MPOC https://www.mpoc.org.my Malaysian Palm Oil Council (MPOC) Fri, 29 Mar 2024 01:40:26 +0000 en-US hourly 1 https://wordpress.org/?v=6.4.3 https://www.mpoc.org.my/wp-content/uploads/2024/02/mpoc-logo-white-bg-150x150.png MPOC https://www.mpoc.org.my 32 32 CPO price may remain volatile https://www.mpoc.org.my/cpo-price-may-remain-volatile/ https://www.mpoc.org.my/cpo-price-may-remain-volatile/#respond Fri, 29 Mar 2024 01:20:08 +0000 https://www.mpoc.org.my/?p=60352

KUALA LUMPUR: TH Plantations Bhd (THP) cautioned over potential volatility in commodity prices, projecting crude palm oil (CPO) prices to fluctuate between RM3,500 and RM4,000 per tonne in 2024, compared to the average of RM3,809.50 per tonne in 2023.

“Although CPO prices were lower than the previous year’s historic highs, they remained firm in 2023 due to demand from major importers China, India, the EU, and Indonesia, coupled with the expected impact of El Nino on the production of competing edible oils in the second half of 2023.

“Malaysia also saw an overall modest increase in production, as the manpower crunch faced in previous years was gradually resolved with the return of foreign workers. While stockpiles increased year-on-year, higher domestic consumption has helped to ease supplies,” he said.

India maintained its position as Malaysia’s largest palm oil export market last year for the 10th consecutive year since 2014, with 2.84 million tonnes or 18.8 per cent of Malaysia’s total palm oil exports, followed by China at 1.47 million tonnes (9.7 per cent).

India maintained its position as Malaysia's largest palm oil export market last year for the 10th consecutive year since 2014, with 2.84 million tonnes or 18.8 per cent of Malaysia's total palm oil exports, followed by China at 1.47 million tonnes (9.7 per cent).- AFPIndia maintained its position as Malaysia’s largest palm oil export market last year for the 10th consecutive year since 2014, with 2.84 million tonnes or 18.8 per cent of Malaysia’s total palm oil exports, followed by China at 1.47 million tonnes (9.7 per cent).- AFP

Other significant importers were the European Union 1.07 million tonnes (7.1 per cent), Kenya 0.92 million tonnes (6.1 per cent), Turkiye 0.88 million tonnes (5.8 per cent), Japan 0.55 million tonnes (3.6 per cent) and Pakistan 0.50 million tons (3.3 per cent). These seven main markets contributed 8.23 million tonnes or 54.4 per cent of Malaysia’s total palm oil exports in 2023.

Malaysia exported 24.49 million tonnes of palm oil and palm-based products and generated an income of RM94.95 billion in 2023. In 2024, export revenue from palm oil and palm-based products is expected to reach RM110 billion.

Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid opined that CPO price should be fairly stable throughout the year.

However, he said between now until October, production cycle is expected to go up which then might affect the prices due to higher supply.

He added that the outlook for CPO price should be in the region RM3,800 to RM3,900 per tonne by end of 2024.

“But having said that, there is great potential in the palm oil sector in relation to the renewable energy space.

“Areas like waste-to-energy and sustainable aviation fuel (SAF) would mean there are greater use of palm oil,” he told Business Times.

Moving forward, Afzanizam said factors such as aging trees, the necessity of replanting, increased fertiliser costs, and labor supply are anticipated to impact CPO prices.

Meanwhile, Tradeview Capital fund manager Neoh Jia Man said CPO prices could potentially breach the RM4,000 per tonne level this year.

He noted that this could be driven by the impact of drier weather on supply growth.

Additionally, he said higher biodiesel consumption in neighbouring Indonesia, as the B35 blending mandate has been fully adopted, may also play a role.

“We believe that Malaysia’s CPO prices have largely reflected the sluggish demand from China and high inventory levels in end-user markets.

“Looking ahead, we are concerned about the potential slowdown in consumer demand globally and intensified competitive pressure from soybean oil due to a strong harvest in the US this year,” he added.

Malaysian Palm Oil Board director-general Datuk Dr Ahmad Parveez Ghulam Kadir said higher export revenue from the oil palm sector is expected this year.

“Our palm oil is poised to remain a key contributor to the nation’s economy this year. We anticipate an increase in export revenue from palm oil and palm-based products.

“The rise in revenue is expected due to higher demand from our primary importers, notably China and India, as well as improved prices of CPO,” he said in his column in the Business Times recently.

Ahmad Parveez said that similarly, palm oil exports may increase by 3.3 per cent to 15.6 million tonnes in 2024, as opposed to 15.1 million tonnes in 2023, attributed to expectedly higher export demand, especially from China.

He added that the B35 implementation (35 per cent palm oil blend in biodiesel) in Indonesia and the high crude oil price are expected to increase export demand for Malaysian palm oil.

MPOB foresees the price of CPO to average higher at between RM3,900 per tonne and RM4,200 per tonne this year, which will support the country’s income from palm oil exports, he said.

“The expected higher average price of CPO may be mainly due to the tight palm oil supply as a result of unfavourable weather conditions, which are expected to remain at least until April 2024. Malaysia’s palm oil stocks, expected to be below two million tonnes this year, will also support the price of CPO,” he said.

Ahmad Parveez said that Malaysia is recording better production of CPO, although the numbers are still below the actual production potential level.

In 2023, CPO production recorded an increase for the second year in a row to 18.55 million tonnes compared to 18.45 million tonnes in 2022 and 18.12 million tonnes in 2021.

The higher CPO production of 0.5 per cent in 2023 was partly contributed by the improved estate’s yield performance of fresh fruit bunches (FFB) during the year, up by 1.9 per cent to 15.79 tonnes per hectare compared to 15.49 tonnes per hectare in the previous year.

In 2024, CPO production is expected to increase marginally by 1.1 per cent to 18.75 million tonnes from 2023’s production due to an improvement in the labour situation and increased fertiliser application, he said.

“However, CPO production is expected to remain below potential due to the El Nino event, which is expected to affect FFB production in the second half of this year,” he said.

Headwinds ahead

THP’s Mohamed Zainurin cautioned about existing headwinds, notably the potential slowdown in China’s economy owing to stress in the real estate sector, despite some alleviation of inflationary pressures globally.

To leverage the favourable industry outlook, THP plans to sustain its focus on operational efficiency to enhance yields and profitability, including rehabilitating specific plantation assets, he said.

Mohamed Zainurin also said the company is open to the possibility of unlocking the value of its plantations as well as continuing its mechanisation initiatives in 2024, including the option of a leasing programme for all infield collection machines.

