Planters mainly use imported chemical fertiliser because it is proven to boost fruit production. However, it is also expensive and it could pollute rivers. All Cosmos’ value-added fertiliser contains a blend of organic ingredients that let trees absorb more nutrients.
It currently offers more than 20 fertiliser variants formulated for oil palms, vegetables, fruits, flowers and rice.Marketed under the “RealStrong” label, chief executive officer Datuk Tony Peng Shih Hao said this formula mix is able to improve crop yield, increase fruit size and the tree immune system against deadly diseases like basal stem rot.
“We’re expanding. Our Pasir Gudang plant is running at full capacity,” he said. With RealStrong, planters use less fertiliser per tree, which also saves money for growers.
“The micro-organism in the biofertiliser also helps soften the soil in the oil palm estates and will improve yield over the long run,” Peng told Business Times after sealing an agreement with Universiti Teknologi Malaysia (UTM) on a joint research into enhancing micro-organisms’ efficiency in the production of value added-fertiliser. Also present at the signing ceremony were UTM vice-chancellor Prof Dr Zaini Ujang and Massachusett Institute of Technology (MIT) Biology and Health Sciences & Technology Department head Prof Anthony J. Sinskey.
The Johor-based All Cosmos had recently invested RM7 million to set up a research and development (R&D) centre in Pasir Gudang. This will prove to be strategic for All Cosmos as it fits into the country’s policy of boosting organic content, lowering risk of waterway pollution and reducing costly dependence on imported chemical fertiliser.
INDONESIA’S 7.1 million hectares (ha) of oil palm plantation’s current average oil yield of 2.8 tonnes per ha per year is set to surpass the 3-tonne mark by 2015, as trees mature and bear more fruits, says Indonesian Palm Oil Commission (Ipoc) executive chairperson Dr Rosediana Suharto.
“By 2015, the average oil yield at matured plantations should surpass 4 tonnes per ha per year as more young trees reach their prime fruit bearing age,” she told Business Times at the International Palm Oil Congress (PIPOC) 2009 in Kuala Lumpur last week.
“Big planters have their own replanting schedule. Since 2008, however, we’ve extended a helping hand to smallholders via the revitalisation programme. We want to increase our national average oil yield,” she said.
Ipoc collaborates with local commercial banks to facilitate cheaper loans to smallholders to replant their trees.High yielding seeds are sourced from the Indonesia Oil Palm Research Institute (Iopri), which contracts out hybrid seed breeding to 11 producers.
“Some of the Malaysian oil palm investors also have gentlemen agreements to supply high yielding seeds to smallholders within their plasma schemes,” she added.
Under the plasma scheme, the Indonesian government requires foreign investors to set aside 20 per cent of land to nurture smallholders in oil palm planting. While not all Malaysian investors are registered with Ipoc, Rosediana estimates that they operate 1.1 million ha of oil palm plantation there.
On this year’s palm oil output, Rosediana estimates it to be some 20 million tonnes, rising to 21 million tonnes in 2010, barring the occasional El Nino drought.
The United Nations Copenhagen Climate Summit, scheduled to start next month, will see 192 countries meet to set targets on carbon emissions. As heads of states from around the world prepare for the summit, Amsterdam-based Greenpeace stepped up its campaign for a forest moratorium in Indonesia.
Without providing data that can be verified, Greenpeace alleged destruction of Indonesia’s peatland forests alone accounts for 4 per cent of global annual emissions and placed the country third biggest polluter, after the US and China.
Is Greenpeace really a green group? Does it plant trees?
Greenpeace International 2007 annual report shows it received an annual contribution of €212 million (or RM1.07 billion) and the money was spent on propaganda. About €10 million (or RM50.7 million) was used for “forest campaign” but not a single cent went to tree planting.
It organises theatrical demonstrations and dangerous publicity stunts that sometimes end up causing grevious bodily harm and property damage. In the last few years, Greenpeace’s fleet of ships with fancy names like “Rainbow Warrior” and “Esperanza” have terrorised palm oil tankers at seaports in Indonesia and New Zealand.
As the Copenhagen Summit draws near, it has become apparent that Greenpeace, Wetlands International, Friends of the Earth (FOE) and World Wide Fund For Nature (WWF) are political extensions of the ruling majority in the European Union that assumes changes in tropical forest aggravates global warming.
The fact is oil palm planting has helped reduce poverty in developing countries like Malaysia and Indonesia. In balancing economics and ecologics, Rosediana noted these Europe-based environmental group tends to negate agriculture’s socio-economic contribution to the people of developing nations.
