation of India Ltd, witnessed by YB Datuk Peter Chin Fah

Kui and HE Ashok K Kanthan, High Commissioner of India to Malaysia.

This MoU was to establish a joint venture in palm oil-related businesses

in India. The signing of the document signified the start of feasibility

studies in India by Sime Darby Plantation to determine a plan of action

to take the proposal to the next level. This collaboration was an outcome

of business networking at POTS Mumbai in May.



62 domestic promotions (cont’d)

Palm Oil Leadership Award (PILA)

Dinner, Kuala Lumpur (Oct �3)The first Palm Oil Leadership Dinner was

organised in 2007 to present the Council’s five-

year roadmap to industry leaders and to unveil the

corporate face of MPOC. In 2008, the inaugural

PILA was presented.

The award was created to honour an individual

whose leadership has contributed to the well

being of the Malaysian palm oil industry through

innovation, policy design and entrepreneurial

skills; or for corporate leadership that has resulted in significant benefits to the palm oil industry in the past or present.

The award comprises a trophy, certificate and RM30,000 in cash.

The judges comprised the heads of MPOB, FELDA, Bursa Malaysia and MPOC. They unanimously selected former Primary

Industries Minister YABhg Tun Dr Lim Keng Yaik as the first recipient.

Seats at the dinner were offered to plantation companies for sponsorship

so that they could fulfil their Corporate Social Responsibility.

Six companies sponsored 28 seats and all proceeds were channelled

to the Malaysian Palm Oil Wildlife Conservation Fund.

63



OFIC 2008, Kuala Lumpur (Oct 2�-23)MPOC was one of the primary organisers of the annual conference. Five

papers related to palm oil were presented by MPOC-sponsored speakers,

during the food and nutrition module. The topics included metabolic

syndrome, palm-based animal feed, updates on trans-fatty acids, fat

substitutes and functional ingredients. The 300 participants were from

the Asian region.

Workshop on ‘Findings on status of peatland in Malaysia: Its relation to CO2 emissions

and climate change’, Petaling Jaya (Nov 4-5)MPOC was among experts and stakeholders at the workshop organised by Wetlands International to share its draft findings

and to seek input on the findings and recommendations on the status of peatland in Malaysia. Among the 30 experts were

representatives of Wetlands International (Malaysia), Forest Research Institute of Malaysia, MARDI, Forestry Department of

Peninsular Malaysia, Forestry Department of Sabah, WWF Malaysia, Universiti Malaya, Universiti Malaysia Sarawak, MPOB,

RSPO, MPOC and MPOA. The workshop highlighted the need to continue raising awareness of the importance of conserving

the remaining half a million hectares of undisturbed peatland in Malaysia.

Joint Research Centre (JRC) of the European Commission-Malaysian Palm Oil Industry

Expert Consultation on ‘Direct and indirect impact of bio-fuel policies on tropical

deforestation in Malaysia’, Kuala Lumpur (Nov 20-22)This expert consultation, jointly organised by MPOC and JRC of the European Commission, was a follow-up to the Symposium

on Sustainable Resource Development organised in Brussels on June 6, 2007 by MPOC. The objective was to discuss data

availability and accuracy and to clarify uncertainty in order to provide the best technical support to Malaysian or European

decision makers in the fields of bio-fuels and bio-energy.

Nine JRC delegates and �6 delegates representing the Malaysian palm oil industry attended the meeting. Their discussions

covered:

i. Deforestation and forest monitoring – to improve understanding of the direct and indirect impact of bio-fuel policies

(national, European and global) on deforestation

ii. Life Cycle Assessment (LCA) and greenhouse gas (GHG) emissions – to discuss current knowledge of GHG emissions

related to oil palm cultivation, effect of land-use change, and LCA of oilseeds and palm oil

iii. Sustainability certification and wildlife conservation – to discuss the status of certification initiatives


64

On Nov 22, a field visit was arranged for the JRC delegation to an oil palm plantation, palm oil mill and associated facilities

at the Sime Darby Plantation Academy in Carey Island, Banting. The experts were shown general aspects of oil palm harvesting

and good agricultural practices. Explanations were also given on how CPO and kernel oil are obtained.

The expert consultation will lead to more discussions and the formation of working groups involving the two parties. JRC

indicated that it would continue to work with MPOC to further mutual aims through an appraisal of available scientific data, oil

palm cultivation, palm oil production and bio-fuels.

International Conference on the Environment, Penang (Dec �5-�7)MPOC co-sponsored the conference, organised by the School of Chemical Engineering of Universiti Sains Malaysia, and

presented a plenary lecture entitled ‘The Malaysian Palm Oil Industry as a Role-model for Sustainable Development in Agriculture’.

The biennial conference attempts to facilitate interdisciplinary discussion on appropriate issues and innovative technologies

in areas related to the environment, in particular for the developing world.


65


TV Programme: Selera Ramadhan MMVitaOils,

RTM� (Sept �-30) MPOC and MMVitaoils Sdn Bhd co-sponsored a cooking programme,

Selera Ramadhan MMVitaoils on RTM� throughout the Muslim fasting

month. The programme promoted the versatility of palm oil in food

preparations and built public awareness of MPOC’s role in the industry.

The programme was conceptualised as a cooking show hosted by a chef with a new guest appearing in each episode.

The chef prepared three recipes and this was followed by a discussion with the guest on topics related to Ramadhan and Islam.

The programme was aired daily from Sept �-30 at 5am, with a repeat at �2.30pm the same day. The average viewer-ship

recorded was �6�,367 per episode.

media promotions

The print, digital and electronic media remain the most effective communication tools in

the dissemination of information on palm oil. These are also the main channels to publicise

MPOC activities and events, respond to allegations against palm oil, and highlight the

sustainability of Malaysian palm oil.

A total of 52 news items were published during the year in Malaysian and international newspapers. These included MPOC’s

responses to misleading information, with a mirror copy being uploaded to its two websites. Interviews with the CEO were

published in international reports on Malaysia by such publications as Forbes Asia, Reader’s Digest, Al-Khaleej and Indian

Express.


66 media promotions (cont’d)

MPOC VIDEOS

Malaysia Palm Oil – The Golden DiscoveryThis video was released during Bursa Malaysia’s Palm and Lauric Oils Conference.

The 7-minute clip highlights the economic, social and environmental advantages of

oil palm cultivation as well as nutritional benefits of palm oil. Copies of the video

were sent to relevant Malaysian embassies abroad and foreign missions in Malaysia

to provide insight into the palm oil industry. This video was also uploaded on

MPOC’s corporate website to enable wider access.

Malaysia Palm – Golden Oil from Green AgricultureThis 5-minute video, launched during the International Palm Oil Sustainability

Conference, highlights key areas in the sustainability of Malaysian palm oil.

These cover Good Management Practices, Corporate Social Responsibility, Land-use

Efficiency and the positive role of palm oil in the carbon cycle. The footage reinforces

assertions that oil palm is grown on legal agricultural land and that sustainable

agricultural and management practices are practised in Malaysia.

67


publications & posters

Global Oils & Fats Business Magazine

Four issues of the quarterly magazine were published and circulated worldwide. Readers were updated on trade issues, safe and

sustainable agriculture, the environment, bio-fuels, health and nutrition, and market updates and analyses. Also featured were

interviews with well known personalities in the oils and fats industries. A supplementary pull-out section was published with

each issue. All editions of the magazine were uploaded on MPOC’s websites

Malaysian Palm Oil FORTUNE

This monthly magazine highlights the progress of markets and the current developments in different regions. It generates

market information and communicates with groups in the Malaysian palm oil industry to promote the work of MPOC.