THP chairman Datuk Dr Ahmad Kushairi Din highlighted the anticipated impact of the El Nino phenomenon in 2024, forecasting decreased fresh fruit bunch (FFB) production due to rain deficits.

Last year, the company’s FFB production increased by 13.2 per cent to 787,741 MT from 695,824 MT in 2022. Production of FFB increased across all regions, resulting in a higher yield of 15.18 Mt/ha in 2023 compared to 13.21 Mt/ha in 2022.

In his chairman statement, Ahmad Kushairi emphasised the continuation of robust demand in 2024, driven by the persistently strong demand for food and biodiesel, following the trend observed in 2023.

“Moving forward, I am pleased to inform that the board has approved THP’s five-year strategic business plan (2024-2028), which serves as a roadmap for mapping our journey for sustainable growth and profitability,” he said.

Ahmad Kushairi added that this strategic plan is anticipated to drive the company’s growth trajectory over the next five years.

Source : NST

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Opportunities  for Malaysian Palm Oil Players in China https://www.mpoc.org.my/opportunities-for-malaysian-palm-oil-players-in-china/ https://www.mpoc.org.my/opportunities-for-malaysian-palm-oil-players-in-china/#respond Mon, 25 Mar 2024 04:28:06 +0000 https://www.mpoc.org.my/?p=60305

Import of Palm Oil Recovered in 2023 but Below Expectation

Import of palm oil in China for the year 2023 rebounded significantly from 2022. From 4.94 million MT recorded in 2022, the palm oil import volume surged by 14.0% or 693,000 MT to 5.64 million MT in 2023.  Nevertheless, last year’s import volume was far from the 6.46 million and 6.38 million MT recorded in 2020 and 2021, and MPOC’s forecast of 6.11 million MT (published in the October 2023 issue of Palm Pulse magazine).

Table 1: Annual Import of Palm Oil in China (2019-2023) (‘000 MT)

Origin

2019

2020

2021

2022

2023

Change (%)

2023 vs 2022

Indonesia

5,253.2

3,746.7

4,700.6

3,351.1

4,286.4

27.9%

Malaysia

2,284.5

2,698.8

1,668.4

1,589.4

1,345.3

-15.4%

Other

14.3

16.0

8.1

3.4

5.4

57.2%

TOTAL

7,552.0

6,461.5

6,377.1

4,943.9

5,637.1

14.0%

Source: Chinese Customs

Further assessment of the fractions imported by China shows that both RBD Palm Olein (PL) and RBD Palm Stearin (PS) remain the major fractions imported, accounting for 99.5% of total palm oil imported under the HS code 1511. As shown in Table 2, we can see that the lower-than-expected growth of palm oil import could be attributed to the lower growth of PL import volume, where its import volume was 300,000 MT lower than 2020 and 2021’s volume respectively, despite the growth of 27.1% against 2022 level.  However, the major contributing factor to the lower growth of the total PO import was the drop in PS import, where import volume extended its downtrend in 2023 to only 1.31 million MT, a drastic drop of 15.1%.

Table 2: Palm Oil Import by Products in China

Products

2019

2020

2021

2022

2023

Change (%)

2023 vs 2022

PL

5,532.3

4,606.8

4,620.1

3,386.0

4,304.4

27.1%

PS

1,939.2

1,805.5

1,725.3

1,537.2

1,305.2

-15.1%

CPO

49.3

15.7

0.1

2.1

0.0

-99.0%

Other PO

31.2

33.5

31.5

18.6

27.5

47.3%

TOTAL

7,552.0

6,461.5

6,377.1

4,943.9

5,637.1

14.0%

Source: Chinese Customs

Being the most price-competitive and versatile vegetable oil, it would be logical that the demand or consumption of palm oil increases in tandem with the total demand of oils & fats in any particular net importing country. In this case, the total consumption of oils & fats in China grew by 5.7% or 2.26 million MT y-o-y, from 39.68 million MT to 41.94 million MT last year, which is also higher than the 40.90 million and 41.80 million MT of oils & fats consumed in 2020 and 2021 respectively.  In other word, the demand for PO was unable to recover and at the same time grow in tandem with the total oils & fats consumed in 2023, as the significant growth witnessed on the import of PL was merely just a partial recovery of the market share that lost to other competing oils and fats in 2022 when Indonesia banned the export of palm oil in Q2 of 2022.

While one would think that the demand for PL was being affected by the increased supplies of soybean oil (SBO) (import+output increased by 750,000 MT), the price discount of PL against SBO was at an average of RMB1,074/MT in 2023, against the premium recorded in 2022 at RMB212/MT.  This indicates that there is/are other competing oil(s) that might have impacted the PL demand.

Besides the lower-than-expected recovery of PL import, the decline of PS’s import for the 4th consecutive year in China also contributed to the lower import growth in China’s total palm oil import in 2023, especially when the catering sector’s revenue recorded a strong recovery with an increase of 20.4% y-o-y.

So, what could be the contributing factors to these phenomena?

Factors Contributing to the Lower Growth

a. Recovery of Rapeseed Oil and Sunflower seed Oil Supplies in 2023

Due to the bumper harvest of rapeseed and sunflower seed in Canada and Ukraine/Russia in the 2022/23 marketing year, the supplies of these 2 oilseeds and oils to the world market increased substantially.  This has led to the recovery of rapeseed, rapeseed oil, and sunflower seed oil imports in China last year (Table 3). Total supplies of locally produced and imported rapeseed oil jumped significantly by 22.8% and 90.4% y-o-y respectively, while the import of sunflower seed oil surged 176.0% in 2023. These brought the total supplies of rapeseed oil (RSO) and sunflower seed oil (SFO) to 8.48 million MT, an increase of 51.3% or 2.88 million MT against the volume recorded in 2022.

Such a drastic jump in the supplies of these 2 types of soft oils eroded the market share of other oils & fats, which in this case has also limited the increase of PO demand and import in the same year. 

Table 3 – Supplies of Rapeseed Oil and Sunflower seed Oil in China (2022 vs. 2023)(‘000 MT)

Veg Oil

Source

2022

2023

Change (Vol.)

Change (%)

Rapeseed Oil

Local Output

3,629

4,458

829

22.8%

Rapeseed Oil

Import

1,061

2,020

959

90.4%

Sunflower seed Oil

Local Output

307

329

22

7.2%

Sunflower seed Oil

Import

605

1,670

1,065

176.0%

TOTAL supplies

 

5,602

8,477

2,875

51.3%

Source: Oil World

b. Ongoing Substitution of PL and PS by Shortening and Hydrogenated Palm Stearin

Import of shortening and hydrogenated palm stearin (HPS) in China has recorded a significant jump since Indonesia adjusted its palm products export levy and duty structure in January 2021, and coupled with the duty-free imposed on these 2 products under the ASEAN-China FTA agreement, these products became very competitive in price since 2021.

