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IOI boss: More foreign workers needed

October 30, 2010 2 comments

The government should allow plantation companies to hire more foreign workers to harvest oil palm so as not to crimp the country’s palm oil export earnings, a top industry executive said.

Malaysia’s palm oil output is expected to stagnate at 17.6 million tonnes for the third straight year, according to industry observers.

The Malaysian Palm Oil Association, Malaysian Estate Owners Association and Sarawak Oil Palm Plantation Owners Association have been complaining of acute shortage of harvesters for the past three years. They blamed it for the lower palm oil output and export opportunity loss of some RM10 billion a year.

IOI Corp Bhd executive chairman Tan Sri Lee Shin Cheng yesterday reiterated the call for the government to be more flexible in permitting plantation companies to hire skilled harvesters from Indonesia.

“The trees are fruiting, but there’s acute shortage of harvesters and this is affecting the country’s palm oil export earnings.

“The industry has been finding ways to mechanise for the last 40 years and the reality is it is difficult to mechanise. If it were that easy, we would have done it a long time ago,” Lee said.

He was speaking to reporters after IOI’s shareholder meeting in Putrajaya. Also present was his son, Datuk Lee Yeow Chor, who is IOI’s executive director.

The older Lee sees palm oil prices rising further, possibly topping RM3,400 a tonne by the first quarter of next year, as global consumption exceeds supply. “Global palm oil consumption is going up, even in developed nations like the US, Europe and Japan. It is not just in China and India,” he said.

Lee also sees CPO prices trending higher if the current floods in Asia worsen. “The current RM3,000 per tonne level does not take into account the prospects of La Nina. If you did, then the RM3,300 to RM3,400 level is not a dream but a reality.” Yesterday, palm oil futures on Bursa Malaysia Derivatives fell RM24 to close at RM3,061 a tonne.

Four months ago, Indonesia signed a US$1 billion (RM3 billion) climate deal with Norway, under which it agreed to impose a two-year ban on new permits to clear forests. While the Indonesian government has not defined which type or location of forests come under the moratorium, it was reported that oil palm expansion could continue on some six million hectares of degraded and abandoned agricultural land across the country.

Yeow Chor said IOI will continue to invest in Indonesia. “The moratorium is said to limit new concessions, not existing permits,” he remarked.  On IOI’s capital expenditure, he said the group had allocated RM150 million for new plantings and replanting of oil palms.

Some RM30 million has also been set aside for a potential 30:70 joint venture with China’s Zhong Seng Oil & Grains Co Ltd to set up a refinery in Kuantan.

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I’ll show you how to use your holes

October 24, 2010 2 comments

Women in male-dominated professions often have to work twice as hard to attain equal standing. Soil researcher Dr Lulie Melling is one such feisty lady who is willing to wallow in peat swamps, all for the sake of science.

THE MATING CALL of frogs filled the darkened seminar room in Finland. The sound came from the laptop of a Malaysian soil scientist, there to introduce the wonders of tropical peat to her peers in Europe.

Just as Kuching-based Tropical Peat Research Laboratory director Dr Lulie Melling moved into another slide to show the brackish water at peat swamps, someone in the crowd joked that women scientists would most likely scream at the prospect of roughing it out in the deep swamp peats.

Unfazed, Lulie smiled and told the predominantly male audience: “In my hole, the men will scream first”.

A master of double entendre, she explained to the sniggering crowd that many women scientists in Sarawak have, without hesitation, waded into swamp peats to collect samples while male engineers stepped back cringing, their arms folded.

As proof, Lulie showed photos of herself in inky-black pits. She recalled shivering from the cold and putting up with the itch that comes from being submerged in the mildly acidic grime when collecting samples.

There were times when peat muck gripped her shoe soles so solidly that she had to be hoisted out by several people. She showed another photo of herself covered in a heavy layer of black silt up to her neck.

Lulie was in the Finnish city of Jyvaskyla five months ago, bidding to host the International Peat Congress in 2016 (IPC2016) in Kuching, Sarawak. Having won the bid, Lulie said Malaysia can now leverage on this opportunity to draw the international peat scientist community to Kuching to gain a better insight on tropical peat development and conservation.