Twelve issues were produced via print and electronic mail. A mirror-copy of each was uploaded on MPOC’s corporate website.


68

Malaysian Palm Oil Directory 2008/09

Posters

Old posters were given a new look and four new posters

were developed for exhibitions in which MPOC

participated or events that it organised.

publications & posters (cont’d)

The 6th edition of the Palm Oil Directory was updated with a

comprehensive listing of palm oil exporters, millers, refiners,

oleochemical and specialty fats manufacturers and kernel

crushers. A new section, under logistics, was developed to

list the contact details of brokers, shippers, insurers and

surveyors. The biennial directory provides the latest trade

information and is a useful resource for networking within

the industry. It is also produced in digital format for easy

reference.

69


publications & posters (cont’d)

The posters were to supplement information on such topics

as nutritional attributes of palm oil, the environment,

sustainable practices in the palm oil industry in Malaysia,

and activities of MPOC.


70 websites

The Internet has helped MPOC to widen awareness of the positives of palm oil and to quickly rebut allegations. This is an

effective and cost-efficient strategy in reaching users worldwide.

MPOC’s corporate website, www.mpoc.org.my, carries up-to-date information on developments in the palm oil industry. It is

also used as a platform to communicate MPOC’s views and comments on current issues pertaining to the Malaysian palm oil

industry.

A secondary website, www.malaysiapalmoil.org, initially developed in 2007 as an extension to the electronic media campaign

in Europe, is updated with news about the Malaysian palm oil industry. This website is targeted at a European audience in

communicating sustainability issues and progress being made by the Roundtable on Sustainable Palm Oil.

Other websites, developed by the MPOC regional offices, are updated with issues on palm oil that are specific to each region,

for the benefit of local users.

7�


palm oil product showcase

MPOC has set up a palm oil product showcase, located adjacent

to the main entrance of its headquarters in Kelana Jaya.

It displays palm-based food and non-food products that command

the highest market share in the different regions covered

by MPOC.

These are categorised by region and arranged according to popularity. General

information on product categories and specific information on Smart Balance

and Trans Fats are placed alongside the products. A touch-screen information

kiosk has been installed to provide detailed information on the products and

background information on the domestic palm oil industry. Many requests have

been received from palm oil producers to showcase their products as well.


72Malaysian Palm Oil Wildlife Conservation Fund (MPOWCF)

The year saw the achievement of two milestones by the MPOC:

• Official launch of the Malaysian Palm Oil Wildlife Conservation Fund

• Signing of a Memorandum of Understanding with the Borneo Conservation Trust and Bursa Malaysia for an

‘Orang Utan Survey’

Both events were held during MPOC’s inaugural International Palm Oil Sustainability Conference from April �3-�5 in

Kota Kinabalu, Sabah.

The ‘Orang Utan Survey’ was initiated with the objective of assessing the status of the orang utan population in Sabah.

The Borneo Conservation Trust and the NGO known as HUTAN undertook the project with the assistance of the Sabah

Wildlife Department.

The survey assessed trends in the distribution and density of the orang utan population, and threats to their conservation.

Key habitats and corridors outside the protected areas were identified and mapped.

On completion of the survey, a follow-up project will be carried out with the aim of rehabilitating the fragmented habitats.

This will be done in partnership with the Malaysian palm oil industry.

Ongoing sponsorship under the Fund includes:

- Orang Utan Island projects

Funds have been provided to operate the Orang Utan Island infant-care

unit in Bukit Merah Laketown Resort, Perak, and to run an education

programme for schools.

- Jungle Patrol Unit

Carried out in collaboration with the Sabah Forestry Department, the unit was established by the Fund in 2007 to

secure and safeguard wildlife and their habitats in the Tangkulap-Pinangah Forest Reserve in Sabah. The patrols

also aim to deter poaching.

- Tabin Wildlife Reserve

Financial assistance has gone towards producing educational materials

on wildlife conservation that highlight Tabin’s rich biodiversity. A book

entitled ‘Tabin – Sabah’s greatest wildlife sanctuary’ was published during

the year by the Tabin Wildlife Resort.

73


branding of Malaysian palm oil

MPOC embarked on an exercise to brand Malaysian palm oil in 2008.

The brand, symbolised by a new name – MALAYSIAPALM – and a logo, marks

the start of a dynamic chapter in the expansion of the domestic industry.

The brand represents the certified status and assured standard of Malaysian

palm oil and its products. It validates registered producers and manufacturers,

as well as products that satisfy the criteria set by the Malaysian Palm Oil

Board (MPOB) and Malaysian Palm Oil Council (MPOC).

The brand further attests to Malaysia’s support for the concept and principles

of sustainability in producing palm oil, and commitment to preserving the environment through optimum use of land that

is legally designated for agriculture.

Concurrently, the branding exercise spearheads the drive for ‘Membership Accreditation’ to garner full participation from all

involved in the sector. Their support for the ideals and certification criteria will have a direct impact on their standing in the

market place, as well as on consumer confidence in Malaysian palm oil products.

MALAYSIAPALM Scheme

The concepts and working model of the MALAYSIAPALM SCHEME were crystallised during the year. This is a voluntary

scheme for oil palm growers; palm oil millers, refiners and traders; and palm bio-diesel producers. The Scheme provides an

opportunity for those admitted to assure clients that their palm oil is obtained from oil palm cultivated on legal agricultural

land and through the application of good agricultural and management practices. It indicates that oil palm is as responsibly

cultivated in Malaysia as oilseeds grown in other countries.

The Scheme entails the issuance of a Certificate of Assurance (COA) when MPOB certifies that the palm oil raw material is

obtained from companies that it has registered and licensed, and therefore regulates. Applicants who receive the COA will

be awarded the Certificate of Brand Adoption by MPOC, which allows them to use the MALAYSIAPALM brand in advertising

materials, corporate signs, brochures, websites and packaging.

MPOC will promote the brand and regulate the use of the logo. A presentation on the branding exercise was made to members

of the Malaysian Bio-diesel Association on Aug 7 at Wisma Sawit in Petaling Jaya. In response to the interest shown, similar

briefings will be held for others in the bio-diesel supply chain.


74 public relations activities

Public relations activities are among MPOC’s core functions, aimed at promoting and protecting the interests of Malaysian

palm oil in the global oils and fats market. The ongoing debate on palm oil sustainability and the introduction of sustainable

criteria for EU bio-fuels require MPOC to develop new strategies to counter misinformation.

Sustainability has become a major issue in Europe, with countries like Germany, the UK, and the Netherlands leading the

rest in formulating sustainability and certification criteria for bio-fuels. During the year, more countries began debating and

formulating such criteria. This necessitated monitoring of developments in the EU and implementation of effective responses

that target the right groups, especially in the EU Parliament and EU Commission.

A public relations firm based in Brussels was therefore engaged to assist MPOC. It has kept MPOC up to date on pertinent

issues relating to sustainability, palm oil, bio-fuels and carbon balance, as discussed or debated in the EU Parliament.

The agency has also proposed follow-up actions.