According to the data released by Chinese Customs, the import of shortening jumped significantly since 2021 (Chart 1). Last year, the total import of shortening amounted to 1.03 million MT, an increase of 30,000 MT from 1.00 million MT recorded in 2022. What is more important is that instead of being used in the bakery sector, the majority of these shortenings imported by China were mainly meant for food and non-food processing sectors with most of them being sold as frying shortening with different melting points.  Hence, these shortenings have the same physical properties and function as various palm fractions shipped in bulk, and being applied as ingredients or feedstock in products such as hotpot soup stock, instant noodle frying, and candle wax production, to partially replace PL and some volume of PS.

Although the delivery of shortening involves additional costs on processing and packaging as compared to the bulk, the discount of the product cost (shortening) against PL was so attractive that it was able to offset the additional packaging cost and still cheaper than PL. Furthermore, boxes or drum packaging are preferred by small manufacturers as most of them do not have or are not willing to put up storage tanks to stock oils delivered by tankers.   

This led some Chinese users to switch from bulk to carton delivery as the discount is huge enough to spend an additional cost to hire manpower for unpacking the shortening and also the skin-lost while unpacking, subsequently leading to a sharp increase in shortening import in 2021. 

Chart 1 – Annual Import of Shortening in China (2019-2023)

 Source: Chinese Customs

Since most of the increase in shortening imported by China is meant to substitute PL and PS, it could be deduced that, after excluding the shortening that was designated for the bakery sector at 300,000 MT per annum, there is an estimated 730,000 MT of shortening imported in 2023 were used to replace PL and PS.  If taking into account the import volume of shortening that went into general food applications which partially substituted PL demand, the total palm oil that has gone into food application in 2023 was estimated at 5.04 million MT, an increase of 941,500 MT from the total import volume of shortening (for food processing) and PL (Chart 2).

Chart 2: Import of PL and Shortening in China (2019-2023)

Source: Chinese Customs

Similar to shortening, it was noticed that the import volume of hydrogenated vegetable oils has been maintained at slightly below 120,000 MT between 2017 and 2020, indicating that the demand for this product is rather matured until it jumped significantly in 2021 by close to 150,000 MT, or 130%, and subsequently increased by 288,000 MT in 2022.  In 2023, the import of hydrogenated vegetable oil increased by a whopping 253,000 MT and ended the year with a total import of 805,500 MT. 

Further clarification sought from the industry sources indicates that the increase in hydrogenated vegetable oils (HS Code 1516.2000) was mainly hydrogenated palm stearin (HPS) from Indonesia.  This palm product is being used by the oleochemicals industry as feedstock in substitution of PS to produce stearic acid and glycerine, as there is no import duty for this product under the ASEAN-China FTA, as compared to the 2% import duty for PS imposed by China.  Hence, coupled with the duty-free export status of HPS, the product is far more competitive in terms of price against PS.

Chart 3 – Annual Import of Hydrogenated Vegetable Oil in China (2018-2023)

Source: Chinese Customs

As highlighted earlier, according to the historical import data before 2021, the hydrogenated vegetable oil imported by China was estimated at 120,000 MT per annum, which is mainly cocoa butter substitutes and other specialty fats declared under the HS Code of 1516.2000.  Hence, it could be deduced that the import of HPS from 2021 onwards is equivalent to the total import of hydrogenated vegetable oil minus 120,000 MT.  Subsequently, the import of HPS is estimated at 150,000 MT, 430,000 MT, and 685,000 MT respectively for 2021, 2022, and 2023.

Hence, if we sum up the total PS and HPS being imported by China in 2023, we could witness that the demand or import of the oleochemical feedstocks did not decline (Chart 4). Nevertheless, we can see from the chart that the total import volume (PS and HPS) in 2023 was almost unchanged from 2022, indicating that the oleochemicals sector was rather stagnant. According to the market intelligence gathered from the industry players, most claimed that the margin was very bad in 2023, partly due to the property market crisis, and led to the slowdown of the oleochemicals (mainly stearic acid) demand from the plastic products sector in China.

Chart 4: Import of PS and HPS in China (2017-2022)

Source: Chinese Customs

So, if we sum up the import volume of PO under the HS Code of 1511 which includes PL & PS, and shortening and HPS, the total import of palm products for industrial application is estimated at 7.05 million MT, an increase of 971,500 MT from the 2022 level. This volume is also very close to the 7.08 million MT recorded in 2021, and higher than 6.62 million MT recorded in 2020.  This shows that the actual demand for palm oil or palm products from industrial applications wasn’t affected much by the increase in the supplies of soft oils due to the price competitiveness.  

Chart 5 – Total Import of Palm Products (2019-2023)

Source: Chinese Customs

Outlook of Palm Oil Demand in 2024

Economic and Population Situation Remain the Prime Factors in Demand Growth

Despite some issues with regard to the property sector’s development, China’s economy was able to record a GDP growth of 5.2% in 2023, a strong recovery from the 3% growth recorded in 2022, the years when the country’s economy was affected by frequent long-period lockdown in multiple cities throughout the year.

For 2024, various forecasts were given by major organizations/institutions such as IMF, Bloomberg, and Morgan Stanley on the GDP growth which ranged from 4.2% to 4.9%, while the Chinese Academy of Science has forecasted a 5.3% growth in China’s 2024 GDP. 

According to the observation by author, the oils & fats demand in China has been growing at an average rate of 750,000 MT per annum since China’s GDP growth dropped below 9%. Hence, based on the forecast given on GDP growth in 2024, the oils & fats demand is expected to also grow at 750,000 MT against 2023‘s volume.   This growth rate is further made possible by the fact that China has just experienced a second consecutive year of negative growth in population in 2023, which dropped by 2.08 million, higher than the drop recorded in 2022 at 850,000.  This has been seen as the start of the slowdown in China’s population and hence, 2024 will see at least a no-growth situation if not another year of drop in population.

Government Policies Play Roles in Types of Oils to Supplement the Growth

Ongoing efforts by the Chinese government to lower the reliance on imported soybeans for the supplies of plant protein to feed the livestock have also caused slower growth in soybean crushing, which led to slower growth in SBO output. According to the Chinese government’s oils & fats think-tank agency, China National Grain and Oils Information Centre (CNGOIC) estimated that the crushing volume of soybean will be at 98.90 million in 2023/24, an increase of 2.1 million MT y-o-y, which is far lower than the growth recorded in 2022/23 at 5.3 million MT.