At the PIPOC 2009 evening forum on “Palm Oil: Balancing Ecologics with Economics”, United Plantations Bhd executive director and vice chairman Datuk Carl Bek-Nielsen made a poignant statement before an audience of more than 1,000 people.
“There is nothing like poverty and hunger that hastens environmental degradation. Conservation means responsible development as much as it means protection.
“Today there are more than 1.4 billion people living on less than US$1.25 (RM4.22 ) per day. Whatever strategies these enviromental activists pursue to save Brazil or Borneo’s biodiversity must first offer ways for its residents to improve their lives,” he said.
International banks and funding institutions need to change their way of thinking about this.Better health, better education, better economic conditions — that will help to protect the environment.
“Very often we speak of the 3-P principle of People-Planet-Profit.Lets us not forget the basic needs of the people …the right to clean water, electricity, proper housing, healthcare and education,” he said.
Bek-Nielsen then referred to the latest United Nations Food and Agriculture Organisation (FAO) 2009 report, which shows there are now more than one billion starving people in the world. After gains in the fight against hunger in the 1980s and early 1990s, the number of undernourished people started to climb in 1995. Hunger now affects a record of 1.02 billion people globally, or one in six. Among chief causes are financial meltdown, high food prices, drought, flood and civil wars.
FAO director-general Jacques Diouf was reported as saying that in the fight against hunger, the focus should be on increasing food production. “It’s common sense that agriculture should be given priority but …the opposite has happened,” he said.
Falling agricultural investment in developing countries over the last decade has lead to rising hunger worldwide. Arable land for agriculture stays the same but the world’s population continue to grow. Today, it has surpassed 6.5 billion people.
Going forward, it is inevitable that oil palm trees, with its high oil yield, offers a sustainable solution to help feed the world. Farmers in temperate countries have a choice of planting sunflower for vegetable oil or wheat for flour. With more global consumption of palm oil, more land can be free from the less efficient-yielding sunflower, to plant wheat to ensure enough global supply of bread and noodles.
This newstory was published in Xinhua website, the Republic of China’s national newswire service provider.
“Skeptics who do not think that Malaysian oil palms are cultivated and harvested in way that meets the highest standards of sustainability should come and visit us, see if there are gaps in our governance and standards,” he said.
“Help us repair those gaps, should they exist,” Najib said at the Malaysia-Europe Forum while addressing some 300 participants in Kuala Lumpur. Also present were Malaysia-Europe Forum patron and advisor Tan Sri Rafidah Aziz and Sime Darby Bhd chairman Tun Musa Hitam.
As the top palm oil exporter in the world, Malaysia inevitably attracts attention. This include unfounded criticisms, from various quarters, of allowing deforestation to take place for the development of oil palm plantations.
Najib said Malaysia and Europe needed to enhance their understanding of one another, of how they operated, how they perceived the world and how they did business. “By this, I mean to recognise there are fundamental differences between and Anglo-Saxon business model, which is how the European Union (EU) is organised, and the Asian business model,” added Najib.
Recognising the EU as a responsible leader in setting quality standards in various industries, Najib urged Malaysian companies to work with their EU counterparts to resolve their differences and make improvements.
Najib also noted that the EU was important to Malaysia as it was the country’s fourth largest trading partner in 2008, with total trade amounted to US$41 billion.
The Malaysia-Europe Forum aims to promote Malaysia in Europe and vice-versa through the exchange of views, furthering of mutual interests and enhancement of links between and among European and Malaysian stakeholders at a non-governmental level.
Bursa Malaysia is looking to offer fee rebates to futures brokers in an effort to generate more liquidity in the local derivatives market.
“One of the incentives include a fee rebate to liquidity providers,” he told reporters after presenting a paper on “Internationalisation of Malaysian Palm Oil: Challenges and Opportunities” at the PIPOC 2009 in Kuala Lumpur yesterday.
Earlier in the year, Bursa said it will step up efforts on market-making, having seen thin trade of the US dollar-denominated crude palm oil futures, known as FUPO, since its launch in September 2008.
Market-makers refer to futures brokerages and banks that accept risks by quoting both buy and sell prices in futures contracts, hoping to make a profit on the turn or the bid/offer spread.
There are now about 20 licensed futures brokerages facilitating palm oil trading on the Bursa Malaysia Derivatives market.
“We’ll also hold discussions with traders, including palm oil refiners, to gain direct feedback on ways to enhance participation in the derivatives market,” Sree Kumar said, adding that there have been requests for monthly publication of a more meaningful classification of trades on the derivatives market. “We’ll discuss this with our surveillance team,” he added.