FAMILIARISATION PROGRAMMES

European Parliamentarians

Members of the EU Parliament (MEPs),

Kuala Lumpur (Jan 22-25)

A group of MEPs visited Malaysia to learn

more about sustainable practices in oil palm

cultivation and to hold dialogues with captains

of industry on issues of sustainability and food

security. Their presence helped consolidate

support for Malaysian palm oil, neutralise

negative conceptions about Malaysian palm

oil, and strengthen the industry’s credentials in

Europe. At the same time, the dialogues served to

raise awareness within the Malaysian Government

and related agencies about Europe’s concerns

and the potential threats to the brands ‘Malaysia’

and ‘palm oil.’

75


The MEPs met YABhg Tun Musa Hitam, the

Chairman of Sime Darby Group, to exchange

views and learn about the socio-economic

contributions of palm oil to the country, and

paid a courtesy call on YB Datuk Peter Chin

Fah Kui, the Minister of Primary Industries

and Commodities.

The highlight of the visit was a roundtable

discussion with industry members and

representatives of the Malaysian Timber

Council, Forest Research Institute of

Malaysia, WWF Malaysia, Malaysian Bio-diesel Association and the Secretariat of the Roundtable on Sustainable Palm Oil.

The EU’s concerns on the environment were raised, while the Malaysian delegates were briefed on the most recent

developments in the sustainability debate in the European Parliament. The discussion also enabled Malaysia to explain

environmental and social issues linked to deforestation, illegal logging, biodiversity, development of peatland, rights of

indigenous peoples, certification and availability of sustainable palm oil, food verus non-food requirements for palm oil, and

conservation of the orang utan.

Seeing the positive outcome of the programme, the MEP delegation

suggested that more direct discussions be arranged with industry

members in future, possibly in the EU Parliament. They expressed

confidence that Malaysia would be able to produce palm oil sustainably

and that palm oil would provide the ideal solution in meeting global needs

in food safety, clean energy (bio-fuels), and poverty alleviation.

public relations activities (cont’d)


76 public relations activities

Members of Romanian Parliament, Kelana

Jaya (June 10)

Seven Romanian MEPs visited MPOC as part of

their programme with the Parliament of Malaysia.

MPOC took the opportunity to brief them on the

domestic palm oil industry and the challenges it

faces. They were briefed on the global oils and

fats scenario; RSPO and sustainable palm oil;

oil palm and deforestation; and the advantages of

palm oil and its applications vis-à-vis other oils.

The session allowed both parties to learn and understand each other’s concerns on sustainability, trade and use of palm oil.

The visit proved to be an eye-opener for the Romanian MEPs. The Deputy Head of Mission for the MEPs, the Hon. Viorel Mosanu,

acknowledged the industry’s efforts to produce palm oil responsibly and sustainably. He said that Romania looks forward

to working closely with Malaysia.

77


Member of UK Parliament, Kuala Lumpur (Aug 10-17)

MPOC hosted a visit by the Hon. Bill Cash, who is also the Chairman of the Malaysia All-Party Parliamentary Group.

The programme included a visit to an oil palm plantation as well as separate meetings with YB Datuk Peter Chin Fah Kui;

representatives of the Malaysian Timber Council; Asian Strategy and Leadership Institute; and senior officials of MPOC.

Mr Cash was briefed on sustainable practices in Malaysian plantations and on sustainability issues related to the palm oil and

timber sectors. He told the industry about the sustainability debate in the UK Parliament and its concerns about food security.

Mr Cash acknowledged the positive efforts by the Malaysian palm oil industry and lauded its commitment to producing palm oil

sustainably.

Media

Program for Journalists in Conjunction with IPOSC, Sandakan (April 12-13)

A Palm Oil Education Programme for selected journalists was organised in conjunction with the International Palm Oil

Sustainability Conference. The objective was to educate them on Good Agricultural Practices (GAPs) in Malaysian oil palm

cultivation and on the efforts by the Sabah Wildlife Department in protecting the orang utan. Emphasis was also given to forestry

matters and corporate social responsibility (CSR) of IJM Bhd, the plantation company that hosted the visit.

Throughout the programme, the participants showed a deep interest in learning about oil palm, GAPs and the industry. They were

also told about regulations and measures to minimise the impact of cultivation on the environment, biodiversity and wildlife.

The journalists were especially impressed with IJM’s commitment to sustainable production of palm oil, conservation of the

environment and forests, and to the social development of young graduates and workers.

The visit to the Orang Utan Rehabilitation Centre in Sepilok enabled the participants to learn about issues affecting the species

and the conservation measures in place. Dr Sen Nathan, Chief Field Veterinarian of the Sabah Wildlife Department, explained

the efforts of his department and the Sabah government in rehabilitating orang utan before releasing them back into the forests.

Also highlighted were the palm oil industry’s contributions in ensuring the survival of the orang utan. The programme was a

success, going by the knowledge acquired by the participants.



78

Prgramme for UK Journalist, Kuala Lumpur (June 9-13)

MPOC hosted Mr Michael Hanlon, Science Editor of Daily Mail for a familiarisation programme on palm oil. Among the topics

highlighted were biodiversity conservation of the orang utan and forests. Meetings were arranged with officials from the RSPO,

WWF Malaysia, Ministry of Natural Resources and the Environment, Sabah Forestry Department and MPOC.

He was briefed on sustainable practices on oil palm plantations and industry efforts in meeting the RSPO’s criteria. Another

session featured the Sabah government’s efforts to protect the orang utan and their habitat, and conservation of forests. A trip

to Danum Valley Field Centre in Sabah enabled Mr Hanlon to experience the richness of Malaysia’s biodiversity as well as speak

to Dr Glenn Renolds, Chief Scientist of the Royal Society, who was very positive about ongoing forestry conservation measures

and in recognising the oil palm industry’s contributions in elevating the living standards of people living in rural areas.


79


calendar of events


80


calendar of events 2008

January January Red Palm Oil Feeding Programme; Miri, Sarawak

18 MPOC-UMS Seminar on Palm Oil; Kota Kinabalu, Sabah

22 Seminar on ‘Life Cycle Assessment for Industry and Business Sustainability’; Subang Jaya, Selangor

22-25 Familiarisation Programme for Members of EU Parliament; Kuala Lumpur

24-26 Symposium on Palm Oil in Conjunction with the �6th National Convention of Council of

Hotel and Restaurant Educators of The Philippines; Manila

26 Palm Oil Promotions Programme; Miri, Sarawak

30-Feb 1 Panacea Exhibition; Mumbai, India

FebruaryFebruary Market Research on Product Ingredients; Lahore & Karachi, Pakistan

2 Women’s 3F Show; Dubai, UAE

3-6 National Bio-diesel Conference & Expo 2008; Florida, US

11 Lecture on Malaysian Palm Oil at University of Cairo; Egypt

11-14 Market Visit to Doha; Qatar

11-14 Market Visit to Poland

19 Product Launch at Zylka Propolis; Ghent, Belgium

21-22 USDA Outlook Forum 2008; Texas, US

22-29 Ekspo Komoditi 2008; Miri, Sarawak

24-27 �3th Gulf Food, Hotel Equipment Exhibition and Salon Culinary Exhibition; Dubai, UAE

