As a step towards this initiative, IPOB, provided it gets government approval, wants to follow Malaysia’s example of establishing a dedicated funding to promote benefits of oil palm planting and create better awareness on palm oil nutrition.
“We want to promote Indonesia’s palm oil industry on a global level. We have the same spirit as Malaysia in opening up markets that are increasingly hindered by non-tariff trade barriers and protectionism,” said IPOB chairman Derom Bangun.
Oil palm planting and palm oil exports provide developing nations a path out of poverty. The growing of oil palms, the world’s most-efficient oil crop, is helping the people of Malaysia and Indonesia to improve their standard of living.
Indonesia and Malaysia supply affordable and nutritious cooking oil and margarine to billions of people in developing nations such as China, India, Pakistan, Bangladesh and Vietnam.
According to Oil World trade journal, Malaysia and Indonesia are expected to export the bulk of the 56 million tonnes of palm oil traded worldwide this year. In the last five years, Malaysia earned between US$15 billion and US$20 billion (RM50 billion and RM70 billion) a year from palm oil exports.
Indonesia earns around US$15 billion annually from palm oil shipments.
“Our palm oil promotional diplomacy and market access advocacy are done on an ad hoc basis currently,” Derom told Business Times on the sidelines of the Oils & Fats Congress 2014 held here recently.
“We’re seeking a meeting with Agriculture Minister Andi Amran Sulaiman on this matter, among other things.
“We hope that by formalising a dedicated funding mechanism sourced from oil palm plantations and small planters in Indonesia, we can drive these programmes more effectively with Malaysia in the international market,” he said.
Derom was responding to Malaysian Palm Oil Council chief executive officer Tan Sri Yusof Basiron’s suggestion recently that Malaysia is looking to Indonesia in jointly tackling smear campaigns and barriers to palm oil trade.
Derom said insidious smear campaigns on palm oil has one clear objective, which is to kill the growth of oil palm planting and reduce consumption in the global market. “Deliberately reducing consumption of palm oil will only harm our farmers’ livelihoods and our means of getting out of poverty. We must address this unfair discrimination and trade oppression more effectively,” he said.
A week later, Hasyim Widhiarto of The Jakarta Post wrote about President Jokowi’s handling of barriers to palm oil trade.
Indonesia asks EU to ease barriers on palm oil imports
Indonesia, the world’s largest producer of palm oil, has asked the European Union to ease import barriers on palm oil imports, mainly to help open market access for Indonesian farmers.
In a meeting with the European Council president, Herman van Rompuy, on Wednesday at the State Palace, President Joko “Jokowi” Widodo personally asked the EU’s principal representative to ease the barriers to palm oil products in Europe.
“We have asked him to help us solve this problem,” Jokowi told reporters after his 30-minute closed-door meeting with the former Belgian prime minister.
“Oil palm plantations belong not only to big companies. About 45 per cent belong to farmers, so it is necessary to find a solution.”
Palm oil is the second-top contributor to total exports in Indonesia, after coal. It contributed US$19.22 billion, or 10.53 per cent, to the country’s total exports of US$182.57 billion last year.
The Indonesian Palm Oil Producers Association (or Gabungan Pengusaha Kelapa Sawit Indonesia) announced Indonesia produced 31.5 million tonnes of crude palm oil (CPO) this year, of which nine million tonnes is consumed locally and the remainder shipped overseas.
Indonesia’s largest market for CPO is India, accounting for 20 per cent of total exports, followed by the EU countries at 19 per cent and China at 15 per cent.
The Indonesian Palm Oil Board (or Dewan Minyak Sawit Indonesia) said there had been ‘black campaigns’ in Europe to reduce palm oil consumption. Oil palm planters have had to endure false allegations of massive deforestation, land grabbing and lies about orangutan killings hurled by green activists.
Half truths about palm oil, being high in saturated fats, are also being wrongly blamed as causing artery-clogging diseases such as heart attacks and stroke.
The anti-palm oil sentiment is already evident, especially in France where some food manufacturers already put defamatory “no palm oil” label on their products.
