The first Bio-diesel power electricity ready to operate

The Indonesia Minister of Energy and Mineral Resources (ESDM), Purnomo Yusgiantoro announced the operating of the first bio-diesel power electricity with capacity 10 MW in Bagan Besar, Dumai, Riau Province.

This power electricity is owned by Indonesia Electricity Company (PLN) and using fuel diesel (PLTD) as the energi before, but then the Germany company NMBH (Neue Halberstadt Maschinenbau GmbH),  installed the PLTD converter so posiblle to utilize the energy of pure vegetable oil derived from Crude Palm Oil (CPO).

Utilization of the converter as a tool to divert the use of fossil energy (fuel diesel) to renewable energi  in Dumai PLTD is the first in Asia. The success collaborative is the effort between the Directorate General of Electricity and Energy Utilization (DG LPE), the Ministry of ESDM, with the Neue Halberstadt Maschinenbau GmbH (NMBH) in the year 2007.

In that year NMBH - company which develop and application of fuel vegetable technology - begin installing the converter in PLTD Bagan Besar, Dumai. Now this is the time to campaign the utilization of bio-fuel in Indonesia.

"We know the world price of Crude oil is decline significantly. Likewise with the world price of CPO, therefore I request with exceeds of the CPO production is used for bio-fuel," said Purnomo Yusgiantoro.

The government itself had issued the ESDM Rule No. 32/2008 regarding the provision, utilization and administration commerce fuel vegetable (BBN) as an alternative fuel. One of the contents of the regulations is  setting the minimum staging obligation of using the fuel in the transport sector, industrial, commercial and generating electricity.

Hence, Purnomo also ask PT PLN (Persero) and PT Pertamina (Persero) to maximize absorption of CPO production for both power electricity and used as fuel by Pertamina.

Oil Palm Mill in Riau Province will stop the production

As much as 132 of palm oil mills (PKS) in Riau Province plan to stop the raw palm oil (Crude Palm Oil/CPO) production because the storage tank is full. Discontinuance also as a result of the inquiry weakness of CPO in commodities market.

Total capacity of CPO storage tank in Dumai is 220,000 metric tons and now filled more than 80% because it has not been sold yet. Many buyer especially from China and India have postpone the export causes of  the CPO price in the world commodity market continues to slump.

Head of Representative Office PT Sumber Sari Sejahtera Makmur, said their palm oil mills (capacity 4,000 tons) which located in Indragiri Hulu regency have excess the production capacity and has resulted has begun full. Actually, every day, the factory can process 800 tons of fresh fruit bunches (TBS), which can produce about 175 tons of CPO per day.

The current conditions have been more gravely. Previously all the CPO production is always sold out each day. If this condition still ongoing -  tank is full and without any buyers - estimated one week longer factory will stop production. The palm oil mills has to continue to produced during the abundant stock of CPO and they intended to temporarily stop buying oil palm plantation from farmers. This must be done to minimize losses due to the company's CPO prices continue to fall, while the stock is manufactured using long before the decline in prices has not yet been sold.

During the last three weeks there is no CPO export shipments from Dumai port because there are no buyers. China's buyer has to rescheduling the CPO agreements contract and India's buyer has to underwritten through restructuring, the number of purchase contracts.

The Indonesia CPO export markets down

Trade of crude palm oil (CPO) in international market is slowing down. Auction of 12,000 tons CPO into local market in the Joint Marketing Office of PT Perkebunan Nusantara Jakarta on Monday (27/10/2008), failed to sale. Eleven of domestic companies withdraw from the auction process. Reason is, price offered in the auction is still high around IDR 3,905-Rp 4,295 per kilogram (kg).

The government should be more proactive to develop new CPO export markets to reduce the number of domestic stock that continues to rise. Chairman of the Joint Entrepreneur Daily Kelapa Sawit Indonesia (Gapki) Derom Bangun in Jakarta, Monday, said, "Transactions are still running, but slowly. Demand is growing flagging, especially from the overseas market. "

From the total production of 17.2 million tons last year, domestic industries only  absorb around 4.5 million tons. These conditions make the national CPO market is very dependent on international price movements.

The future of Indonesian CPO exports are also be worried about. India as the country's second largest CPO exports in Asia is now set to consider the tariffs vegetable oil imports by 40 percent at November 2008. India vegetable oil producers demanded that the Indian government to raise the duties to protect domestic markets from the invasion import cheap products. According to the plan, the Government of India will decide this later on 3 November.