24-27 International Restaurant Show in Las Vegas; Nevada, US

25-27 Palm Oil Price Outlook Conference & Exhibition; Kuala Lumpur

28 Palm Oil Seminar at Cairo University; Egypt

29 Medical Seminar on ‘Controversies and Myths on Fats/Oils Nutrition’; Kuala Lumpur

29 Meeting at the Brazilian Embassy in Brussels; Belgium

80

8�

MALAYSIAN PALM OIL COUNCIL Annual Report 2008MALAYSIAN PALM OIL COUNCIL Annual Report 2008

calendar of events 2008 (cont’d)

March1-14 Working Visit to Oregon and Hawaii; US

4 Workshop on ‘Sustainability Criteria for Bio-fuels’; Brussels, Belgium

4-6 The 5th Alexandria Conference for Food Science & Technology; Egypt

6 Program Timbalan Perdana Menteri Bersama Perkebun Kecil dan Pekerja

Ladang dalam MenjayakanTanggungjawab Sosial dan Korporat;

Shah Alam, Selangor

9-12 NIOP Annual Convention; Florida, US

11-12 International Symposium on ‘Peat Swamp Forests – Towards enhancement of

knowledge-based decision making in the conservation and

management of natural resources’; Kuala Lumpur

12-14 World Bio-fuels Congress; Brussels, Belgium

14-16 NPEW 2008; California, US

14-28 Cairo International Trade Fair; Egypt

17-18 Dialogue with the German and Sweden Permanent Representation

in the EU; Brussels, Belgium

17-19 Personal Care and Home-care Ingredients Exhibition; Shanghai, China

20-22 Showcase Malaysia 2008; Dhaka, Bangladesh

26-28 Food Ingredients China; Shanghai

26-28 Dialogue with the Slovenian Presidency and Dutch Permanent Representation in the EU;

Brussels, Belgium

8�


82


April3-5 Nutrition and Health Exhibition; Beijing, China

7-8 �st Joint Commission Meeting between Malaysia and Egypt; Cairo

12-13 Programme for Journalists in Conjunction with IPOSC; Sandakan, Sabah

12-18 Palm Oil Familiarisation Programme for Chinese Officials;

Kota Kinabalu, Sabah

13-15 International Conference on Palm Oil Sustainability; Kota Kinabalu, Sabah

15-16 OFI Middle East 2008; Abu Dhabi, UAE

17 Dialogue with the President of the Ad-hoc Working Group; Brussels, Belgium

22 Technical Seminar with National Research Centre; Cairo, Egypt

22-25 Food and Hotel Asia Exhibition; Singapore

25 National Cardiac Conference; Dhaka, Bangladesh

28- 2 May CODEX Committee Meeting on Food Labelling; Ottawa, Canada

calendar of events 2008 (cont’d)82

83


May2 MPOC-Ngee Ann Polytechnic Seminar on Palm Oil; Singapore

2 State Department Dialogue on ‘Sustainable Palm Oil’; Washington DC, US

4 NW Bio-diesel Forum; Washington, US

6 Group Meeting with European Commission Officials and Representatives

of the Joint Research Council; Brussels, Belgium

9 MPOC-Temasek Polytechnic Seminar on Palm Oil; Singapore

7-11 Malaysia International Halal Showcase; Kuala Lumpur

12-13 Visit to CARB and Energy Commission; California, US

13-15 China Bakery Exhibition; Guangzhou

14-17 Seoul Food and Hotel Exhibition; South Korea

16 Roundtable Discussion on Stearic Acid; Washington, US

calendar of events 2008 (cont’d) 83


84


May (Cont’d)

17-19 5th Malaysian Conference & Exhibition on Anti-aging and Aesthetic Medicine; Kuala Lumpur

21 Trade Seminar & Dialogue; Djibouti, Ethiopia

21-23 International Workshop on ‘Conservation of the Bornean Elephant in Sabah’; Kota Kinabalu

21-25 Thaifex 2008 International Food Exhibition & Conference; Bangkok, Thailand

26-27 POTS Dubai; UAE

27 Trade Seminar & Dialogue; Addis Ababa, Ethiopia

29-30 POTS Mumbai & Ministerial Mission; India

28-30 Joint Forum on ‘Bio-energy Sustainability and

Life Cycle Analysis’; California, US

29-30 Conference on ‘Sustainability and Carbon Footprint’; London, UK

29-31 48th National Annual General Meeting & Scientific Meeting of

Malaysian Medical Association; Kuching, Sarawak

June8-13 �3th International Peat Congress; Tullamore, Ireland

9-13 Programme for UK Journalist; Kuala Lumpur

10 Familiarisation Programme for Members of Romanian Parliament; Kelana Jaya, Selangor

13-14 IOPD XI; Berlin, Germany

17-18 Seminar on ‘Development of the Oleochemical Industry in China’; Huangshan

19 REACH Meeting with MIDA; Kuala Lumpur

June Market Visit to Kazakhstan

23-26 Fispal 2008 & Palm Oil Symposium; Sao Paulo, Brazil

28-July 2 IFT Annual Meeting; California, US


85


JulyJuly Launch of Palm Olein-based Cooking Oil; Karachi, Pakistan

2-6 International Conference on Sustainable Agriculture; Sapporo, Japan

3-6 The Sunday Times Food Show; Johannesburg, South Africa

8 MPOC-Nanyang Polytechnic Seminar on Palm Oil; Singapore

10-12 9th Malaysia International Food & Beverage Trade Fair; Kuala Lumpur

10-24 Recee visit to Ghana, Togo and Benin

11 EU Bio-fuels Workshop on ‘Opportunities for Southeast Asia’; Jakarta, Indonesia

16 MPOC-Singapore Polytechnic Seminar on Palm Oil; Singapore

18 MPOC-SIFTS Seminar; Singapore

29-31 3rd International Conference on Animal Nutrition; Bangi, Selangor



86


August

5 Launch of Palm Olein-Based Cooking Oil; Karachi, Pakistan

5-8 Meeting on investing in Oil Palm Plantations; Lusaka, Zambia

6 The Monitor-Malaysian Palm Oil Chef of the Year; Dhaka, Bangladesh

7 Presentation on MalaysiaPalm Scheme to members of the

Malaysian Bio-diesel Association; Kelana Jaya, Selangor

10-17 Familiarisation Programme for Member of UK Parliament; Kuala Lumpur

11-23 Malaysia Agriculture, Horticulture & Agrotourism Show; Serdang, Selangor

19 MPOC-NUS Seminar on Palm Oil; Singapore

19-22 International Symposium & Workshop on Tropical Peatland;

Kuching, Sarawak

22-23 Palm Oil Trade Awareness Programme; Kuala Lumpur

24-26 2nd International Palm oil Trade Fair & Seminar 2008; Kuala Lumpur

September1-3 47th Annual Convention of the Philippine Association of

Food Technologists, Inc, Manila, The Philippines

3-6 �7th Asia Food Expo; Manila, The Philippines

7-15 Ministerial Mission to The Hague, Brussels and London

17-18 In-cosmetics India 2008; Mumbai


87



October13 Palm Oil Leadership Award Dinner; Kuala Lumpur

16-18 Malaysia-China POTS 2008, Nanjing

19-23 SIAL Exhibition; Paris, France

21-23 OFIC 2008; Kuala Lumpur

21-24 China Confectionery and Ice Cream Exhibition; Tianjin

22 Meeting with Palm Oil Stakeholders; Rotterdam, The Netherlands

26-28 ADA 2008; Illinois, US

27-30 9th Western China International Economy and Trade Fair; Chengdu

28 Re-launch of MPOC Cairo Office website; Egypt

28 Seminar on Palm Oil; Dhaka, Bangladesh

29 Scientific Seminar on Palm Oil; Dhaka, Bangladesh


88

November

Nov 2008-Mar 2009 ‘MPOC Delightful Dining’ TV Cooking Show; Pakistan

3-7 CODEX Committee Meeting on ‘Nutrition and Food for Special Dietary Use’;

