Issue 1 - American Palm Oil Council

MARKET BriefsOf the 46% consumed as liquid milk, less than 30% is packaged. Only 800 of 3,700cities and towns are served by the milk distribution network that dispenseshygienically packed, wholesome, quality pasteurised milk.One estimate is that the packaged-milk segment will double in the next five years,giving both strength and volume to the modern sector.The effective market is confined to urban areas, inhabited by about 30% of the population.This means that about 350 million people consume an estimated 50% of the milk produced.There is competition by way of companies like Nestle, Dynamix, Britannia, Heritage Foods and Paras setting up collection centresat village level, providing services to farmers in certain areas, collecting milk and selling branded packaged milk to consumers.This has helped farmers reap the benefits of increased competition and demand, which is also helping them toconsolidate their position and expand production.They further receive information on clean milk production.Source: Ag PerspectiveSOYBEAN CONSUMPTION UP IN ASIAEven with heavy losses in the swine sector from Blue Ear disease, China isexpected to consume 10.8 million tonnes (55% more) soybean meal in2007/08 than in 2003/04.Consumption of major vegetable oils is forecast to reach 24.33 million tonnesin 2007/08, or about 1 million tonnes more than in 2006/07 and 5.38 milliontonnes more than in 2003/04.Record volumes of vegetable oils will be imported because China had poor crops of soybean and rapeseed last year.The USDA expects South Korea, Indonesia, Malaysia, Philippines, Thailand and Vietnam to consume 13.64 milliontonnes of soybean meal in the current marketing year, or 29% more than the 10.6 million tonnes in 2003/04.Thiswill be met through meal imports or soybean for processing.India’s soybean meal demand, meanwhile, is forecast by USDA to grow by over 11%.Source: Ag PerspectiveIMPROVED TRADE TIES IN SOUTH ASIAWith effect from Jan 1, India has scrapped or reduced import duty on more than 4,800 products from Pakistan,Bangladesh, Sri Lanka, Nepal, Maldives and Bhutan, in a bid to expand regional trade.Duty reductions range from 16-40% to almost zero for some items like milk, meat, fish, and dried fruit from the LeastDeveloped Countries (LDCs) of Bangladesh, Nepal, Bhutan and Maldives.The same items from Pakistan and Sri Lanka now attract a reduced duty of 12% instead of 20% previously.As these countries are not major players in the world meat or milk business, the changes may not have much impactunless foreign investors import ingredients, add value and use the agreement to export value-added products to India.Duties on pharmaceutical products, cement, fertiliser and lime have been reduced to 10% for imports from the LDCsand 12.5% from Pakistan and Sri Lanka.Through the agreement, India is also looking to enhance trade ties with Pakistan, particularly with a view to exportingtea.Their overall bilateral trade is currently worth US$4 billion.Source: Ag Perspective44GLOBAL OILS & FATS BUSINESS MAGAZINE • VOL.5 ISSUE 1, 2008