Indonesia, the world’s largest producer of palm oil, the raw material used for biodiesel, suffers from recurring defamatory allegations from trading partners in the EU.
Von Rompuy said that he would take Indonesia’s request as “the council’s concern”, according to Foreign Minister Retno LP Marsudi, who accompanied Jokowi during the meeting.
The EU is Indonesia’s third largest trading partner and the second largest foreign investor after Japan.
In his written statement, Van Rompuy said there was still “vast untapped potential” for economic relations between the EU and its Southeast Asian partner.
“The EU looks forward to engaging with the new Indonesian government in negotiations on an ambitious Comprehensive Economic Partnership Agreement. This would give a boost to bilateral trade and investment and create prosperity and jobs in both Indonesia and the EU,” he said.
Van Rompuy also applauded Indonesia’s commitment to the settlement of international conflicts through peaceful means.
“In this context, I underlined the need to achieve a lasting ceasefire in Ukraine with full implantation [especially by Russia] of the Minsk agreements, as well as the need to step up international efforts to prevent the spread of extremism and terrorism,” he said.
“Indonesia is playing an important role on both fronts. It has supported Ukraine’s sovereignty and territorial integrity. It has also clearly condemned the barbaric acts committed in Syria and Iraq under the false invocation of Islam.”
Van Rompuy, who took office in 2009, will step down from his current position by the end of November 2014. He will be succeeded by former Polish prime minister Donald Tusk.
Malaysian Oleochemical Manufacturers Group president Tan Kean Hua said, since 2010, major oleochemical manufacturers have upgraded their fatty acids and fatty alcohol throughput to leverage on economies of scale.
“To date, our members are churning out 2.8 million tonnes,” he said at the sidelines of Oils & Fats International Congress 2014, here, recently.
Following Turkey-based Evyap Sabun’s RM500 million investment in a 400,000 tonne-a-year oleochemical plant in Johor, Malaysia now has 19 oleochemical companies. They produce basic oleochemicals such as fatty acids, fatty alcohols, esters and refined glycerine.
Specialty chemical manufacturers, higher up the value chain, process these basic oleochemicals further and formulate them into toothpaste, soap, dishwashing liquid, laundry detergent, industrial lubricants and even food emulsifiers.
Since January 2013, the restructuring of the crude palm oil (CPO) tax to match that of Indonesia has levelled the playing field with Indonesia and allowed Malaysia’s palm oil exports to be more competitive.
“As long as the investing climate here is on equal footing with our neighbour, we’re able to produce and ship out more from Malaysian shores,” Tan said.
Malaysia has decided to lift the CPO tax for the four months between September and December, while the Indonesian government let the existing CPO tax structure run its course.
As palm oil prices is averaging below US$750 (RM2,512) a tonne, it is attracting zero duty in Indonesia.
“Since CPO price is currently trading below tax thresholds, the effect of lifting the CPO tax or letting it run its course is the same. Both Malaysia and Indonesia are not taxing CPO exports as long as they are trading below RM2,250 and US$750 a tonne, respectively,” he said.
But what if the CPO price were to surpass the threshold levels of RM2,250 and US$750 per tonne?
Tan pursed his lips and tactfully replied, “as palm oil downstream investors, we urge the government to be very careful and mindful about maintaining a level playing field with that of Indonesia.”
“All we ask for is for an equal chance to compete. Malaysia’s tax gap between crude and refined palm oil must mirror that of Indonesia’s. This is vital for the survival of Malaysia’s billions of ringgit of palm oil downstream investments,” he said.
According to the Malaysian Palm Oil Board, the country exported RM8.53 billion worth of oleochemicals in the first nine months of the year. “I think this year, we should be able to do 20 per cent more than last year’s RM9.30 billion,” he added.
“What is a mockingbird? How do you spell it?” he asked.
I explained to him that a mockingbird is a creature that sings beautifully for the benefit of others and never harm anyone.