In an interview with New Sunday Times, Lulie said her quest to study tropical peat started in 1995. She was puzzled by the sago trees’ stunted growth in Mukah, Sarawak. At that time, nobody really knew or cared about what she was doing in the peat swamps. But all that changed when soil science became increasingly linked to the highly-politicised topic of climate change.

As the Internet became flooded with news reports and blog postings claiming that oil palm planting on tropical peat soil contributed to pollution and global warming, the search for credible soil studies also intensified.

Lulie pressed on with her research and in 2005, made an unusual discovery.

Her test results showed greenhouse gas emission from the peat soil planted with oil palm trees was less than that in untouched forest peatland. Her findings caught the attention of other researchers. Since then, citations of her research papers have gone up 10-fold in the last five years. Despite the international recognition, Lulie said there was still much to learn.

Apart from being technologically savvy, soil scientists needed to be physically fit to embark on remote excursions into mosquito-ridden swamps.

Lulie and her team often have to hike through slushy terrain to collect samples and data in the scorching sun and torrential rain.

With heavy scientific equipment in their knapsacks, they sometimes have to forgo tents and sleeping bags. As dusk sets in, they source wood scraps from their surroundings to build temporary shelters and toilets.

But Lulie and her team attest that what was most painful and frustrating was the time away from family and friends.

“Success in most professional careers requires long hours. Long gone are 9am to 5pm days. If you are not present at least 60 hours a week, then you are slacking,” she said. She paused for a while to gaze at a photograph of her family on her office desk. “I’m very grateful my husband and son are very understanding.”

A dedicated government officer, Lulie also organises soil science seminars for farmers throughout Southeast Asia. Her easygoing and jovial nature helps bridge the gap between scientists and rural folk.

Lulie first learnt that humour worked to her advantage when she organised a soil science seminar titled “Big hole, small hole & KY jelly” in 2007. It was a hit among local oil palm planters and even got the attention of more than a handful of chief executives of multi-billion dollar plantation companies from Singapore and Indonesia.

Scientists from Indonesia, the Philippines, Thailand, Japan, Fiji, Iran, and the United Kingdom flew in to learn that when peat soil is compressed by heavy machinery, oil palm roots are able to take stronger hold of the soil and feed on water and nutrients more efficiently.

A British professor came away from the field trip surprised that soil scientists in Malaysia were just as conscientious as in Europe on the need for sustainable peat development.

Lulie’s second seminar, in 2008, also sensationally titled “I’ll show you how to use your holes” was even more popular. Close to 700 participants learnt how to manage the water table and nutrient supplements in a variety of tropical peat fields.

Just as she is well-liked by rural farmers, Lulie is increasingly seen a role model among secondary schoolgirls in Sarawak. Her advice to young women who want to pursue a career in science: “Don’t be afraid to venture into uncharted territories. There’s no point re-inventing the wheel.

“Having scientists who are willing to venture out of the status quo is what drives significant discoveries,” she said.

Fields of Gold: Lifting the Veil on Europe’s Farm Subsidies

October 24, 2010 Leave a comment
For the past 50 years European farmers have benefited from an exceptional set of protection and subsidies via the Common Agricultural Policy (CAP). From 1995 to 2010, the cumulative budget expenditures for European farmers have been of the order of €600 billion.
But the current debt crisis Europe face could spur tranformation of the CAP. Last month, the 27 EU agricultural ministers started a debate on the structure and the level of subsidies farmers should get from the EU budget during 2014-2020.

Although the EU has gradually reduced subsidies to farmers in recent years, at an average of €55 billion a year or 42 per cent of the CAP’s budget, it remains the world’s largest agricultural support scheme.

Oilseed farmers in the EU, rivals of oil palm farmers in Malaysia and Indonesia, are big recipients of CAP subsidies. The CAP acts like a tariff wall around the EU by blocking agricultural imports out while keeping prices higher in the EU.

Among financial institutions and food giants, classified as “farmers” (because they are landowners) and receiving direct subsidy amounting to hundreds of million euros under the CAP are Rabobank, ING Bank, HSBC Bank, Nestle, Unilever, Danone and Friesland Foods.

The Queen of England also qualified for £473,500 in farm aid in 2008 for Sandringham Farms, her 20,000 acre retreat and home to four generations of British monarchs since 1862.

Below is a 6-minute documentary by Jack Thurston, co-founder of http://www.farmsubsidy.org/ , led by a grouping of European journalists, bent on identifying and tracking the amount of subsidies amount going to “farmers”.

