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9.

Palm Oil Industry and Competition 9.1 Overview

Productive Planted Areas It is estimated that in 2004, there are approximately 1.9 million rais of oil palm planted areas, of which 95% are in Krabi, Surat Thani and Chumporn provinces. Products/Production Per Rai In 2004, FFB production decreased 4% from 2003 to 4.66 million tons. The lowest production was 188,998 tons in January and the highest was 531,151 tons in May, making the CPO production for the whole year at 820,838 tons, or a 5% decrease from 2003. Figures from the Department of Internal Trade showed that the CPO stocks at the end of 2004 were 151,122 tons compared to 114,953 in 2003, and an average Oil Extraction Rate of 17.6% compared to 17.8 % in 2003. Market Situation and Prices In 2004, the average CPO price in the world market was higher than in 2003. In March, CPO price in the Malaysia Derivatives Exchange Bhd. : 3rd Month reached its highest at 2,003 RM per ton; it subsequently fell to the lowest at 1,368 RM per ton in July. The average 2004 CPO price in the Malaysia Derivatives Exchange Bhd. : 3rd Month was 1,622 RM per ton, compared to 1,518 RM per ton in 2003, an increase of 6.9%. Domestic CPO price increased in the same direction as the world price with production in 2004 decreasing slightly from 2003. But the volume was considered high, leading to high stock of CPO especially at the year-end, resulting in an over supply in the industry. Figures from the Department of Internal Trade showed that in 2004, the domestic price of FFB fluctuated between 2.84 – 3.99 Baht per kilogram, compared to 1.96 – 4.03 Baht per kilogram in 2003, and CPO price fluctuated between 17.04 – 21.96 Baht per kilogram, compared to 15.51 – 25.10 Baht per kilogram in 2003. The annual average price of FFB and CPO was 3.38 Baht and 20.17 Baht per kilogram respectively, compared to 2003 which was at 2.78 Baht and 18.28 Baht per kilogram respectively. The average price in 2004 increased 21.58% from 2003 for FFB and 10.34% for CPO. However, it is forecasted that the price of palm oil in 2005 will depend to a significant extent on domestic production. FFB output in 2005 is expected to increase 15% from 2004 due to the increase of production planted areas of 300,000350,000 rais. The yield per rai may be not very productive because of drought condition prevailing in the middle and lower parts of the South in 2002 and 2003 reducing the level of rainfall to merely 1,400 millimeter annually, which was insufficient for the need of oil palm. In 2005, it is forecast that there could be a

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Lst 04  

LST_2004 LAM SOON (THAILAND) PCL Annual Report 2004

Lst 04  

LST_2004 LAM SOON (THAILAND) PCL Annual Report 2004

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