According to Executive Director of the Joint Industry Indonesian vegetable oils (GIMNI) Sahat Sinaga, CPO industry forced to survive at this time because there are no new requests. Employers are forced to continue to accommodate the processing of CPO because of the activities can not be stopped, while demand continues to wane. However, downstream CPO industry until now is still operating. Sahat said, oleochemical industries that produce various derivative products of CPO production is still as usual.

On the global crisis at 199,7 industrial commodities could benefit from the weakening of the rupiah against the U.S. dollar, but currently it has not happened. The tendency of weakening rupiah against the U.S. dollar during the past week it has not been able to raise up the price of CPO. "What happens now is because of weak demand. Not because expoter do not want to export. If in normal demand, certainly at this time is exportir feel the benefits because they buy in rupiah, and sell CPO in the U.S. dollar, "said Sahat.

Palm oil farmers are suffering

The palm oil farmers' life in west Sumatra are suffering due to the low price of fresh fruit bunches of oil palm (TBS). Until Sunday (26/10/2008), palm oil price in the Agam regency and Pasaman, West Sumatra, valued only IDR. 500 per kilogram

As a result of a decrease in the price of fresh fruit bunches (TBS) palm oil, palm oil farmers in some regions difficult to restore the credit of fertilizer. That happens because income from palm oil plunged.

The farmers generally take fretilizer's loan from cooperatives. The amount loan is between IDR 1.000.000 - IDR. 3.000.000, installments for two years. When the price of palm oil is still high, farmers usually do not facing problem to pay the loan. But as now when the price of palm oil is decreasing, often behindhand of the loan.

The previous price of palm oil is only IDR. 350 per kg and with this price, many farmers do not harvest the palm because the price does not match to the production costs. The palm oil traders said the mediator can not increase the buying price because factory aslo offer the low price.

Dozens of North Sumatra Coffee Exporters are threatened bankruptcy

Decreasing of the horticulture commodities' price in the international market in line with the global financial crisis to make tens of coffee exporters in the North Sumatra threatened gone out of business. The price of arabica coffee, which is a mainstay of export of North Sumatra is fall dramatic since last month

According to the Chairman of the Indonesian Coffee Exporters Association (AEKI), North Sumatra (North Sumatra) Suyanto Hussain, the price of Arabica coffee in the international market in a last month fall from US$ 3,800 per ton to be US$ 3,200 U.S. per ton. "The decline is still not over yet. Most likely price in the international market will fall again, due to global economy crisis still has not recovered," said Suyanto in Medan, on Tuesday (21/10).

He discloses, the loss exporters of coffee in North Sumatra triggered mainly because of the purchase coffee from farmers have done well before the financial crisis occurred. "We're buy coffee from farmers long before the crisis. If all of these stocks have sold should be no problem. But there still a lot of coffee that has not been sold. Purchase price from farmers when it is high enough, while the current selling price to our export markets have declined drastically, "He said.

The losses because exporters are not able to cover the difference between buying price from farmers with the selling price to the export market. Moreover, the main market of North Sumatra Arabica coffee is U.S., Japan and Europe, which most of theses countries affected by the global financial crisis most.

"In the last three years, more than two-thirds of North Sumatra Arabica coffee is export to the United States and Europe. The largest purchaser of North Sumatra's Arabica coffee in international outlets such as Starbucks. There is also export to Japan, but Japan's have also affected the global crisis," Suyanto said.

Suyanto said, from the 400 coffee exporters in North Sumatra, which registered in AEKI, currently only 60 exporters which is still active. "That is the amount of the active, they are threatened now gone out of business because of this crisis," he said.

According to Suyanto crisis in the countries of the North Sumatra's arabica coffee market has made consumers in these countries are to change the style to consume coffee. "People used to enjoy coffee at Starbucks outlets , now they prefer to buy coffee in the packaging. Far better to save expenditure, especially coffee is not a major need," he said.

Government is required to make a buffer agency for the commodities that have become the mainstay of Indonesia's income, such as coffee, rubber and palm oil. "Indeed, there must be a trading system so that farmers are not disadvantaged in a condition that the price continuously declined as now. There are a benchmark price which the government can prosecute certain commodities in the international market when prices fall. We may not be fully mechanism to the free market price is met speculator . Moreover, this is the speculator who now make a crisis occurs, "he said.

According to AEKI record, in September 2008 the export value of North Sumatra's coffee has reached 10.4 million U.S. dollars, with details of the volume, Arabica coffee exports reached 2,575 tons, 341.44 tons of robusta coffee, and coffee in the form of packages reached 138.9 tons.

Widdows warns worst is yet to come for box trades

NEPTUNE Orient Lines’ boss Ron Widdows is warning of grim times ahead for the container trades, with ships laid up and orders cancelled as the industry heads into an unprecedented slump.