With the slower growth in soybean crushing, this will be translated to a total of 18.79 million MT of SBO being churned out in China market, only growing by 400,000 MT.  This will only be able to satisfy not more than 40% of the total growth in oils & fats demand forecasted at 1.08 million MT in the same year (Oct 23/Sep 24).  Nevertheless, the agency forecasted that the PO demand in the same year will experience no growth due to the increase in supplies of RSO and SFO in the same year.  This situation is possible but is only confined to the import of PO under the HS Code of 1511. As highlighted earlier, some of the demand for PO has been switched from the conventional palm fractions of PL and PS to shortening and HPS, and it is expected that demand for shortening and HPS will stay firm if not growing by another 100,000-200,000 MT, this will translate into either same or additional import of 100,000-200,000 MT total palm products in 2024 y-o-y. The subsequent factor explains why the growth of

CPO Output Will Decide the Supply-Demand Balance of PO

However, the key factor for any growth in PO and palm products demand and import in China is also very much dependent on the CPO output in both Malaysia and Indonesia this year.  According to Oil World, the CPO output forecasted for 2023/24 would be at 81.66 million MT, with only 200,000-300,000 MT growth from the previous year (2022/23).   This will surely limit the additional volume available for export markets, especially when Indonesia is expected to increase its PO domestic consumption due to its B35 policy. According to Oil World, the consumption of PO in Indonesia’s biodiesel sector alone in 2024 will increase by 450,000 MT. This will subsequently affect the competitiveness of palm oil in the global market, especially those price sensitive countries including China.  What’s more, with both Indonesia and Malaysia CPO outputs forecasted to drop by 200,000 MT respectively against 2023’s production, it will further limit the availability of palm products to be exported to the world market including China. 

However, the sharp growth domestic demand for PO in Indonesia which coupled with the drop in CPO output will ultimately affect the export volume of PO from Indonesia, as the supply-demand imbalance will affect the price of competitiveness of Indonesian PO.  This is seen as an opportunity for Malaysian exporters to capitalize on recapturing some market share from Indonesia in 2024.

Prepared By:  Desmond Ng

*Disclaimer: This document has been prepared based on information from sources believed to be reliable but we do not make any representations as to its accuracy. This document is for information only and the opinion expressed may be subject to change without notice and we will not accept any responsibility and shall not be held responsible for any loss or damage arising from or in respect of any use or misuse or reliance on the contents. We reserve our right to delete or edit any information on this site at any time at our absolute discretion without giving any prior notice.

 

 

 

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EU’s ban on palm oil import seen as biased https://www.mpoc.org.my/eus-ban-on-palm-oil-import-seen-as-biased/ https://www.mpoc.org.my/eus-ban-on-palm-oil-import-seen-as-biased/#respond Mon, 25 Mar 2024 02:00:31 +0000 https://www.mpoc.org.my/?p=60298
KUALA LUMPUR: The European Union’s (EU) ban on the import of palm oil as a biofuel by 2030 is seen as lacking in transparency and scientific reliability, which provides an inaccurate view of the sustainability practices practised in the country’s biofuel industry.

Plantation and Commodities Minister Datuk Seri Johari Abdul Ghani said the ban is also seen as biased and will create undue restrictions and contradict free trade practices as it violates the principles of the World Trade Organisation (WTO), namely the Technical Barriers to Trade and the General Agreement on Tariffs and Trade 1994.

He said in this matter, Indonesia and Malaysia have filed complaints with the WTO against the EU’s actions – Indonesia filed its complaint on Dec 9, 2019, and Malaysia filed its complaint on Jan 15, 2021 (about 13 months after Indonesia).

“In my opinion, Malaysia should not have taken such action. This is because the Delegated Act under the Renewable Energy Directive II (RED II) targets palm oil-based biofuels and does not touch on sustainability issues related to palm oil in general,” he said.

Johari said the ban will create undue restrictions and contradict free trade practices.

Johari said this during the Ministerial Question Time in reply to Teresa Kok Suh Sim (PH-Seputeh) who wanted to know whether the WTO’s decision on Malaysia’s appeal regarding the EU’s discrimination against palm oil still allows the union to implement the Delegated Act which bans palm oil as a biofuel by 2030 and whether Malaysia has the expertise to change the EU policy banning palm oil as a biofuel in 2030.

Based on the Delegated Act under the EU RED II, palm oil has been categorised as having a high indirect land-use change rate.

The import of palm oil as a biofuel source by the EU will be fully banned or phased out by 2030 if it is still categorised as having a high ILUC rate.

He said Indonesia is among the world’s leading biofuel producers; PME (palm methyl esters) is a key biofuel blend stock input in Indonesia and Malaysia.

“Based on statistics released by OilWorld, in 2023, an estimated 25.2% (12.2 million tonnes) of Indonesia’s crude palm oil (CPO) production (48.4 million tonnes) was processed to produce PME. In the same period, Malaysia (recorded) only 7.7% (1.4 million tonnes), of which biodiesel constituted 134,000 tonnes.

“Therefore, when the decision was announced, Indonesia took the stand that when it saw Malaysia had also filed this issue with the WTO, it decided to withdraw. They (Indonesia) suspended their case, so now it’s only Malaysia. — Bernama

Source : The Star
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EU palm oil ban: Malaysia, Indonesia seek trade justice https://www.mpoc.org.my/eu-palm-oil-ban-malaysia-indonesia-seek-trade-justice/ https://www.mpoc.org.my/eu-palm-oil-ban-malaysia-indonesia-seek-trade-justice/#respond Thu, 21 Mar 2024 03:38:49 +0000 https://www.mpoc.org.my/?p=60266

A WTO panel’s ruling on the EU’s palm oil import policy has intensified trade tensions with Malaysia and Indonesia, highlighting environmental and trade rule disputes.

A World Trade Organization (WTO) panel ruled earlier this month on a complaint brought by Malaysia against the European Union over the bloc’s plans to phase out the import of palm oil as biofuel because of environmental concerns.

Malaysia, the world’s second largest producer of palm oil after Indonesia, brought a case to the WTO in early 2021 against the EU, France and Lithuania.

The Southeast Asian country contested that the EU had violated international trade rules in its policy to phase-out the import of palm oil as a biofuel due to deforestation and emissions risks under the EU’s second Renewable Energy Directive (RED II).

 Palm oil farmer loading palm oil seeds onto a truck in Kampar, Riau provinceMalaysia is the world’s second largest producer of palm oil after Indonesia

Indonesia also filed a case with the WTO but asked for it to be suspended a day before the result of Malaysia’s case was announced.

What was the WTO decision based on?