Cape Town, South Africa

4-5 Workshop on ‘Findings on status of peatland in Malaysia: its relation to CO2

emissions and climate change’; Petaling Jaya, Selangor

7 Health & Food Seminar; Cairo, Egypt

11-14 Halal World Expo 2008; Abu Dhabi, UAE

12-13 International Conference on ‘Functional Foods and Edible Oils –The Future’;

Auckland, New Zealand

16-19 Personal Care Ingredients Exhibition; Bangkok, Thailand

17-20 RSPO 6th Roundtable Meeting; Bali, Indonesia

20-22 Joint Research Centre of the European Commission-Malaysian Palm Oil

Industry Expert Consultation on ‘Direct and indirect impact of bio-fuel policies on

tropical deforestation in Malaysia’; Kuala Lumpur

December1-2 6th International Bio-fuels Conference; Berlin, Germany

3 Dialogue with Members of Parliament; Berlin, Germany

5 Palm Oil Technical Seminar for University Students; Hanoi, Vietnam

15-17 International Conference on the Environment; Penang, Malaysia

18-20 Dawn ‘All About Lifestyles’ Exhibition; Karachi, Pakistan


89


financial statements


90trustees’ report for the year ended 31 december 2008

The Trustees hereby submit their report and the audited financial statements of MPOC for the year ended 3� December 2008.

Principal activities

MPOC is principally engaged in market promotion of palm oil and oil palm products domestically and internationally. There have

been no significant changes in the nature of this principal activity during the year.

Results

RM’000

Deficit of income over expenditure for the year 36�

Reserves and provisions

There were no material transfers to or from reserves and provisions during the year under review.

Board of Trustees of MPOC

The trustees who served since the date of the last report are:

Y. Bhg Dato’ Lee Yeow Chor

Y. Bhg Tan Sri Datuk Dr. Yusof Basiron

Y. Bhg Dato’ Er Kok Leong @ Er Chai Tuan

Y. Bhg Datu Vasco Sabat Anak Singkang

Y. Bhg Dato’ Dr. Mohd. Basri Bin Wahid

Y. Bhg Dato’ Carl Bek- Nielsen

Puan Nurmala Binti Abd Rahim

En. Ramli Bin Putih

Mr. Low Kock Ching (appointed on 30.06.2008)

Y. Bhg Dato’ Azhar Bin Abdul Hamid (appointed on 27.06.2008)

Mr. Venugopal A/L Ramalingam (appointed on 22.04.2008)

Tuan Haji Eusope @ Yusoff Bin Ismail (appointed on 03.03.2008)

Y. Bhg Dato’ Seri Lee Oi Hian (retired on 21.02.2009)

Mr. Kwok Kian Hai (retired on 30.09.2008)

Y. Bhg Dato’ Sabri Ahmad (retired on 27.06.2008)

En. Muhammad Hakim See Bin Abdullah (retired on 22.04.2008)

Y. Bhg Datuk Mazlan Haji Jamaludin (retired on 03.03.2008)

Y. Bhg Dato’ Low Mong Hua (deceased on 13.04.2008)

9�


Since the end of the previous financial year, no Trustee has received nor become entitled to receive any benefit by reason of a

contract made by MPOC with a firm of which the Trustee is a member, or with a company in which the Trustee has a substantial

financial interest.

Other statutory information

Before the financial statements of MPOC were made out, the Trustees took reasonable steps to ascertain that:

i) there are no bad debts to be written off and no provision needs to be made for doubtful debts, and

ii) all current assets have been stated at the lower of cost and net realisable value.

At the date of this report, the Trustees are not aware of any circumstances:

i) that would render it necessary to write off any bad debts, or provide for any doubtful debts, or

ii) that would render the value attributed to the current assets in MPOC financial statements misleading, or

iii) which have arisen which render adherence to the existing method of valuation of assets or liabilities of MPOC

misleading or inappropriate, or

iv) not otherwise dealt with in this report or the financial statements, that would render any amount stated in the financial

statements of MPOC misleading.

At the date of this report, there does not exist:

i) any charge on the assets of MPOC that has arisen since the end of the financial year and which secures the liabilities

of any other person, or

ii) any contingent liability in respect of MPOC that has arisen since the end of the financial year.

No contingent liability or other liability of MPOC has become enforceable, or is likely to become enforceable within the period of

twelve months after the end of the financial year which, in the opinion of the Trustees, will or may substantially affect the ability

of MPOC to meet their obligations as and when they fall due.

In the opinion of the Trustees, the results of the operations of MPOC for the financial year ended 3� December 2008 have not

been substantially affected by any item, transaction or event of a material and unusual nature nor has any such item, transaction

or event occurred in the interval between the end of that financial year and the date of this report.

board of trustees’ benefits


92

The auditors, Messrs KPMG, have indicated their willingness to accept re-appointment.

Signed on behalf of the Board of Trustees in accordance with a resolution of the Trustees:

………………………………………………….……


………………………………………………….……

Tan Sri Datuk Dr. Yusof Basiron

Kuala Lumpur,

Date: �7 April 2009

statement by trustees pursuant to section 169(15) of the companies act, 1965

In the opinion of the Trustees, the financial statements set out on pages 96 to �� are drawn up in accordance with Financial

Reporting Standards and the Companies Act, �965 in Malaysia so as to give a true and fair view of the financial position of MPOC

as of 3� December 2008 and of its financial performance and cash flows for the year then ended.

Signed on behalf of the Board of Trustees in accordance with a resolution of the Trustees:

………………………………………………….……


………………………………………………….……


Kuala Lumpur,


auditors

93


statutory declaration pursuant to section 169(16) of the companies act, 1965

I, Tan Sri Datuk Dr. Yusof Basiron, the Trustee primarily responsible for the financial management of Malaysian Palm Oil

Council, do solemnly and sincerely declare that the financial statements set out on pages 96 to �� are, to the best of my

knowledge and belief, correct and I make this solemn declaration conscientiously believing the same to be true, and by virtue of

the provisions of the Statutory Declarations Act, �960.

Subscribed and solemnly declared by the above named in Kuala Lumpur on �7 April 2009.

……………………………………………….


Before me:


94

Report on the Financial Statements

We have audited the financial statements of Malaysian Palm Oil Council (“MPOC”), which comprise the balance sheet as at

3� December 2008 of MPOC, and the income and expenditure and cash flow statement of MPOC for the year then ended, and a

summary of significant accounting policies and other explanatory notes, as set out on pages �00 to ��.

Trustees’ Responsibility for the Financial Statements

The MPOC’s Trustees are responsible for the preparation and fair presentation of these financial statements in accordance with

Financial Reporting Standards and the Companies Act, �965 in Malaysia. This responsibility includes: designing, implementing

and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material

misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting

estimates that are reasonable in the circumstances.

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in

accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical

requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from

material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.