Atticus said to Jem one day, “I’d rather you shot at tin cans in the backyard, but I know you’ll go after birds. Shoot all the bluejays you want, if you can hit them … but remember, it’s a sin to kill a mockingbird.”
That was the only time I ever heard Atticus say it was a sin to do something. And I asked Miss Maudie about it. “Your father’s right,” she said. “Mockingbirds don’t do one thing except make music for us to enjoy.
“They don’t eat up people’s gardens, don’t nest in corn cribs, they don’t do one thing but sing their hearts out for us.
“That’s why it’s a sin to kill a mockingbird.”
These lines from Chapter 10 are the source of the novel’s title; the idea of “mockingbirds” as innocent people who are frequently misunderstood, discriminated and bullied out of jealousy, prejudice, racism, bigotry, arrogant assumptions and ignorance.
Anyone who tries to hurt “mockingbirds” is actually committing a sin because these kind-hearted souls have done no harm but make the world a better place for those around them.
This novel is set out in the 1930s at a small southern state of USA, when the main form of prejudice was racism. The author lays down the moral of her story with the main characters, Atticus Finch and his young daughter Scout and teenage son, Jem.
It is a sin to turn a blind eye on bullying and hateful racism. It is a sin to kill a mockingbird. Atticus steadfastly defended Tom. He argued that if the jury succumbed to popular sentiment and pronounced Tom as guilty, the black man’s death can be equated to “the senseless slaughter of songbirds by hunters and children.”
In today’s context, the mockingbird is the palm oil industry. The businessman seated across the lunch table asked … so, when the uninformed public chants along with the critics in condemning palm oil … it’s like ignorant children killing the mockingbird?
I nodded. He blinked despairingly. An air of solemnity descend upon us. We drank our green tea in silence.
KUALA LUMPUR: HAMBURG-BASED ISTA Mielke GmbH executive director Thomas Mielke has warned that developing nations will face acute shortage of cooking oil in the next few years if Indonesia and Malaysia continue to slow down their oil palm plantings.
“We must not be lulled into believing the green activists’ skewed ideology. We must differentiate between perception and reality.
“The truth is, there is a huge discrepancy between the supply and demand of certified sustainably produced palm oil. We have 10 million tonnes of this oil but the demand is only a fraction of that.”
Mielke, a well-respected and authoritative vegetable oil analyst, appealed to the public to wake up and smell the coffee.
In addressing an audience of some 500 at the Oils and Fats International Congress 2014, here, yesterday, he said in the last 10 years, the global oil palm planted area had only added 7.5 million hectares.
“This is so small compared to soyabean’s increment of 27.2 million hectares, rapeseed’s 8.8 million hectares and sunflower’s 4.3 million hectares.”
In the last 25 years, global palm oil consumption had expanded threefold. Rapeseed oil purchases, however, only increased by 2.5 times and soyabean oil’s popularity just doubled.
As global palm oil usage increased in the last two decades, so did trade rivalry. Hence, the smear campaign against the oil palm industry.
Oil palm plantation companies face relentless false allegations spread by well-funded green activists. Damning accusations of air pollution, forced labour and land grab in Indonesia, Papua New Guinea and Liberia are wrongly hurled at these corporates.
“Consumers must reject green activists’ protests against the expansion of oil palm plantings. We must not be misled by perception. The current bearish sentiment is not fundamentally justified. The market is in transition,” Mielke said.
Yesterday, the third-month benchmark for crude palm oil contract on Bursa Malaysia Derivatives Exchange fell RM56 to close at RM2,252 per tonne.
“China oilseed output has declined to a 15-year low. Agricultural land is scarce and India’s population continues to multiply. In order to satisfy the daily oils and fats need of an increasing global population, Indonesia and Malaysia must accelerate the planting of more higher yielding oil palms,” he said.
In 2010, the world population was 6.92 billion. By 2020, the figure is estimated to expand to 7.72 billion. As the developing world progresses, the rising middle class’ changing diet for tastier snacks and confectionery will fuel demand for more edible oils. This can only be realistically met by palm oil.
