Malaysia attacks U.S. soya bean farmers

Malaysia attacks U.S. soya bean farmers

KUALA LUMPUR (AFP): Malaysia, the world's biggest palm oil producer, complained Tuesday that soya bean farmers in developed countries were depressing prices in the international oil and fats market.

Primary Industries Minister Lim Keng Yaik said a glut of soya oil in the world market towards the end of last year pulled down palm oil prices by about US$100 a ton in the last two months.

"Price of palm oil has been falling for the last two months although it is still at a premium to the other oils in the international market," he told a news conference after opening an international palmoil conference.

"This is mainly because it has been dragged down by the falling prices of soya oil," he said. "Soyabean oil has gone below near production cost. At $480 a ton, soya oil price is at its lowest in 11 years."

Lim slammed soyabean growers in the United States and other developed nations, saying that an oversupply of the crop had "almost killed the international oil and fats market.

"Developed countries should not oversupply and then dump their soyabean oil in the international market. Unfortunately, there is no anti-dumping law about this matter," he said.

He urged soyabean growers to "think twice of planting soya crops this year.

"If not because of (government) subsidies, they would have been out of the market a long time ago. The irony is that we developing countries have to tax our industry, yet we can compete in the global market," he added.

After peaking to over 2,400 ringgit ($632) a ton last year, Lim said palm oil prices were now hovering around 2,000 ringgit, which is still at a premium of about $60 to $80 compared to other oils.

"Palm oil prices should maintain -- although not at high levels like last year -- at around 1,800 to 2,200 ringgit per ton," he said.

But he warned that palm oil faced the threat of being replaced by other cheaper oils.

"If we stay at too high a premium for too long, we may be replaced in the international market," he said. "1998 for palm oil was a phenomenal year but that phenomena will be very difficult to maintain."

Malaysia accounts for about 50 percent of the global output and 22 percent of the international oil and fats trade.

Earlier in his speech, Lim said Malaysia's palm oil export earnings surged to 22.5 billion ringgit last year, up 86 percent from 12.1 billion in 1997, making it the second largest export earner after electronics.

The country had a 64.5 percent share of the world palmoil export trade last year, he said.

Although output dipped by about nine percent to 8.3 million tons in 1998, Malaysia remained the world's largest producer, followed by Indonesia accounting for 30 percent of global output.

Lim noted that experts predicted global demand for palm oil to reach 24 million tons by 2005, and surge to 44 million tons by 2020, with Malaysia and Indonesia expected to supply about 70 percent.

"This is not adequate and action has to be taken to enable us to meet the increasing global needs for palm oil and ensure a steady supply of the oil to the world," he said.

Lim said a "smear campaign" by the American Soyabean Association against tropical oils had lost steam but the palm oil sector still faced hiccups in new markets.

He urged local producers to tap downstream industries, saying that oil palm waste could be used to develop the pulp and paper industry.

Some 1,000 delegates from 30 countries are attending the six- day biennial conference, themed "Emerging Technologies and Opportunities in the Next Millennium," aimed at charting new directions for the palm oil industry.