The three-person panel voted by two-to-one in favor of the EU’s ability make rules against imports of crop-based fuels for environmental reasons.

However, it also said that the EU was at fault for how it had prepared and published its policy, which amounted to “arbitrary or unjustifiable discrimination” against Malaysia.

Much of this revolved around how the EU defined its assessment of emissions, along with indirect land use change (ILUC), which measures the impact of diverting agricultural land previously designed for food production to biofuel production,

The WTO panel found the EU’s study on the ILUC risk of palm oil, using data from 2008 and 2016, was potentially outdated.

It also said an arbitrary choice was made to assess emissions from palm oil production over a 10-year period, when palm trees usually survive for up to 30 years.

“There are deficiencies in the design and implementation of the low ILUC-risk criteria,” the WTO panel noted in a 348-page report published on March 5.

EU relations with Malaysia, Indonesia at risk

One dissenting panelist also offered greater support to Malaysia’s appeal that the EU policy is protectionist, since it is accused of singling out palm oil while overlooking the environmental impact of biofuels produced within Europe, such as rapeseed.

Chris Humphrey, executive director of the EU-ASEAN Business Council, said that the WTO ruling will be “viewed by both the EU and Malaysia as a victory given the mixed outcome.”

“While we await the delayed WTO ruling on Indonesia’s complaint on palm oil, it is clear that dialogue between the EU and these key ASEAN partners is the only way forward in dealing with the concerns that both Indonesia and Malaysia have,” he added.

The EU Directorate-General for Trade said in a statement that the bloc “intends to take the necessary steps to adjust the Delegated Act.”

The European Commission did not respond to requests for comment.

Daniel Caspaty, an MEP and chair of the European Parliament’s committee on relations with ASEAN states, told DW that the WTO panel’s findings “marks a significant moment in the debate on trade policy and environmental protection.”

“This decision will undoubtedly have implications for the EU’s relations with Indonesia and Malaysia, particularly concerning the palm oil dispute,” he added. 

Caspaty said Europe must urgently find a resolution, as well as with other conflicts such as discussions surrounding nickel.

EU should set ‘realistic’ standards for other countries

The EU is nearing the end of free-trade talks with Indonesia and has been in talks with Malaysia about restarting negotiations for a bilateral free-trade pact.

However, Brussels has recently come under attack from more third parties over how it classifies its rules related to deforestation.

For Jakarta-based analyst O’Rourke, greater clarity can benefit Indonesia and Malaysia.

“Unlike some of their competitors, the two nations are able to achieve compliance in many instances and that will constitute a form of competitive advantage over the long term. And, of course, without such rules, climate change will imperil these as well as all other countries,” he said. 

This is likely to require the EU to alter how it approaches trade with partners.

Frederick Kliem, a research fellow and lecturer at the S. Rajaratnam School of International Studies in Singapore, said Brussels currently applies “a very detailed, highly bureaucratic approach to such matters.”

“This is OK internally, where the EU is well understood, appreciated and policies are well communicated. This is, however, not the same for third parties,” he added.

“If the EU does not moderate its high standards and make them more realistic for third parties to achieve, I fear it will be very difficult to achieve further free trade agreements.”

Source : DW.com

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Palm Sphere https://www.mpoc.org.my/palm-sphere/ https://www.mpoc.org.my/palm-sphere/#respond Thu, 21 Mar 2024 01:10:35 +0000 https://www.mpoc.org.my/?p=60225

PalmSphere, the dedicated newsletter from the Malaysian Palm Oil Council (MPOC), delves into environmental, social, and governance (ESG) aspects and sustainability within the Malaysian palm oil industry. As stewards of one of Malaysia’s most vital resources, the importance of fostering a sustainable approach to palm oil production is recognised.

Within PalmSphere, the journey toward a more ethical palm oil industry is shared with pride. This newsletter is a gateway to a wide array of stories, insights, and initiatives that highlight the innovative steps taken to ensure a brighter and greener future. Explore how biodiversity is nurtured, local communities are empowered, and transparency is enhanced in the Malaysian palm oil sector.

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 CPO Prices Set to Revert to the Trading Range of RM 3,800 to RM 4,000 in April https://www.mpoc.org.my/cpo-prices-set-to-revert-to-the-trading-range-of-rm-3800-to-rm-4000-in-april/ https://www.mpoc.org.my/cpo-prices-set-to-revert-to-the-trading-range-of-rm-3800-to-rm-4000-in-april/#respond Tue, 19 Mar 2024 06:06:16 +0000 https://www.mpoc.org.my/?p=60209

Petaling Jaya – Malaysian palm oil stocks continued their downward trend in February 2024, dropping by 5.00% to 1.919 million tonnes. This marks the lowest level of stock registered since July 2023. The reduction in palm oil inventory in February primarily driven by reduced imports and robust domestic consumption.

In the first two months of 2024, Malaysian palm oil imports experienced a 70% decrease year-on-year, plummeting to 0.062 million tonnes. This amount accounts for merely 6.90% of total imports in 2023. Historically, Malaysian palm oil inventory has heavily relied on imports for built-up. Therefore, closely monitoring the upcoming month’s import figures is crucial to gauge palm oil stocks level in Malaysia.

Another significant factor contributing to the decline in stocks is the strong domestic consumption. Malaysian palm oil domestic consumption in January and February 2024 grew 11.30% as compared to the same period in 2023. It is unlikely that Malaysia’s palm oil stocks will experience any growth in March due to robust domestic consumption, particularly during the Ramadan month. Additionally, production is not expected to increase until April and beyond.

On 15 March 2024, CPO prices have surged to their highest level in 12 months, nearly 10% above the February closing price. The strong price trends observed in first quarter of 2024 is predominantly shaped by the deficit supply growth dynamic.

As the low season for palm oil production concludes in March, palm oil prices may begin to reflect the recovery in production and inventory levels in April and May, potentially capping palm oil prices. Additionally, the price premium of palm oil over soft oils continued to widen in March and have surpassed the prices of three major soft oils concurrently since February in the European market.

The announcement by GAPKI regarding Indonesia’s palm oil inventory of 3.14 million tonnes as of December 2023 further indicates tight palm oil supply. Therefore, it is predicted that palm oil stocks of Malaysia and Indonesia combined will be less than 5 million tonnes in February 2024. In 2024, Global palm oil production is projected to rise minimally by 0.11%, whereas production growth for soybean oil, rapeseed oil, and sunflower oil is expected to increase by 2.88%, 3.48%, and 3.94%, respectively.