The procedures selected depend on our judgment, including the assessment of risks of material misstatement of the financial

statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to MPOC’s

preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the

circumstances, but not for the purpose of expressing an opinion on the effectiveness of the MPOC’s internal control. An audit

also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates

made by the Trustees, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements have been properly drawn up in accordance with Financial Reporting Standards and

the Companies Act, �965 in Malaysia so as to give a true and fair view of the financial position of MPOC as of 3� December 2008

and of its income and expenditure and cash flows for the year then ended.

independent auditors’ report to the members of Malaysian Palm Oil Council (“MPOC”)

95


independent auditors’ report to the members of Malaysian Palm Oil Council (“MPOC”) (cont’d)

Report on Other Legal and Regulatory Requirements

In accordance with the requirements of the Companies Act, �965 in Malaysia, we also report that in our opinion the accounting

and other records and the registers required by the Act to be kept by MPOC have been properly kept in accordance with the

provisions of the Act.

Other Matters

This report is made solely to the members of MPOC, as a body, in accordance with Section �74 of the Companies Act, �965

in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.

KPMG Lee Yee Keng

Firm Number: AF 0758 Approval Number: 2880/04/��(J)

Chartered Accountants Chartered Accountant

Petaling Jaya,



96

Note 2008 2007

RM’000 RM’000

Assets

Property, plant and equipment 3 �,496 6�7

Other investment 4 500 500

Receivables 5 ��8 �39

Total non-current assets 2,��4 �,256

Current assets

Receivables 5 778 336

Cash and cash equivalents 6 44,432 25,808

Total current assets 45,2�0 26,�44

Total assets 47,324 27,400

Accumulated funds - General fund 7 7,7�7 8,078

Staff loan fund 8 350 350

Europe Promotion Fund 9 �2 94�

Advertisement Fund �0 2,688 3,046

Malaysian Palm Oil Wildlife and Conservation Fund �� 9,55� 9,809

Anti Palm Oil Campaign Fund �2 24,000 -

Total equity 44,3�8 22,224

Liabilities

Payables and accruals �3 2,223 4,426

Current tax liability 783 750

Total current liabilities 3,006 5,�76

Total equity and liabilities 47,324 27,400

The notes set out on pages �00 to �� are an integral part of these financial statements.

balance sheet at 31 december 2008

97


income and expenditure account for the year ended 31 december 2008

Note 2008 2007

RM’000 RM’000

Income

Contributions from MPOB 26,320 27,875

Contributions from other companies 60 �00

Other operating income 34 69

26,4�4 28,044

Less: Expenditure

Auditors’ remuneration �6 �4

Depreciation �6� �74

Development cost �,670 2,�67

Entertainment 40 39

EPF/SOCSO �4 547 585

Fixed assets maintenance 83 76

Meeting allowances and expenses 69 7�

Office supplies 4�7 220

Other professional services 356 289

Postages and dispatches 66 63

Project expenses �5 �6,505 �5,899

Rental of building and equipment 570 536

Salaries, allowances and bonus �4 6,055 5,�55

Secretarial and accountancy fees 46 49

Staff travelling expenses 272 386

Telephone and fax �77 �30

Unutilised leave 68 �9

Miscellaneous expenses - 2

Property, plant and equipment written off � -

27,��9 25,874

Operating (deficit)/surplus (705 ) 2,�70

Interest income from fixed deposits 54� 500

Interest income from staff loan 7 7

Profit margin income from other investment 7 �3

(Deficit)/Surplus of income over expenditure before tax (�50 ) 2,690

Tax expense �6 (2�� ) (�53 )

(Deficit)/Surplus of income over expenditure for the year (36� ) 2,537

Accumulated fund surplus brought forward 8,078 5,54�

Accumulated fund surplus carried forward 7,7�7 8,078



98Statement of total recognised gains and losses for the year ended 31 December 2008

MPOC has not recognised gains and losses other than the (deficit)/surplus of income over expenditure for the year and

previous year.


99


cash flow statement for the year ended 31 december 2008

2008 2007 RM’000 RM’000 Cash flows from operating activities (Deficit)/Surplus of income over expenditure before tax - General fund (�50 ) 2,690 - Europe Promotion Fund (929 ) 94� - Advertisement Fund (358 ) 3,046 - Malaysian Palm Oil Wildlife and Conservation Fund (258 ) 9,809 - Anti Palm Oil Campaign Fund 24,000 -

22,305 �6,486 Adjustments for: Depreciation �6� �74 Interest income from fixed deposits - General fund (54� ) (500 ) - MPOWCF (290 ) (�45 ) Interest income from staff loan (7 ) (7 ) Profit margin income from other investment (7 ) (�3 ) Property, plant and equipment written off � - Surplus of income over expenditure before changes in working capital 2�,622 �5,995 Changes in working capital Receivables (476 ) 4 Payables and accruals (2,203 ) �,008

Cash generated from operations �8,943 �7,007 Income taxes paid (�78 ) (59 )

Net cash generated from operating activities �8,765 �6,948

Cash flows from investing activities Acquisition of property, plant and equipment (�,04� ) (346 ) Interest received from fixed deposits 83� 554 Interest received from staff loan 7 7 Profit margin income from other investment 7 �3 Proceed from/(Advances to) staff loan 55 (3 ) Acquisition of other investment - (500 ) Net cash used in investing activities (�4� ) (275 ) Net increase in cash and cash equivalents �8,624 �6,673 Cash and cash equivalents at � January 25,808 9,�35

Cash and cash equivalents at 31 December 44,432 25,808

Cash and cash equivalents comprise: Cash and bank balances 5,432 2,808 Deposits placed with licensed banks 39,000 23,000

44,432 25,808


�00notes to the financial statements

MPOC is a non-profit making organisation and is a company limited by guarantee. Under para 8 of the Memorandum of

Association of the MPOC, the liability of each members’ organisation is restricted to a maximum of RM�00 each in respect

of the liabilities of the MPOC contracted in the case of winding up. At 3� December 2008, there were 6 members (2007 – 6

members).

MPOC’s address of the principal place of business and registered office is as follows:

2nd Floor, Wisma Sawit

Lot 6, SS6, Jalan Perbandaran

4730� Kelana Jaya

Selangor Darul Ehsan, Malaysia.

MPOC is principally engaged in market promotion of palm oil and oil palm products domestically and internationally.

There have been no significant changes in the nature of this principal activity during the year.

The financial statements were approved by the Board of Trustees on �7 April 2009.

1. Basis of preparation

(a) Statement of compliance

The financial statements of MPOC have been prepared in accordance with Financial Reporting Standards (FRS),

accounting principles generally accepted and the Companies Act, �965 in Malaysia.

MPOC has not applied the following accounting standards (including its consequential amendments) and

interpretations that have been issued by the Malaysian Accounting Standards Board (MASB) but are not yet

effective:

FRSs / Interpretations Effective date

FRS 4, Insurance Contracts � January 20�0

FRS 7, Financial Instruments: Disclosures � January 20�0

FRS 8, Operating Segments � July 2009

FRS �39, Financial Instruments: Recognition and Measurement � January 20�0

IC Interpretation 9, Reassessment of Embedded Derivatives � January 20�0

IC Interpretation �0, Interim Financial Reporting and Impairment � January 20�0

MPOC plans to apply the abovementioned FRSs/Interpretations, where applicable, from the annual period beginning � January

20�0.