Billion-dollar trade war fuels vegetable oil politics

October 23, 2010 1 comment

THE US$40 billion (RM124.4 billion) global palm oil trade makes up almost 60 per cent of the world’s vegetable oils market. The bigger the palm oil industry becomes, the easier it is a target for smear campaigns by rivals via political means.

This is evident as Malaysia and Indonesia capture more market share in the vegetable oils trade, faster than rivals in Europe and North America, oil palm planters have had to endure false allegations of massive deforestation and lies about orangutan killings from western environmental non-governmental organisations (WENGOs).

Every year, Malaysia earns around US$20 billion (RM62.2 billion) and Indonesia US$15 billion (RM46.65 billion), from selling 32 million tonnes of palm oil all over the world, data from industry regulators of both countries revealed.

Oil World, a trade journal, confirmed that last year, Malaysia and Indonesia shipped out the bulk of 36.8 million tonnes of palm oil or 58 per cent of the 63.5 million tonnes of vegetable oils traded globally.

Soyabean, rapeseed and sunflower oils, however, commanded 26 per cent of market share.

Oil World’s data show that while the vegetable oils market had doubled in size since 1990, people around the world have chosen palm oil over other oils. Among 17 major vegetable oils traded in the world, palm oil consumption exceeded soft oils like soyabean, rapeseed and sunflower.

Oil World stated that in the last two decades, global palm oil consumption expanded three times. Rapeseed oil purchase, however, only increased by 2.5 times and soyabean oil’s popularity just doubled.

While global palm oil usage increased, so has the smear campaigns on oil palm planting.

In recent months, Australian zoos initiated a “Don’t palm us off” campaign claiming oil palm plantings in Malaysia and Indonesia caused forest destruction of the equivalent of 300 soccer fields every hour and decimation of over 1,000 orangutans a year. Zoo visitors were told to petition to the Food Standards of Australia and New Zealand to label palm oil on all food products.

When asked to comment, Sarawak Land Development Minister Datuk Seri Dr James Jemut Masing said: “It’s not true, we do not kill and eat orangutans. It is a taboo to do that.

“Sarawak thrives on eco-tourism, it is in our interests to protect our national treasures. I spent 10 days and nine nights trekking at Lanjak Entimau National Park. There were many orangutans swinging from tree to tree.”

He said orangutans are not found throughout the state. These primates are only found in the Lanjak Entimau Wildlife Sanctuary, Maludam and Batang Ai National Parks. No development can take place in these three zones since they are already gazetted as totally protected.

“Therefore, it is not possible for oil palm plantations to encroach into virgin forests,” he told Business Times in an interview in Kuching.

On top of that, Malaysia’s environmental laws and Malaysian Palm Oil Board regulations designate oil palms to be planted on degraded land that had been subjected to extensive shifting cultivation and logged-over forest.

Oil palm cultivation has actually transformed many rural villagers’ lives. “It is through planting of oil palm trees and selling of fresh fruit bunches that smallholders can save enough money for their children to further their tertiary education and become successful professionals. We have palm oil exports to thank for this,” he said.

Estates in Malaysia plant oil palm, rubber and cocoa trees to produce cooking oil, margarine, rubber gloves and cocoa butter for global trade. This is part of the same early-stage growth pattern adopted by every major developed economy in the world, from North America to Europe.

“Now, the very same people who have already achieved developed status, cite fear that such development in Asia will exacerbate ecological degradation and global warming. The European Union (EU) argue against tropical forest conversion for oil palm and rubber tree planting,” Masing noted.

In pushing for a halt in oil palm plantation expansion in Malaysia and Indonesia, European lawmakers and WENGOs had repeatedly said clearing of tropical forests harms biodiversity and emits carbon dioxide into the atmosphere, worsening global climate change.

“Many people believe Greenpeace, Friends of the Earth and Wetlands International are protectors of the world’s forests but … let me ask you … are they bringing their own governments to justice for clear-cutting temperate forests?

“Are they lobbying for reforestation of deciduous forests in their own countries? Are these activists completely altruistic and selfless in their devotion to the world’s forest, wildlife and indigenous people?” Masing asked.

He then adduced reports of Sarawak government spending RM10 million every year to care for and protect orangutans.