While the situation is not so bad now, the worst is yet to come, Mr Widdows told Lloyd’s List in an interview after yesterday announcing swingeing cuts in capacity.

“We are in for a relatively unpleasant 18 months to two years,” he said.  NOL’s container shipping arm APL has already started to re-let some ships back into the market over the last two months, and it will be laying up vessels, he said. “Others will have to do the same. From the industry standpoint, vessels will be idle.”

Mr Widdows, who was attending the graduation ceremony of the Maritime Economics and Logistics students of Erasmus University in Rotterdam, said he was pleased that NOL only has eight newbuildings on order, and that “they are not really big”. These are due to enter service in 2011. The orderbook is “relatively small compared to the three largest carriers in the world”.

“Every ship we employ can be employed anywhere on the planet,” Mr Widdows said.  He added that the industry is about to see an “object lesson in the dynamics of the larger ship”.

The costings only work when these gigantic ships are full and desperation could creep in when trying to fill these behemoths, he said.  Mr Widdows added that “it is reasonable to expect that a lot of ships will not be financed”.

Those that were expected to be completed in 2011-2012 may never be built.  “It is a good thing if that happens,” he said, but added that it will not help the situation next year. The true impact of the financial crisis is still to be felt, Mr Widdows said. Inflation is significantly higher than expected and many companies would go out of business. The fortunes of the industry have changed dramatically in a short space of time, with trading “dropping off a cliff”.But this was in anticipation of new tonnage entering service, not the impact of the global financial turmoil, Mr Widdows said.

The Asia-Europe trade was going to be “very challenging for a very long time”.  Market conditions have become so bad that the abolition of the conference system last weekend has had no effect on the market at all, Mr Widdows said. If freight rates were high and ships full, this may not have been the case.

But in the current climate, the end of the conference system is not really relevant. Right now, the 25% reduction in capacity that APL announced earlier this week as part of the New World Alliance servce shake-up is the focus of his attention. It is time to hunker down, and keep costs under control, he stressed.

Mr Widdows is pragmatic on the NOL’s failed bid for Hapag-Lloyd.“It is very good that there is finality,” he said. All parties could now focus on getting their companies in shape to deal with the downturn that will probably be here for the next few years, he said. Feedback from the investment community, and those in the industry, has been “pretty positive”. It was easy to make sense of the NOL decision, he added.

“We made an assessment on how much [Hapag-Lloyd] is worth on what we thought the future looked like. What the other party bid is not relevant and what it is worth to somebody else is not relevant.”

Source : http://www.lloydslist.com

40 Cargo Companies no longer operate in Semarang

Around 40 cargo companies or freight forwarder companies from a total of 212 company members and Forwarder Joint Expedition of Indonesia (GAFEKSI) Region, Central Java has no longer operate due to the decline of export and import transactions that is the impact of the global financial crisis.

According to Soejanto - Chairman of GAFEKSI Region Central Java, the decreasing of export-import transactions has impact the volume transportation of cargo company by exceeded 50 percent down.

The global financial crisis make the purchasing capacity of foreign markets are weaken and as a result many of the the export transactions has been delay or cancell, especially from Indonesia to the United States and some European countries. "Many orders for the export of goods that was already done eventually delayed signing the contract and then stored in the warehouse," said Soejanto.

For example, one of the exporter company PT Makmur Trigita is  also experienced in decrease in the volume of transport for both export and import of 300 containers per month into only 50-60 container in the last one month.

Abdul Aziz, Director of PT Indo Samudera Perkasa - a furniture transportation company - said the transpotation volume of his company has down half from 10-15 container for export and 20-30 for import in a month.

Facing this unstable situation, many of the exporters are attempting to overcome the global crisis by searching the new market other than the U.S. and Europe. They will focus on the domestic market.

Global slowdown takes a bite out of APL and TNWA capacity

Singapore: The New World Alliance (TNWA) member APL has announced plans to par back the vessels operating on routes to and from Asia in response to increasingly challenging conditions in the major container trades brought about by the current economic environment.

The company is reduce capacity in the Asia-Europe trade by close to 25%, on the Transpacific trade by around 20% and restructure its Inter-Asia services.

‘The traditional seasonal softening of demand in the main container trades has been compounded by the global financial crisis and economic slowdown,’ explained APL President Eng Aik Meng. ‘ In response to these factors, APL is taking quick and decisive action to adjust to this reduced demand and reconfigure our service networks to ensure we continue to meet our customers’ container shipping needs.’