�0�


1. Basis of preparation (cont’d)

(a) Statement of compliance (cont’d)

The impact of applying FRS 4, FRS 7 and FRS �39 on the financial statements upon first adoption as required by

paragraph 30(b) of FRS �08, Accounting Policies, Changes in Accounting Estimates and Errors is not disclosed by

virtue of the exemptions given in the respective FRSs. Other than the implications as discussed below, the initial

application of the above standards (and its consequential amendments) and interpretations is not expected to have

any material impact on the financial statements of MPOC.

(b) Basis of measurement

The financial statements have been prepared on the historical cost basis.

(c) Functional and presentation currency

The financial statements are presented in RM (Ringgit Malaysia), which is MPOC’s functional currency.

(d) Use of estimates and judgements

The preparation of financial statements requires management to make judgements, estimates and assumptions that

affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses.

Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are

recognised in the period in which the estimate is revised and in any future periods affected.

There are no significant areas of estimation, uncertainty and critical judgements in applying accounting policies

that have significant effect on the amounts recognised in the financial statements.

notes to the financial statements (cont’d)


�02

2. Significant accounting policies

The accounting policies set out below have been applied consistently to the periods presented in these financial

statements, unless otherwise stated.

(a) Investment in equity securities

Investments in equity securities are recognised initially at cost plus attributable transaction costs. Where the opinion

of the Trustees, there is a decline other than temporary in the value of non-current equity securities, the allowance

for diminution in value is recognised as an expense in the financial year in which the decline is identified.

(b) Foreign currency

Foreign currency transactions

Transactions in foreign currencies are translated to the respective functional currencies of MPOC at exchange

rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the balance

sheet date are retranslated to the functional currency at the exchange rate at that date. Non-monetary assets and

liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional

currency at the exchange rate at the date that the fair value was determined. Foreign currency differences arising on

retranslation are recognised in the income statements.

(c) Property, plant and equipment

(i) Recognition and measurement

Items of property, plant and equipment are stated at cost less any accumulated depreciation and any

accumulated impairment loss.

Cost includes expenditures that are directly attributable to the acquisition of asset and any other costs directly

attributable to bringing the asset to working condition for its intended use, and the costs of dismantling and

removing the items and restoring the site on which they are located. Purchased software that is integral to the

functionality of the related equipment is capitalised as part of that equipment.

When significant parts of an item of property, plant and equipment have different useful lives, they are

accounted for as separate items (major components) of property, plant and equipment.

Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the

proceeds from disposal with the carrying amount of property, plant and equipment and are recognised net

within “other income” or “other operating expenses” respectively in the income statements.


�03


2. Significant accounting policies (cont’d)

(c) Property, plant and equipment (continued)

(ii) Depreciation

Depreciation is recognised in the income and expenditure statement on a straight-line basis over the estimated

useful lives of each part of an item of property, plant and equipment. Building under construction is not

depreciated until the asset are ready for their intended use.

The estimated useful lives for the current and comparative periods are as follows:

Exhibition equipment 8 years

Office furniture and fittings 8 years

Office equipment 8 years

Communication equipment 8 years

Motor vehicles 5 years

Property, plant and equipment purchased by MPOC’s representative offices overseas are expensed off in the

income and expenditure account as and when incurred.

Depreciation methods, useful lives and residual values are reassessed at the balance sheet date.

(d) Receivables

Receivables are initially recognised at their cost when the contractual right to receive cash or another financial

asset from another entity is established.

Subsequent to initial recognition, receivables are stated at cost less allowance for doubtful debts.

Receivables are not held for the purpose of trading.

(e) Cash and cash equivalents

Cash and cash equivalents consist of cash on hand, balances and deposits with banks and highly liquid

investments which have an insignificant risk of changes in value. For the purpose of the cash flow statement,

cash and cash equivalents are presented net of bank overdrafts and pledged deposits.



�04


(f) Impairment of assets

The carrying amount of assets, except for financial assets is reviewed at each balance sheet date to determine

whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is

estimated.

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less

costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using

a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to

the asset. For the purpose of impairment testing, assets are grouped together into the smallest group of assets that

generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or

groups of assets (the “cash-generating unit”).

An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its

recoverable amount. Impairment losses are recognised in the income statements. Impairment losses recognised

in respect of cash-generating units are to reduce the carrying amount of the assets in the unit (groups of units) on a

prorate basis.

Impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss

has decreased or no longer exist. An impairment loss is reversed if there has been a change in the estimates used

to determine the recoverable amount. An impairment loss is recovered only to the extent that the asset’s carrying

amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation,

if no impairment loss has been recognised. Reversals of impairment losses are credited to the income and expenditure

statement in the year in which the reversals are recognised.

(g) Employee benefits

Short-term employee benefits

Short-term employee benefit obligations in respect of salaries, annual bonuses, paid annual leave and sick leave are

measured on an undiscounted basis and are expensed as the related service is provided.

MPOC’s contribution to statutory pension funds is charged to the income statements in the year to which they relate.

Once the contributions have been paid, MPOC has no further payment obligations


�05



(h) Payables

Payables are measured initially and subsequently at cost. Payables are recognised when there is a contractual

obligation to deliver cash or another financial asset to another entity.

(i) Revenue recognition

(i) Contribution from Malaysian Palm Oil Board

The contribution is recognised in the income statement as it becomes entitled based on the approved annual

budget.

(ii) Interest income

Interest income is recognised in the income statement as it accrues, taking into account the effective yield on

the asset.

(j) Special purpose funds

The contributions and expenses are recognised in the income statement on a cash basis.

(k) Tax expense

The tax expense in the income statement represents taxation at current tax rates based on interest income and profit

margin earned during the year.

The payment of income tax in respect of the statutory income in relation to MPOC’s sources of income is exempted

by Section �27 (3)(b) of the Income Tax Act, �967.



�06

3. Property, plant and equipment

Office furniture Building Exhibition and Office Communication Motor under equipment fittings equipment equipment vehicles construction Total Cost RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

At � January 2007 76 �93 380 70 502 - �,22�

Additions - 2 60 � 283 - 346

At 3� December 2007/� January 2008 76 �95 440 7� 785 - �,567

Additions - �0 2 �0 - �,0�9 �,04�

Write off - (4 ) (285 ) (�� ) - - (300 )

At 3� December 2008 76 20� �57 70 785 �,0�9 2,308

Accumulated depreciation

At � January 2008 7� �44 328 43 �90 - 776

Depreciation for the year 3 �0 �6 4 �4� - �74

At 3� December 2007/� January 2008 74 �54 344 47 33� - 950

Depreciation for the year 2 �0 �6 4 �29 - �6�

Write off - (4 ) (285 ) (�0 ) - - (299 )

At 3� December 2008 76 �60 75 4� 460 - 8�2

Carrying amounts

At � January 2007 5 49 52 27 3�2 - 445

At 3� December 2007/� January 2008 2 4� 96 24 454 - 6�7

At 3� December 2008 - 4� 82 29 325 �,0�9 �,496


�07


4. Other investment 2008 2007 RM’000 RM’000 Non-current At cost: Restricted Mudharabah Structured Investment 500 500

5. Receivables 2008 2007 RM’000 RM’000 Non-current Staff loan ��8 �39

Current Staff loan �7 5� Other receivables 76� 285

778 336

The staff loan is unsecured, charged interest at 4 % (2005 - 4%) per annum and is repayable by monthly installment over a period ranging from 3 to 5 years.

