It has switched from being a major exporter of soybean products to a major exporter of raw soybeans. By contrast, in Argentina the tax system penalizes the export of unprocessed beans but gives a rebate to exporters of meal and oil. Most of the new capacity operates at a far lower cost than the older and smaller-scale mills in Brazil, which are also not as well placed geographically. It takes a minimum of three years between clearing the land and first harvest, with breakeven not occurring until year 7 or 8, longer than the typical loan period in Asia. A typical plantation is expected to last 25 years.
Trees are vulnerable to drought and other vagaries of weather.
Turmoil in some regions has resulted in some borrowers defaulting on loans and has caused concerns among other shareholders. While palmoil exports are generally in US dollars, which has alleviated the impact of the financial crisis, some operators have been affected by export restrictions. Consumption of palmoil is also expected to rise sharply, due in part to the increase in available supplies, decrease in prices, and improved financial outlook in some importing countries. Exports of palmoil are expected to remain unchanged. Total disappearance is expected to rise to 13.5 Mt for 1999-2000, from 11.9 Mt the previous year.