Accordingly, APL and the other TNWA members Hyundai Merchant Marine (HMM) and Mitsui OSK Lines (MOL) are to suspend their existing CEX (China Europe Express) service running between China to North Europe and add additional calls to its SCX (South China Express) service beginning November 2, 2008. The revamped SCX service will deploy nine vessels calling at the port rotation: Ningbo, Yangshan, Xiamen, Hong Kong, Chiwan, Singapore, Colombo, Southampton, Zeebrugge, Hamburg, Rotterdam, Salalah, Singapore, Hong Kong and Ningbo.

APL itself intends to use similar tactics for its Transpacific offerings, incorporating its PS3 (Pacific South Express 3) service into its PCX (Pacific China Express) service, that will call at: Ningbo, Yangshan, Kwanyang, Pusan, Long Beach, Oakland, Pusan, Kwanyang, Ningbo.

The liner arm of Neptune Orient Lines (NOL) has also suspended the PSW (Pacific South West) service and its revamped SAX (South Asia Express) service will now make additional calls at Yantian and Chiwan. The revised SAX rotation is: Singapore, Yantian, Chiwan, Singapore, Kaohsiung, Chiwan, Singapore.

Additionally, APL’s PCE (Pacific Coast Express) will omit calls at Xingang and Nagoya, but include an additional Pusan call in the eastbound direction. The revised coverage will call at: Qingdao, Pusan, Yokohama, Singapore, Oakland, Dutch Harbor, Yokohama,  Pusan, Qingdao. Xingang is now covered by direct APL feeder service, which also calls at Dalian and Pusan.

With regard to its Intra-Asia portfolio, APL has announced that its SSX (Singapore Subcontinent Express) service has been suspended and its route will be covered by a combination of the CSS (China Singapore Service) and the CMX (China Middle East Express).

The CSS will provide additional coverage of Shanghai and Ningbo, while the CMX has been upsized to a five ship loop with a revised rotation of Shanghai, Hong Kong, Chiwan, Jebel Ali, Nhava Sheva, Colombo, Singapore, Shanghai.  [22/10/08]

Source : http://www.seatradeasia-online.com

NOL Drops Out of Race To Buy Hapag-Lloyd

SINGAPORE, Oct 11, 2008 (AFP) - Singapore's Neptune Orient Lines (NOL) has dropped out of the race to buy German container shipping line Hapag-Lloyd, NOL said.

NOL, which is 66 percent owned by Singapore sovereign wealth fund Temasek Holdings, said in a statement late Friday "it is no longer engaged in the bidding process for the sale" of Hapag-Lloyd.

The Singapore firm's binding offer submitted on September 26 has lapsed, NOL said. Hapag-Lloyd is the container shipping unit of German leisure and shipping group TUI.

"NOL will now put all its energy into managing through the current container shipping downcycle and providing our customers with the service they have come to expect of our organisation," NOL group president and chief executive Ron Widdows said in the statement.

NOL had not given details on the value of its bid but said that a successful acquisition would have created the world's third biggest container carrier.

"We submitted a bid that we believed fully valued Hapag-Lloyd and which addressed the challenging market conditions facing the container shipping industry," Widdows said.

Source : http://news.asiaone.com

Tin Sand Exported Be Defeated

Around 30 containers containing of tin sand which ready to export being defeated by the Indonesia Directorate General of Customs and Excise. These tin sand are planning to export to China and Malaysia and may losses tax around of Rp 27,648 billion.

The export of tin sand mixed with natural sand has been detention for at least in the last three months. However, this new case can be published by given the arrest of suspects takes time. The sand tin is imported from Bangka, Ketapang, and Surabaya and gathered in Jakarta then exported with the camouflage of various documents

Based on intelligence activities of Indonesia Directorate General of Customs and Excise and the Office of General Services (KPU) BC Type A Tanjung Priok, the 30 containers are sent by using three export goods notification (PEB) documents separately.

The first export is planning to export by CV LA using MV Reflection Voy N067 of 15 containers - around 384 metric tons - and consign to Fuzhou Shengsheng Mining Industry Co. Ltd., Fujian, China.

Then, BC is also holding 10 container tin sand - around 200 metric tons - will be exported by CV IB on MV Cape Norman Voy 8007 and consign to LSK Enterprise Sdn Bhd, Perak, Malaysia.

The last 5 containers tin sand - around 120 metric tons - is planning to export by PT LMI  on Barent Strait Voy 816N and consign to Maoming Kaisheng Development Co. Ltd., China.