“Every year, the world’s hunger for edible oils grow by an additional five million tonnes. Since oil palm is, by far, the most productive oil crop, we must pick up the pace of planting oil palms. If not, the world will face edible oil shortage by 2020,” he added.
For the first nine months, Malaysia has shipped out RM47.62 billion worth of palm oil products.
Palm oil futures prices have been averaging at around RM2,430 a tonne, slightly higher than last year’s RM2,380 a tonne.
“This year, we should do slightly better because palm oil prices are averaging at a higher level and we’re producing more oil.
“I’m maintaining this year’s crude palm oil output at 19.5 million tonnes, which is slightly higher than last year’s 19.22 million tonnes,” said Malaysian Palm Oil Board economist Ramli Abdullah.
Yesterday, the third-month benchmark for crude palm oil contract on Bursa Malaysia Derivatives Exchange fell RM56 to close at RM2,252 a tonne.
He said palm oil prices are likely to trade range-bound and unlikely to dip below RM2,000 a tonne for the rest of the year as many oil-consuming countries have started to restock on this kitchen staple.
Ramli was speaking at a seminar organised by the Palm Oil Refiners Association of Malaysia, here, last week. Also present was INTL FCStone senior risk manager Ryan Long.
He urged the mid-sized plantation companies, who cannot afford their own team of traders, to subscribe to INTL FCStone’s offer of fundamental and technical market intelligence, forecasting, historical databases, news and econometric analysis of edible oils.
“We can help those mid-sized oil palm companies to manage their business risks. We can help hedge their position for a fee. These businesses are exposed to the volatility of palm oil prices. Risk cannot be eliminated, but we are here to help manage it,” he said.
Some people like their coffee black but I love mine milky.
Whether it is Arabica (highland) or Liberica (lowland) coffee beans, I like it drowned in creamer or milk.
:) Just so you know .. there’s specialty palm fats in coffee creamer.
A couple of months back, my friend from Singapore met up with me at an oil palm estate in Johor to learn how tree breeders come up with designer seeds.
After the visit, we were treated to a delightful stint of premium coffee. It tasted so good she bought a few packets of Paloh Liberica Coffee. She also gave me a packet. Yay!
More recently, we met up again at an edible oils and fats traders’ event. This time, it is at the ballroom of a hotel in Petaling Jaya, Selangor. We were seated at the same table. It’s nice to catch up with friends.
As we parted ways to go to the washroom, a banker approached me and commented my friend is very beautiful and attractive.
I found it strange that he didn’t approach her directly and compliment her in person.
When he asked for the telephone number of my hot-looking friend, I blinked, “well, she usually spends time with younger men who can really move and shake the market.”
He was stunned. Tick, tock, tick, tock, tick, tock …
I guess it didn’t help when I stared back at him dead-panned. After what seemed like an eternity of awkward silence, I quipped, “it’s coffee time.”
Its minister Datuk Amar Douglas Uggah Embas said the MSPO standard and certification would also be the basis for the global branding of Malaysian palm oil.
“The principles and criteria under the MSPO is finalised and field trials have also been completed,” he said at the Palm Oil Refiners Association of Malaysia (Poram) annual dinner, here, over the weekend.
He said Malaysia’s refining industry had been at the forefront of the export market and is working hand-in-hand with the plantation, milling, oleochemical and biodiesel sectors to generate more value added income for the country.
“Currently, there are 58 palm oil refineries in operation with a total annual refining capacity of 26.1 million tonnes,” Uggah added.
Of the 17.6 million tonnes of palm oil processed by the refineries last year, crude palm oil accounted for 15.9 million tonnes, while crude palm kernel oil made up 1.6 million tonnes, he said.
Despite the challenges faced by the refining industry, Uggah assured that his ministry would implement measures to ensure the sector remained competitive and viable.
“We will continue to work with Poram to address these issues, including facilitating better market access through ongoing Trans-Pacific Partnership negotiations and the Malaysia-European Union Free Trade Agreement,” he said.