Bursa had announced two months ago that it will sell a 25 per cent stake in its derivatives unit to CME Group Inc, to help globalise trading of Malaysian palm oil futures. CME will have the right to use settlement prices for its ringgit-denominated crude palm oil (CPO) futures contract while on its part, it will develop US dollar-denominated cash-settled palm oil futures contracts and related options to trade on CME Globex, the world’s most widely distributed electronic trading platform.
Sales of futures products in the US are regulated by the Commodity Exchange Act and administered by the Commodity Futures Trading Commission (CFTC). The 30.10 rules limit sales activities by those who are not members of the US exchanges, but an exemption is granted if the exchange outside the US demonstrates that its regulatory system provides equal or “comparable” customer safeguards to those in the US.
Sree Kumar confirmed Bursa is applying for the CFTC exemptions. “Once we secure exemptions from the CFTC, we will be able to market our products to US traders. Also, US commodity funds can come in and trade here,” he said.
CME is scheduled to develop a US dollar denominated palm oil futures contract by the first half of 2010. In preparation, Bursa will jointly work out a business plan with CME to market that instrument. “We’ll go on a roadshow with local futures brokers to promote this new instrument and existing products to traders. We’ll also set up a CME Globex hub in Kuala Lumpur then,” he added.
Sree Kumar said once these products are listed on CME Globex, there is a possibility that trading of Malaysian CPO futures could be extended to 22 hours. “Trading hours will most probably be extended from the current 10.30am to 6.00pm. Futures brokers will have to make this commercial decision and of course, it is also subject to the SC’s approval,” he added.
This is an article written by Tun Dr Lim Keng Yaik and published in the New York Times on 6th October 2009.
Climate negotiators meeting in Bangkok this week in preparation for the Copenhagen climate summit in December seem no closer to an agreement on how best to balance economic growth and protection of the environment.
One obstacle comes from Europe, where an alliance of green activists, industry and policymakers has targeted Asia’s palm oil industry as a global villain and is threatening a trade war. These critics are wrong on the economics and the ecology.
In June, the European Council issued guidelines on the Renewable Energy Directive, which was adopted in December 2008. Its purpose is to encourage European consumers to use greener, sustainable sources of energy, such as biofuels.
This is a fine idea in principle. But as it turns out, the directive is a trade wolf in green sheep’s clothing.
Europe is one of the world’s leading producers of biofuels, mostly made from rapeseed oil. It accounts for two-thirds of the global market, with Germany as one of the largest producers.
Asian producers are increasingly important players in the global biofuels trade. Asian biofuels are a byproduct of palm oil, a sustainable vegetable oil and food staple for which demand is rapidly growing in Asia.
Palm oil biofuel cannot be produced in quantities that will rival vegetable oil-based fuels, but it is cheaper than rapeseed.
So, in predictable fashion, Europe’s agricultural industries are defaulting to their traditional practice when a cheaper and better product becomes available to European consumers. They have inserted trade barriers in the Renewable Energy Directive to restrict imports of biofuel. And, as usual, they are pretending that the barriers serve another purpose — in this case preserving forest biodiversity.
This joins the protectionist play to a broader campaign to discredit palm oil. European policy-makers echo arguments made by Western environmental activists that biofuels from Asia are environmentally troublesome because oil palm plantations reduce forest biodiversity.
These claims do not withstand scrutiny. Forest biodiversity is achieved by reserving areas of natural forest.
The Worldwide Wildlife Fund for Nature (WWF) says that around 10 per cent of the world’s forests needs to be conserved to achieve this goal. More than half of Malaysia’s land and one quarter of Indonesia’s, the two largest palm oil producers, are already set aside.
Conversely, the WWF target in forest preservation has not been reached in most of the European Union. In Germany, land reserved to conserve natural forest is just 4 per cent.
Where are the environmental activists’ demands to restrict E.U. trade to protect Europe’s forest biodiversity?
Furthermore, Asian biofuel is significantly more sustainable than European biofuel. It also uses much less land to produce the same amount of energy and generates 10 times as much energy as is required to produce it. By contrast, biofuels produced from European rapeseed generate only four times as much energy relative to the input.
Despite this, European biofuel producers and environmental activists are pressuring the E.U. to increase the trade coercion in the Renewable Energy Directive by restricting imports if something called “Indirect Land Use Change” occurs when they are produced.
Let me be plain about what this means. The conversion of forest land to produce higher value products like palm oil, cocoa or rubber is the leading means of reducing poverty in most developing countries. The idea being toyed with in Brussels is to use the threat of trade sanctions to pressure countries into giving up the leading anti-poverty tool.