According to Director of Technical Directorate General of custom BC Kuswandono Agung said, sand tin and natural sand is a type of goods that are prohibited to be exported. "It was tested at the Central Testing and Identification of Goods, Jakarta, and the laboratory of PT Timah Tbk," said Agung.

In addition to holding sand tin, the Directorate General is also holding 170 BC packaging contains various Chinese products, ranging from toy dog bone, textiles, garment, to the electronic equipment.

In fact, there is also a packaging of falsified import documents. When opened, only the box containing drinks, but the inside contains thousands of canned beer.

Anwar emphasized, the Directorate General BC restrict the possibility of the influx of imported products from countries that lost the market in the United States.

Mode of smuggling more varied. Textiles, for example. These Chinese products are imported from Port Klang, Malaysia to Kuching. Then, go to Pontianak via land and sent through the inter-port.

Many Container Detained in Singapore During Idul Fitri Holiday

Indonesia port managers should be cautious of stagnation in some Indonesia sea/container ports due to most of container trucks/trailer do not operating from H-4 up to H+1 of Idul Fitri 1429.

Based on the information from the Board of Sea Transportation Service Indonesia (Depalindo), many cargoes are detained in Singapore Port and waiting for activities of several seaports in Indonesia back to normal, especially in Tanjung Priok, Jakarta. These goods are detained in Singapore and will send by feeder v essel upon operation in Tanjung Priok, Jakarta back to full operation.

Total density in Jakarta International Container Terminal (JICT) and Koja Container  Port (both in Jakarta) can reach 1-2 weeks and impact of the stagnation due to the long holiday can reach three months.

In normal conditions only four vessel do the loading and unloading at Tanjung Priok, but in high density condition, can be reached six vessel. One vessel can carry 2,000 container so if six vessel load and unloading in a day of course, the container yard can be full.  Stagnation in the port occurs when the level of yards occupancy ratio above the 70 percent threshold.

One of key factor to reduce the sea port stagnation is to operate the trailer without delay right after H+1 of Idul Fitri. Trucks container are expected to haulage the container immediately from container yard to some temporary container yard or factories in various places.

The effect of prohibiting trucks operate during Idul Fitri have been criticized, especially in point of the port that is not used during the long holiday.

Cocoa Exports From North Sumatera Rose 104%

It seems the North Sumatera cocoa exporters  continue to increase their export due to cocoa price  in the international market is estimated to continue to rise, which is about U.S. $ 2,588 per ton. The impact of this as a decreasing supply of cocoa, due to some countries and producers to decrease the  production. A decrease in production in other producer countries such as Ivory Coast have occurred since November 2007 and since then exports from Indonesia, including North Sumatra, have increased significantly.

A decline of cocoa production is caused not only a conflict in Ivory Coast country, but also pest attacks in the South Sulawesi. South Sulawesi is the region's largest cocoa producer in Indonesia, as one of the country's main cocoa producer. Based on data of the Certificate of Origin, during the January-August 2008 cocoa exports from North Sumater has reached U.S. $ 50,99 million, or an increase of 104.31% compared to the achievement of the year 2007 in the same period worth U.S. $ 24, 96 million. In addition, the volume of cocoa exports also increased 63,42%. That is up from the previous 14,196.96 tons in January-August 2007, became 23,300.89 tons in the same period in 2008.

Leap of cocoa inquiry - which have high demand - pushing the price of cocoa in the New York Commodity Exchange (NYCE), United States, moving up. Based on the data of the Indonesian Bureau of Commodity Trade, the cocoa price in the NYCE currently reached U.S. $ 2588/ton, while in the spot market in Makasar cocoa price is DR 22,283/kg.

The price of cocoa will be even higher if the supply of this crisis continues, as cocoa considering in many countries have been utilizing cocoa for  commodities other than food.

37,700 Ton CPO Exporting From North Sumatera in a day

The province of North Sumatra export 37.700 ton of Crude Palm Oil (CPO) on Monday 28/9 through Belawan seaport.

This CPO is shipped out on tanker MT Cielo Di Roma to Kraci India and tanker MT CPO Norway to Rotterdam Nederland. The Cielo Di Roma carry an amount of 22.700 ton, whilst the MT CPO Norway carry 15.000 ton of CPO.

Belawan port integrated piping contributed in this export. The integrated piping is owned by Belawan Seaport Administrator (Pelindo I) and operated by PT. IBP.

A day earlier, 32.000 ton of premium arrived from Singapore. Premium gasoline owned by Pertamina shipped by Panama registered tanker MT. Gandari.

These information is collected from Integrated Sea Port Service Office (PPSA) of Pelindo I Belawan branch on Monday 29/9.