6. Cash and cash equivalents 2008 2007 RM’000 RM’000

Deposits placed with licensed banks 39,000 23,000 Cash and bank balances 5,432 2,808

44,432 25,808

7. Accumulated funds - General fund 2008 2007 RM’000 RM’000

At � January 8,078 5,54� (Deficit)/Surplus of income over expenditure for the year (36� ) 2,537

At 3� December 7,7�7 8,078

8. Staff loan fund Staff loan fund is a fund allocated from accumulated funds in previous years which is available for the provision of loan to staff. At year end, the total staff loan provided is amounting to RM�34,7�7 (2007 - RM�90,4�0)(Note 5).



�08

9. Europe Promotion Fund

Europe Promotion Fund was allocated during the year by Malaysian Ministry of Plantation Industries and Commodities

(KPPK) to MPOC for overseas palm oil promotion to fight against anti palm oil campaign in Europe region.

This fund had a deficit of income over expenditure of RM928,926 (2007 - Surplus of RM940,930) during the year.

10. Advertisement Fund

Advertisement Fund was approved by KPPK for the promotion and branding of Malaysian palm oil through electronic

media in Europe and U.S. Fund was allocated by MPOB.

This fund had a deficit of income over expenditure of RM358,267 (2007 - Surplus of RM3,046,053) during the year.

11. Malaysian Palm Oil Wildlife and Conservation Fund

Malaysian Palm Oil Wildlife and Conservation Fund was established to enhance environmental sustainability,

biodiversity conservation and wild life preservation. This fund was allocated by MPOB.

This fund had a deficit of income over expenditure of RM258,223 (2007 - Surplus of RM9,808,97�) and interest

received from fixed deposits of RM290,293 (2007 - RM�45,�47) during the year.

12. Anti Palm Oil Campaign Fund

This fund of RM24 million established on during the year to fight against anti palm oil campaign.

13. Payables and accruals 2008 2007 RM’000 RM’000

Other payables 43� 2,067 Accrued expenses 4�7 �,�3� Provisions for PRIME - 80 Provisions for bonus �,093 934 Provisions for unutilised leave 282 2�4

2,223 4,426


�09


14. Employee information 2008 2007 RM’000 RM’000 Employees’ Provident Fund 547 585 Other staff costs 6,055 5,�55

6,602 5,740

15. Project expenses 2008 2007 RM’000 RM’000 Scientific activities Nutrition study and seminars 743 5�5 Nutrition Advisory Committee expenses: Palm Oil Awareness Programme - 57

743 572

Market development/promotion Market mission �,�5� 259 Educational visits 263 340 Seminars �,627 4,443 Sponsorship and core programmes - 23 Consumer promotion �,882 �,564 Global networking 4,808 4,966

9,73� ��,595

Public relations and promotion Exhibitions/trade fairs 2,963 �,�42 Advertising �,039 920

4,002 2,062

Publications �,602 80�

Professional services Legal/nutrition consultants 3�� 77� Other- certification ��6 98

427 869

�6,505 �5,899



��0

16. Tax expense 2008 2007 RM’000 RM’000 Current tax expense - Current 204 �7� - Under/(Over)provision in prior years 7 (�8 )

2�� 53

Reconciliation of effective tax expense Interest income from fixed deposits 83� 645 Interest income from staff loan 7 7 Profit margin income from other investment 7 �3

Chargeable income 845 665

Income tax using Malaysian tax rates 204 �7� Under/(Over)provision in prior years 7 (�8 )

Tax expense 2�� 53

MPOC is exempted from tax in respect of contribution from Malaysian Palm Oil Board (“MPOB”) under Section �27(3)(b) of the Income Tax Act, �967.

The taxation charge in the income statement is in respect of interest income earned.

17. Financial instruments

Financial risk management objectives and policies

Exposure to credit, interest rate and currency risks arises in the normal course of the MPOC’s business. The nature of these risks and the MPOC’s management of these risks are summarised below: Credit risk

MPOC’s primary exposure to credit risk arises through its other receivables. At balance sheet date, MPOC has no significant exposure to any individual customer. The maximum exposure to credit risk is represented by the carrying amount of each financial asset presented in the balance sheet.


��


17. Financial instruments (Cont’d)

Interest rate risk

MPOC places cash balances with reputable financial institutions to generate interest income for MPOC. It manages its interest rate risk by placing such balances on varying maturities and interest rate terms. Currency risk

It is not MPOC’s policy to enter into foreign exchange contracts in managing its foreign exchange risk resulting from cash flows from transactions denominated in foreign currency.

Liquidity risk

MPOC monitors and maintains a level of cash and cash equivalents deemed adequate by management to finance its operation and to mitigate the effects of fluctuation in cash flows.

Effective interest rates

In respect of interest-earning assets, the following table indicates their effective interest rates at the balance sheet date and the periods in which they reprice or mature, whichever is earlier.

2008 2007

Effective Effective interest Within 1-5 interest Within 1-5 rate Total 1year years rate Total 1year years % RM’000 RM’000 RM’000 % RM’000 RM’000 RM’000 Financialassets Staff loans 4.0 �35 �7 ��8 4.0 �90 5� �39 Deposits placed with licensed banks 3.5 39,000 39,000 - 3.5 23,000 23,000 -

Fairvalues

In respect of other investment, cash and cash equivalents, receivables and payables and accruals, the carrying amounts approximate fair value due to the favorable rates earned and relatively short term nature of these financial instruments.

The loans provided to the staff were at favorable rates and hence, it is not practicable to determine the fair value with sufficient reliability.

It was not practicable to estimate the fair value of the MPOC’s other investment of investment in unquoted shares due to the lack of comparable quoted market prices and the inability to estimate fair value without incurring excessive costs.



��2 l ist of abbreviations

CDSBO Crude Degummed Soybean Oil

CNO Coconut Oil

CO Cooking Oil

CPKO Crude Palm Kernel Oil

CPL Crude Palm Olein

CPO Crude Palm Oil

CPS Crude Palm Stearin

CSO Cottonseed Oil

DFPL / DPL Double Fractionated Palm Olein

MO Mustard Oil

PFAD Palm Fatty Acid Distillates

PKC Palm Kernel Cake

PKL Palm Kernel Olein

PKM Palm Kernel Meal

PKS Palm Kernel Stearin

PKO Palm Kernel Oil

PL Palm Olein

PMF Palm Mid Fraction

PO Palm Oil

PPKO Processed Palm Kernel Oil

PPO Processed Palm Oil

RBD Refined, Bleached & Deodorised (physical refining)

RBD PL Refined, Bleached & Deodorised Palm Olein

RBD PO Refined, Bleached & Deodorised Palm Oil

RBD PS Refined, Bleached & Deodorised Palm Stearin

RSO Rapeseed Oil

SBO Soybean Oil

SFO Sunflower Oil

Malaysian Palm Oil Council (192835-K)

2nd Floor, Wisma Sawit, Lot 6, SS6, Jalan Perbandaran, 47301 Kelana Jaya, Selangor Darul Ehsan, Malaysia

Tel: +603 - 7806 4097, Fax: +603 - 7806 2272Websites: www.mpoc.org.my, www.malaysiapalmoil.org

the oil of the future - my palm oil councilmpoc.org.my/upload/mpoc_full ar_2008.pdf · meetings...

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