Research from the Stern Review showed that the economic benefit to poor countries of growing palm oil vastly exceeded the value of any other use of the land. The World Bank, for example, found that developing palm oil was one of the most effective ways of reducing poverty in Indonesia. In Malaysia, palm oil was developed to create livelihoods for poor, landless farmers.
Asian governments and businesses are not asking for much — simply the chance to develop their natural resources as Europe did for hundreds of years.
There is a historical tendency in Europe to seek to mold others in its image. This was part of what some styled the “white man’s burden” during the colonial era. Has this tendency reasserted itself as the Green man’s burden?
Tun Dr Lim Keng Yaik has always delivered lively speeches when he was Primary Industries Minister from 1986 to 2004. His sharp wit and dry humour make him a favourite among journalists. Yesterday, he packed the hall with laughter, when he pitched for a US$20,000 salaried job, to counter smear campaign against palm oil in the US and Europe. My colleague Zaidi Ismail reports from PIPOC 2009 in Kuala Lumpur.
TUN Dr Lim Keng Yaik, a former primary industries minister, has proposed that Malaysia appoint an oil palm ambassador to the US and Europe to counter all the negative perceptions and unfounded allegations made against the commodity.
The Primary Industries Ministry is now known as the Plantation Industries and Commodities Ministry.
Dr Lim said the ambassador can be dispatched on the ground straight away to do “battle” with international non-governmental organisations (NGOs) before any further damage is made on the commodity. “The ambassador should be smart like me or better than me. The person should be articulate and be able to out-smart, out-debate and out-talk all these NGOs who are spreading lies about palm oil and pay the ambassador US$20,000 a month (RM67,600).
“Equipped with facts and figures, the ambassador should be able to dispel all their unfounded allegations and paint a true picture on oil palm trees,” Dr Lim said in his keynote address at the International Palm Oil Congress 2009 in Kuala Lumpur yesterday.
He said the lies hurled by the NGOs is similar to the anti palm oil smear campaign back in the 1980s, launched by the American Soybean Association under the guise that palm oil is harmful to human health. “This time, the NGOs are back at it again under the guise that oil palm trees destroy the environment and orang utans. I call on the industry to fight back and act before it is too late.”
In a no-holds barred speech, Dr Lim said the attacks are launched by oil palm rivals such as soybean and rapeseed, which are unable to compete with oil palm which now controls 30 per cent of the world’s edible oils and fats market compared with less than 10 per cent in the 1980s. “They failed in the 1980s to smear palm oil because they forgot that I am a medically trained doctor and now they realise palm oil is not harmful to health compared with trans fat.
“Now they are hitting us under the belt and using the orang utan to scare away the consumers. We should fight back and the government is doing all it can by sending trade missions,” he added.
He said the world’s 17 edible oils and fats should not grapple with each other for market position as the world is big enough for all the edible oils. Rather, they should ask themselves whether the industry is big enough to supply the world’s growing population.
While I was on leave for a week, my colleague Hamisah Hamid interviewed Glenealy Plantations (M) Bhd.
Glenealy Plantations (M) Bhd is optimistic it will do better in the current year ending June 30 2010 thanks to higher crude palm oil (CPO) production and stable CPO prices.
Managing director Yaw Chee Ming said if CPO prices stay at the current level of about RM2,200, the company is due to perform better in 2010.
“Although CPO production is expected to trend up towards year-end, the CPO prices depend on climatic condition, such as El Nino and other external factors like the coming oilseeds crop sizes, the direction of crude petroleum price and the CPO import tariff in major importing countries,” he told reporters after the company annual general meeting in Kuala Lumpur yesterday. Also present were chairman Chan Hua Eng and finance director Cheam Dow Toon.
Glenealy, a relatively small player, saw net profit fell two-thirds to RM33.2 million in 2009 on the back of RM175.8 million revenue, which fell about a quarter from the previous year. The fall was mainly due to lower CPO and palm kernel (PK) prices, which dropped about a quarter and a third respectively, from the previous year.
In 2009, the group achieved an average CPO price of RM2,225 per tonne and PK price of RM1,122 per tonne, which is lower than the average RM3,055 per tonne for CPO and RM1,781 per tonne for PK in the previous year.
Yaw said CPO production, which stood at 76,000 tonnes as of June 30 2009, is expected to rise further as more trees mature. For the current year, the group’s total matured area in Sabah and Sarawak will reach 20,251ha. The group now has a total landbank of about 70,000ha, of which 30,000ha is located in East Kalimantan, Indonesia, and more than 40,000ha in Sabah and Sarawak.