Palm oil prices are anticipated to pull back to the trading range of RM3,800 to RM4,000 in April. A bullish price movement from the current level of RM4,250 is unlikely due to the ample supply of soybeans from South America entering the global market from April onwards, as well as the gradual seasonal recovery of palm oil production in Malaysia. Palm oil prices were trading at a premium of USD40 to USD95 above soft oils in March. Therefore, a recovery in soft oil prices is anticipated in April to narrow the price spread.

For further information, please contact:
Razita Abdul Razak; email: razita@mpoc.org.my
Tel: +6(03)7806 4097, Fax: +6(03)7806 2272

About the Malaysian Palm Oil Council (MPOC)

The Malaysian Palm Oil Council (MPOC) is an agency dedicated to promoting Malaysia as a global leader in certified sustainable palm oil. MPOC focuses on positioning Malaysian palm oil as a healthy, sustainable, and ethical choice for consumers worldwide by engaging with stakeholders, improving market access, and promoting the MSPO certification. MPOC has a network of 8 regional offices in various international locations and plays an important role in expanding Malaysia’s palm oil industry by identifying and capitalizing on market trends.

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Malaysian palm oil vindicated https://www.mpoc.org.my/malaysian-palm-oil-vindicated/ https://www.mpoc.org.my/malaysian-palm-oil-vindicated/#respond Tue, 19 Mar 2024 02:37:35 +0000 https://www.mpoc.org.my/?p=60165
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A sustainable future for palm https://www.mpoc.org.my/a-sustainable-future-for-palm/ https://www.mpoc.org.my/a-sustainable-future-for-palm/#respond Tue, 19 Mar 2024 02:23:36 +0000 https://www.mpoc.org.my/?p=60152

From ice cream to livestock feed rations, palm oil is a common ingredient found throughout all stages of the dairy supply chain.

Valued for its unique melting point, mixability and low odour, it has become one of the top global edible oils by consumption since the palm oil boom of the early 1990s, says Catherine Barton, Policy Lead on Deforestation-Free Commodities and Regenerative Agriculture for Chester Zoo.

“Palm is incredibly versatile and allows for manufacturing methods, product properties and extended shelf life that otherwise would not be possible if replaced with a different ingredient,” explains Ms Barton.

In on-farm dairy production this goes a step further, with palm oil fractions used in the manufacture of many types of rumen-protected fat supplements as highly energy-dense ingredients with unique fatty acid profiles. These supplements are targeted to improve various aspects of dairy production including milk yield, milk fat production and cow fertility, says Dr Richard Kirkland, Global Technical Manager and nutritionist for Volac Wilmar Feed Ingredients (VWFI).

These rumen-protected feed fat supplements are tremendously valuable because they deliver an energy concentration around 2.5-times that of cereals without disrupting rumen function as is the risk with liquid oil sources. Recent research has demonstrated contrasting nutritional effects of palmitic (C16:0) and oleic (C18:1), the two major fatty acids in palm oil, when supplemented to dairy rations.

“Palm-based fat supplements help to optimise rumen conditions for improved digestion and utilization of the entire ration. They also boost milk production outputs, allowing farmers to improve feed efficiency of their herds,” explains Dr Kirkland. “While energy supply can be increased with non-rumen-protected vegetable oils or cereals, these ingredients can be incredibly disruptive to rumen function with consequences to animal health and productivity.”

The improved production efficiency achieved on dairy farms translates into a similar picture of why sustainability discussions around palm oil aren’t so black and white, says Ms Barton.

Sustainable palm production is essential to preventing many environmental and economic consequences that would come with “no-palm” policies in food production, says Catherine Barton, Policy Lead on Deforestation-Free Commodities and Regenerative Agriculture for Chester Zoo.
Sustainable palm production is essential to preventing many environmental and economic consequences that would come with “no-palm” policies in food production, says Catherine Barton, Policy Lead on Deforestation-Free Commodities and Regenerative Agriculture for Chester Zoo.

Compared to other vegetable oil crops, the amount of oil produced on one hectare of land growing palm would require up to eight hectares of land from a different vegetable oil crop such as soya or rapeseed oil.

“When looking at what makes one commodity more sustainable than another, it must be both economically and environmentally feasible. When grown sustainably, palm checks those boxes,” explains Ms Barton. “From an environmental point of view, we need less land to produce the greater volumes of oil that are required for global consumption. The high yield also hits business targets for increased efficiency.”

If not palm, then what?

Looking ahead to the future of sustainable food production, Ms Barton says so-called “no- palm” policies are not the answer. Instead, sustainable palm production needs to remain part of the food chain, with significant environmental and economic consequences if it does not.

“Growth in the palm industry to where it is now has already been established – trying to shut it down is only going to cause larger issues,” she says.

From an economic standpoint, palm is the backbone of local economies within Indonesia and Malaysia where 85% of the world’s palm is grown. In Indonesia alone, the palm industry employs 4.5 million people, she says.

“Going palm-free isn’t going to save wildlife or stop deforestation – it will only shift the problem elsewhere. Markets will open up to buyers who don’t have sustainability or human rights standards, or plantations will shift to a different commodity crop that doesn’t have any regulations. The global edible oil demand would also need to be met by crops that take up significantly more land and natural resources than palm, creating other environmental issues,” concludes Ms Barton.

Source : FarmingLife

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Can Europe Save Forests Without Killing Jobs in Malaysia? https://www.mpoc.org.my/can-europe-save-forests-without-killing-jobs-in-malaysia/ https://www.mpoc.org.my/can-europe-save-forests-without-killing-jobs-in-malaysia/#respond Fri, 15 Mar 2024 02:47:09 +0000 https://www.mpoc.org.my/?p=59979

Patricia Cohen and Jes Aznar interviewed farmers and landowners during a 900-mile road trip on Borneo, as well state officials in Kuala Lumpur, in Malaysia.

The European Union’s upcoming ban on imports linked to deforestation has been hailed as a “gold standard” in climate policy: a meaningful step to protect the world’s forests, which help remove planet-killing greenhouse gases from the atmosphere.

The law requires traders to trace the origins of a head-spinning variety of products — beef and books, chocolate and charcoal, lipstick and leather. To the European Union, the mandate, set to take effect next year, is a testament to the bloc’s role as a global leader on climate change.

The policy, though, has gotten caught in fierce crosscurrents about how to navigate the economic and political trade-offs demanded by climate change in a world where power is shifting and international institutions are fracturing.

Developing countries have expressed outrage — with Malaysia and Indonesia among the most vocal. Together, the two nations supply 85 percent of the world’s palm oil, one of seven critical commodities covered by the European Union’s ban. And they maintain that the law puts their economies at risk.

In their eyes, rich, technologically advanced countries — and former colonial powers — are yet again dictating terms and changing the rules of trade when it suits them. “Regulatory imperialism,” Indonesia’s economic minister declared.