While WENGOs campaigned passionately for the fate of orangutans, until today, they had not contributed any money for the rehabilitation of orangutans and the upkeep of their sanctuaries at Maludam, Lanjak Entimau and Batang Ai. “I wish they’d walk their talk.”

By criticising the virtues of oil palm planting and ignoring the evidence that economic development leads to better environmental protection, Masing said it is questionable whether these WENGOs’ true commitment is to the environment or to erection of trade barriers to benefit European rapeseed farmers who are already heavily-subsidised by the EU government.

He then cited findings at www.farmsubsidy.org, run by a European journalists grouping that tracks the EU Common Agricultural Policy (CAP) beneficiaries.

For the past 50 years, European farmers had benefited from an exceptional set of protection and subsidies. From 1995 to 2010, the cumulative budget expenditures for European farmers had been in order of more than €600 billion (RM2.5 trillion).

The CAP acts like a tariff wall around the EU by blocking agricultural imports out while keeping prices higher in the EU.

Although the EU has gradually reduced subsidies to farmers in recent years, at an average of €55 billion (RM238.15 billion) a year or 42 per cent of the CAP’s budget, it remains the world’s largest agricultural support scheme.

On top of that, there are also export subsidies for EU-based food multinationals like Unilever, Nestle and Danone. Last year, the EU spent about €350 million (RM1.5 billion) on export subsidies.

Masing then argued that the EU government’s covert use of taxpayer funds to facilitate environment activists to lobby against the growth of oil palm plantations, in the name of “saving rainforests”, is a blatant violation of international norms and Malaysia’s sovereignty.

“We see these activists holding demonstrations claiming to save rainforests. But are there independent audits to determine the effects of these WENGOs policies and practices on the orangutans and my fellow Bumiputeras they claim to be helping?”

“Who are better placed to speak on behalf of the poor, voiceless and marginalised? The WENGOs and their local affiliates self-proclaiming to be stakeholders or our elected Members of Parliament?” he asked.

He described the WENGOs as whistleblowers, judge and jury, all rolled into one – a stark contrast to check and balance that elected Parliamentarians face.

Masing then referred to the European Commission website at http://ec.europa.eu/environment/funding/intro_en.htm, which revealed the Directorate-General for the Environment had, in the last 10 years, handed out over €66 million (RM285 million) to green NGOs.

In 1998, the EU funding to these NGOs was just over €2 million (RM8.66 million) but last year, the amount nearly topped €9 million (RM350 million). These fundings were advanced by European corporates and labour unions in an effort to protect domestic rapeseed oil farming which, in turn, receive massive CAP subsidies, Masing noted.

KL Kepong to expand landbank

October 22, 2010 Leave a comment

KUALA Lumpur Kepong Bhd (KLK) is expanding its oil palm landbank in Indonesia by another 7,177ha. Currently, the group’s oil palm planted area in Malaysia and Indonesia totals 170,000ha.

Its unit KL-Kepong Plantation Holdings Sdn Bhd is buying 95 per cent of PT. Bumi Makmur Sejahtera Jaya (PT BMS) from Tjong Hasan Agus Salim and Tjhang Ardy Fadrinata.

Since KLK has engaged a high conservation value study on the land and is carrying out a legal and financial due diligence, the deal is likely to materialise in the first quarter of 2012.

PT BMS now holds two Certificates of Izin Lokasi for land measuring 2,336.62ha in Desa Mentawak and Desa Air Kelik, Kecamatan Kepala Kampit, Belitung Timur, and another 4,840ha in Desa Lilangan, Desa Limbongan, Desa Jangkar Asam and Desa Gantung, Kecamatan Gantung, Belitung Timur.

These land are adjacent to KLK Group’s existing plantations in Belitung.

Palm oil vitamin E can fight obesity

October 19, 2010 1 comment

This was published in http://www.naturalproductsinsider.com/ yesterday.

SINGAPORE — Natural tocotrienols offers more health benefits than alpha-tocopherol, the common form of vitamin E.

In a study titled Gamma Delta Tocotrienols Reduce Hepatic Triglyceride Synthesis and VLDL Secretion” published in October 2010 issue of Journal of Atherosclerosis and Thrombosis, scientists found gamma and delta tocotrienols, derived naturally from palm oil, are potent in lowering triglyceride levels by 28 percent in the blood of human subjects after two months of supplementation.