The view fits with complaints from developing countries that the reigning international order neglects their concerns.

The palm oil dispute also encapsulates a central tension in the economics of climate change: the argument that lower- and middle-income nations are being compelled to bear the cost of ruinous environmental shifts caused mostly by the world’s wealthiest nations.

A man cooking on a grill, near a river, with steam coming off the grill.

Vendors cooking and selling fried food at a market in Kota Kinabalu.

People sitting inside a tent at a market, eating, with a river behind them.

One acre of palm oil can produce four to 10 times as much oil as the same area of soybeans, rapeseed or sunflowers.

A woman seated inside a market with food products stacked up behind her.

Vendors selling local food products inside a market. Palm oil is mostly used in the production of food products such as crackers, chips, chocolate, biscuits, margarine and frying oils.

“We’re not questioning the need to fight deforestation,” said Nik Nazmi Nik Ahmad, Malaysia’s environment minister. “But it’s not fair when countries that have deforested their own land for centuries, or are responsible for much of our deforestation, can unilaterally impose conditions on us.”

In addition, many government officials, industry representatives and farmers contend that the European Union’s rules are really a form of economic protectionism, a way to shield European farmers who grow competing oilseed crops like rapeseed or soybeans.

The European Union’s law, which was passed last year, bars products that use palm oil and other commodities like rubber and wood that come from forestland that was converted to agriculture after 2020.

Proving compliance could turn out to be complex and expensive for vast numbers of small suppliers.

In Malaysia and Indonesia, the prime minister and president said the livelihoods of their citizens were threatened. They jointly vowed to combat what they called “highly detrimental discriminatory measures against palm oil.”

The concerns have been echoed by anti-poverty advocates and even some environmentalists.

“A lot of people are going to be caught flat-footed when this kicks in next year,” said Pamela Coke-Hamilton, executive director of the International Trade Center, a United Nations agency created to help poor countries build wealth through trade.

Most small farmers don’t even know about the looming ban, let alone how to prove their compliance, Ms. Coke-Hamilton said.

In a week of interviews with The New York Times at plantations in the Malaysian state of Sabah on the island of Borneo, not a single small farmer had heard of the deforestation rules.

“They’re going to get kicked out of the market,” which could further harm the environment, Ms. Coke-Hamilton said. “We know deforestation is linked to poverty.”

A person holding a large stick, with yellow hard hat and trees behind him.

Plantation workers harvest palm fruits inside a small plantation.

People inside a small boat, cruising along a river with trees on either side.

Visitors take a tour on boat of a river channel that is part of the Kinabatangan wildlife sanctuary.

Palm trees, with golden sunlight behind them and swampy water in the foreground.

A palm tree plantation inside the Kinabatangan wildlife sanctuary. Malaysia and Indonesia supply 85 percent of the world’s palm oil.

Endless Rows of Oil Palms

The Chinese New Year was a national holiday in Malaysia, but Awang Suang, 77, had been up since dawn, carrying a roaring engine on his back and swinging a hand-held grass cutter around the oil palm trees on his plantation.

“Plantation” is a bit grand to describe the small overgrown plot in Membakut in Sabah that Mr. Awang farms mostly on his own. His holdings amount to 12 acres.

He has been cultivating oil palms for more than 50 years after switching from rubber trees. Palms require less labor and produce more frequent harvests — roughly every two weeks, year round — providing a steadier income, he explained.

The work in Borneo’s humid equatorial heat is exhausting. For tall palms, farmers like Mr. Awang maneuver an extendable pole with a scythe on the end to slice through spiny 50-pound bunches cradled at the top of the trunk. Then they must carry or cart the fallen fruit to a road.

In a good month, Mr. Awang said, he can grow about eight tons of fruit.

Later, over sweet milky tea in a living room lined with six overstuffed, regal-style couches, Mr. Awang explained that most property owners he knew grew oil palms. Many supplement their income by, say, raising goats, fishing, contracting work or doing government jobs.

In recent decades, the world’s appetite for the viscous red oil has exploded. Roughly half the products on supermarket shelves contain palm oil.

The bulk of it comes from multibillion-dollar corporations, which have gulped up miles and miles of land.

A person trimming weeds in a palm tree plantation, holding a large stick.

Awang Suang trimming weeds from palm trees in his small plantation.

A ship in the distance, with water in the foreground.

A tanker ship anchored near a palm oil mill in Sandakan.

A man seated, sipping tea inside his home with green trees in the background.

Mr. Awang in his home.

Across Sabah, oil palms stretch as far as the eye can see. The landscape is picturesque. But compared with the riotous diversity of a rainforest, the columns — like brigades of upright feather dusters — can become as monotonous as elevator music.

Smallholders — defined in Malaysia as farmers who own fewer than 40 hectares, or nearly 100 acres — grow 27 percent of the country’s oil palms.

The palm oil gold rush has helped reduce rural poverty, build wealth from exports and create jobs. Roughly 4.5 million people in Malaysia and Indonesia work in the industry, according to the World Economic Forum.

 

Damage to the environment increased the amount of greenhouse gases.CreditCredit…Video by Jes Aznar For The New York Times

For a while the oil was even promoted as environmentally friendly, a “supercrop.” One acre can produce four to 10 times as much oil as the same area of soybeans, rapeseed or sunflowers.

But environmental benefits accrue only if existing cropland is converted to oil palms. Instead, producers clear-cut or burned pristine rainforests and peatlands to make way for crops. The elimination of these precious carbon sinks released titanic amounts of greenhouse gases into the atmosphere, unleashing an environmental catastrophe.

Malaysia lost nearly a fifth of its primary tropical forest between 2001 and 2022, according to the World Resources Institute. Habitats for thousands of species, including orangutanssun bears and pygmy elephants, were destroyed, putting some animals in danger of extinction.

Environmental watchdogs like the World Wildlife Fund and a wide range of industry players and multinationals teamed up in 2004 to create the Roundtable on Sustainable Palm Oil, a voluntary organization that set standards to reduce destructive practices.

But critics maintain that while there have been improvements, voluntary agreements alone could not preserve and restore the world’s forests. A report from the European Parliament concluded in 2020 that self-policing “should only be complementary to binding measures.”

The European Union introduced exactly that. To ensure that any product sold in the 27 countries of the bloc could be traced back to its source, the legislation demands that nearly all producers who cultivate palm oil, coffee, cocoa, cattle, soybeans, rubber and wood map the precise borders of their farmland to show that the commodities are not linked to deforestation.

It is up to exporters to prove that the rules were followed at every point along the supply chain.

To many Malaysians, though, the European Union’s mandate reflects a deep misunderstanding. Tracing each fat, acorn-shaped bunch of fruit to a small farm in remote areas is much more complicated than lawmakers in Brussels realize, smallholder groups say.

A person wearing an orange shirt feeding monkeys fruit.

Proboscis monkeys being fed in Labuk. Their population has declined because of habitat destruction.

People standing looking at animals in an enclosure.

Orangutans and macaques inside a shelter in Sepilok.

People walking along a bridge, in a rainforest with orangutans climbing on the trees.

Orangutans are fed in inside a shelter in Sepilok.

Hard-to-Trace Sources

Smallholders mostly sell to traders, dealers and collectors — layer upon layer of middlemen who end up mixing together bunches of palm oil fruit from hundreds of plantations.

Tracing is further complicated because the dealer, wary of competition, “doesn’t want to tell the mill where all his suppliers come from,” said Reza Azmi, executive director of Wild Asia, a nonprofit based in Malaysia that works with smallholders to improve environmental practices.

Smaller independent producers and traders could get squeezed out, expanding the reach of agribusinesses.

“What we’re hearing in Sabah,” Mr. Azmi said, “is that independent mills are looking to sell to big corporate guys because they don’t have resources to make sure of compliance.”

The challenges of tracing oil back to its source can be glimpsed at a tiny collecting station in Gomantong, where farmers sell their daily or weekly palm oil harvests.

Starting at 6 a.m., dozens of big trucks from plantations, as well as smallholders’ pickups, rolled one by one onto a large platform scale before moving on to dump their loads onto a single swelling pile.

When Riduan Amil’s turn came, he jumped onto the flatbed of his white Isuzu, which can hold about a ton of palm oil fruit. Under a broiling sun, he used a sharp pike to pitch each bunch onto the hodgepodge.

A farmer with a blue hard hat, loading palm fruits onto a truck.

A plantation worker loading palm fruits to a truck before weighing and delivering to a local mill. Nearly 4.5 million people in Malaysia and Indonesia are employed in the industry.

A tractor moving along a road with palm trees in the distance, carrying a load of palm fruits.

Trucks containing palm fruits on its way to a mill.

A person shoveling palm fruits out of a truck with people standing behind it.

Small palm plantation owner unloading palm fruits at a collecting station

By the end of the day, roughly 80 tons of fruit will have accumulated. The haul is then delivered to a mill.

When it comes to the European Union’s mandates, produce from a single uncertified farm would make the entire lot ineligible for use in any export to the bloc, the world’s third-largest importer of palm oil.

Olivier Tichit, director of sustainability for Indonesia’s Musim Mas Group, one of the world’s largest integrated palm oil companies, said the group bought fruit from up to a million smallholders.“If one is not compliant, you have to exclude the entire mill,” he said, adding that his company will “take no risks.”

The European Commission, according to a spokesperson, “is committed to providing all the necessary support to make sure that smallholders are fully prepared for the change in rules.” The bloc has pledged 110 million euros to provide technical and financial support.

Farmers with fewer than 10 acres can use a smartphone to map their land. “GPS coordinates can be generated easily and for free,” an E.U. primer explains.But critics insist that mapping farms and then verifying the data is much more complex, time-consuming and expensive, not to mention plagued by a lack of documented land titles and other complications.

Trucks from plantations dumping their loads of palms onto a single swelling pile.
CreditCredit…Video by Jes Aznar For The New York Times

In Malaysia, government officials complain the European Union’s law ignores the licensing and deforestation rules that the country already has. Since Jan. 1, 2020, all growers and businesses have been required to be certified by the Malaysian Sustainable Palm Oil board. The standards match many set by the European Union, although there is no requirement for geolocation mapping.

The effort has had some success. In its annual 2022 survey, the World Resources Institute found that Malaysia was one of the few places where deforestation did not get worse.

A new task force that includes the European Commission and government ministers from Malaysia and Indonesia is meeting to work on putting the deforestation rules into practice. Malaysian officials have asked the commission to accept the country’s own certification system, and to exempt smallholders from the law.

Still, the perception that European powers are dictating to their governments stings.

“You can’t impose legislation and then come after and say, ‘Come have a dialogue,’” said Belvinder Kaur Sron, executive director of the Malaysian Palm Oil Council, a trade organization.

There is also resentment that a double standard seems to apply to rich countries.

“We are told about upholding stringent standards,” on free trade and climate, Mr. Nik Nazmi, the environment minister, said. But when the interests of more economically powerful regions are at stake, the rules are relaxed.

“We feel our voices are not heard.

People sitting around a table with a pink tablecloth, eating a meal.

A wedding ceremony celebrated by residents and guests inside a village surrounded by palm plantations.

Children sitting on a balcony deck, playing cards.

Children of palm plantation workers playing cards at their house.

Two people standing inside, with their heads down, praying.

A palm plantation worker family during afternoon prayers at their house inside the plantation.

Source : NYTimes.com

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Johari: Palm oil industry players need to increase FFB yields https://www.mpoc.org.my/johari-palm-oil-industry-players-need-to-increase-ffb-yields/ https://www.mpoc.org.my/johari-palm-oil-industry-players-need-to-increase-ffb-yields/#respond Fri, 15 Mar 2024 00:40:55 +0000 https://www.mpoc.org.my/?p=59973

Plantation and Commodities Minister Datuk Seri Johari Abdul Ghani.

KUALA LUMPUR: Industry players and smallholders need to increase the production of fresh fruit bunches (FFB) and crude palm oil (CPO) to maintain the relevance of the Malaysian palm industry, said Plantation and Commodities Minister Datuk Seri Johari Abdul Ghani.

He said the government would not open new plantation areas but instead would focus on efforts to increase the yields.

“If we can achieve an FFB yield of 18 tonnes per hectare, this industry can produce 20.5 million metric tonnes of CPO, an increase of two million metric tonnes from 18.5 million metric tonnes last year,” he said in winding up the debate on the Motion of Thanks on the Royal Address for his ministry in the Dewan Rakyat today.

Johari said among the driving factors towards this achievement were the right replanting schedule at the recommended rate of four to five per cent, sufficient manpower and optimal farm management.

In addition to the use of proven quality palm seeds, scheduled fertilisation as well as disciplined, continuous replanting, he said optimal farm management also involves the appropriate specialisation.

The ministry also encourages mechanisation for tasks such as arranging fronds and FFB, collecting loose fruits and moving FFB to the roadside.

“For every 100 plantation workers, 50 are harvesters. Therefore, we must ensure that every oil palm plantation has sufficient harvesters to operate at optimum capacity,” he added. – Bernama

Source : The Star

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