In addition, tocotrienol-treated subjects in the double blind, placebo-controlled human trial showed decreasing trends in average weight, body fat mass, body fat percentage and waist measurement.

The study, hence, points to the potential of tocotrienols as a natural remedy in fighting obesity.

This study demonstrated that gamma and delta tocotrienols work to lower triglyceride levels, by directly suppressing genes that enable triglyceride production (SREBP1/2, DGAT2 and APOB100), suggesting that tocotrienols are able to directly regulate triglyceride synthesis in the body. At the same time, this down-regulation also translates into a reduction in the level of triglyceride transport lipoproteins (VLDL and chylomicron), which distribute fats around the body.

The study supports its in vitro research findings, by demonstrating the triglyceride-lowering effect of tocotrienols in both mice models and human clinical studies.

Moreover, the study also showed that tocotrienols may inhibit the development of atherosclerosis, a medical condition in which fatty plaque, resulting from oxidation of LDL-cholesterol (also known as “bad” cholesterol), builds up inside the arteries. It was found that gamma tocotrienol can enhance the removal of LDL-cholesterol from the blood, by inducing the expression of LDL receptors. This is a key step in achieving healthy blood lipid levels.

This research study, which involved a collaboration between scientists at Davos Life Science (Singapore), researchers at Malaysian Palm Oil Board and Phytopharma Co. Ltd. (Japan), involved 20 human subjects with borderline hypercholesterolemia and was conducted in Takara Clinic in Japan. The subjects were not receiving any cholesterol-lowering medications at baseline.

“Our studies show that tocotrienols have the potential for the prevention or treatment of metabolic syndrome. This research contributes further evidence that natural tocotrienols is a far more powerful form of vitamin E with unique health-related benefits not shared by alpha-tocopherol, the common form of vitamin E,” said Arthur Ling, chief executive officer of Davos Life Science Singapore, a company specializing in the research and development and production of tocotrienols.

Tocotrienols, which are members of the vitamin E family, are effective in lowering the levels of triglyceride, a form of fat in the blood. High levels of triglyceride are closely linked to an increased risk of cardiovascular and metabolic diseases. An elevated triglyceride level is one of the risk factors for the identification of metabolic syndrome, which is linked to an increase risk of cardiovascular disease, diabetes and stroke.

“Other studies have shown triglyceride-lowering effects of eicosapentaenoic acid (EPA), a polyunsaturated fatty acid found in oily fish, which is approved by Japan’s Ministry of Health as a treatment for hyperlipidemia,” said Dr. Daniel Yap, head for Tocotrienol R&D, Davos Life Science.

“This study reveals that tocotrienols have a more significant serum triglyceride-lowering effect than EPA. More importantly, tocotrienol did not have any observable side effects, suggesting that it could become a natural remedy to lower triglycerides effectively.”

Joint Malaysia-Indonesia council proposal to fight palm oil threats

October 19, 2010 Leave a comment

KUALA LUMPUR: Malaysia and Indonesia should set a joint council based in Europe and the United States to fight negative perceptions and unfounded allegations made against the palm oil industry.

The proposal came from former primary industries minister Tun Dr Lim Keng Yaik. The ministry is now known as the Plantation Industries and Commodities Ministry.

He said both countries should set aside some funds for the council and appoint an articulate person to attend all forums organised by non-governmental organisations (NGOs) campaigning against the palm oil industry.

“The person must be prepared to debate with them based on well-researched facts and figures on our side,” Dr Lim said in a keynote address at the Second International Conference on the Future of Palm Oil Business 2010 here on Monday, Oct 18.

“Malaysia and Indonesia as the main palm oil producers must come to the forefront to fight these threats. I am confident that we will win in the end because their campaigns are based on half-truths and sometimes outright lies,” he said.

Dr Lim said despite being successful in penetrating major markets in Europe and the US, palm oil was facing threats from various sides.

“Our success in global markets due to a superior and less costly product prompted Western competitors and their trade and labour union allies to react. They would like to block our product from their markets if possible,” he said.

Fortunately, for consumers across the globe, free trade in goods and services is protected by international laws and norms, Dr Lim said. “So, we are able to sell our goods freely, satisfying rising global demand in the process, at least for the time being,” he said. — Bernama