Archive for December, 2014

Palm oil gains set for longest run

December 31, 2014 Leave a comment
KUALA LUMPUR: (Bloomberg) Palm oil climbed for a ninth day to head for the longest run of gains in more than a decade as flooding in Malaysia hurt prospects for harvesting, compounding a seasonal slowdown in production in the largest grower after Indonesia.

The contract for March delivery rose as high as RM2,305 a tonne yesterday on Bursa Malaysia Derivatives.

A ninth day of rising prices would be the longest run since June 2002, according to data compiled by Bloomberg. Palm oil climbed to RM2,308 a tonne two days ago, the highest level since November 4.

Heavy rain that flooded parts of Malaysia over the past two weeks would continue for at least another week, risking disruption to oil palm fruit harvest, Commodity Weather Group forecasted. The constant downpour is also disrupting rubber supplies from Thailand and this had boosted prices.

“Key growing areas are inundated,” said Phillip Futures Sdn Bhd derivatives specialist David Ng. “Delayed harvesting activities and seasonally lower production will hamper yield levels in coming weeks.”

Output in Malaysia typically drops in the fourth quarter and the initial months of the year, usually bottoming in February.

Production might contract 11 per cent in December, in line with seasonal patterns, while reserves might fall four per cent, said Kenanga Investment Bank Bhd analyst Alan Lim in a report yesterday. Declining inventory should support prices as it reflected stable demand against lower supply, he said.

The current flood-induced rally puts palm oil futures on course for 2015’s first quarterly advance. Prices climbed 3.7 per cent since the end of September, thus moderating this year’s average price decline to only 13 per cent when compared with that of 2013. 

Trade politics fuel smear campaigns

December 29, 2014 Leave a comment
BATTLE FOR MARKET SHARE: Attempts to defame palm oil via food labeling laws in Australia and Europe have manifested into trade barriers. With the United States of America (USA) making false allegations of child labour at the estates, industry veterans tell OOI TEE CHING that palm oil exports are being denied equal opportunities to trade.

IN 2009, France’s largest frozen food maker Findus announced it will remove palm oil from its products in favour of rapeseed oil. French retailer Casino, too, said more than 200 food products would be palm oil-free by the end of 2010. This would also apply to its other retail divisions like Franprix, Leader Price and Monoprix. Another French food retailer Auchan said it was working on ways to guarantee all its products were palm oil-free. 

British retail chain Marks & Spencer also campaigned against palm oil by putting up five-foot displays in its stores stating: “We think that destroying rainforest for palm oil is too high a price to pay for a biscuit.” 

Soon after, Australia proposed the Food Standards Amendment (Truth in Labelling — Palm Oil) Bill 2010. That bill was not passed. If it was, Australian consumers would have been misled into believing that palm oil was bad for health.

At present, palm oil is taxed €100 (or RM426) per tonne in France. In 2011, the French government proposed raising it to €400, so that foodstuff containing it, like Nutella, the popular chocolate spread, would become very costly. The proposal was shot down.

In March 2013, Dutch Board for Margarine, Fats and Oils head Frans Claassen reportedly said negative campaigns could force food companies to replace palm oil and therefore cut its imports. The European Union’s (EU) palm oil imports account for 10 per cent of global production, and nearly half are shipped in via the Netherlands.

Since 13th December 2014, the EU Food Information for Consumers Regulation had mandated specification of vegetable oils (i.e. palm, rapeseed, sunflower, soya) on the ingredient list. 

But food companies had also printed “No Palm Oil” on the front labels, which insinuates that palm oil is bad and needs to be avoided. Today, French chocolate maker Galler and supermarket chain Delhaize are displaying “No Palm Oil” labels on their food packaging.

Malaysian Oil Scientists and Technologists Association president Tan Sri Augustine Ong looked despairingly at photographs of infant milk at a supermarket in Singapore with “Palm Oil Free” signages. 

He shook his head. “It has come to this part of the world, too. This is defamatory. The public is being misled into believing that the saturated fats in palm oil are bad when in reality, they are a necessary part of a balanced diet.” 

A former Malaysian Palm Oil Board director-general, Ong recalled the first attack on palm oil’s reputation in the 1980s when outraged American industrialist Phil Sokolov suffered a heart attack and blamed it on palm oil consumption.

Sokolov started a campaign called “The Poisoning of America” that featured nationwide full-page newspaper advertisements describing the dangers of saturated fats in palm oil. His supporters insisted that palm oil consumption increased blood cholesterol levels and heart disease risk — a misconception that still looms to this day.

Ong acknowledged that palm oil contains a higher percentage of saturated fats compared with soft oils such as olive, soya, rapeseed and sunflower. But it must also be highlighted that half of palm oil is monounsaturated and polyunsaturated — known to increase good cholesterol and benefit the cardiovascular system.

Since the 1980s until now, Ong noted there have been studies proving the hydrogenation of liquid oil into spreadable margarine is the real trigger in raising risks of cardiovascular diseases. 

“The truth is, palm oil does not contain cholesterol and saturated fats are a necessity in our daily diet. The real villains in cardiovascular diseases and diabetes are the artificial trans fats brought on by hydrogenation of soft oils to make margarine.”

He said there are more than 150 studies proving that tocotrienols, vitamin E variants in palm oil, lower bad cholesterol.

Ong noted it is not a coincidence that defamatory campaigns on palm oil originate from rival oil-producing continents which have lost global market share to palm oil, as Malaysia and Indonesia expanded their oil palm plantings. 

Next year, global palm oil output is expected to total 63 million tonnes while soya and rapeseed oils are seen to touch 47 million tonnes and 27 million tonnes, respectively. 

In the 15 years to 2015, Oil World and other authoritative statistics show global palm oil output expanding two times faster than soya and rapeseed oils. 

The world’s top soyabean producer is USA while the world’s number one rapeseed producer is the EU. 

“As more discriminatory measures are imposed on the palm oil industry, exporters from Malaysia and Indonesia are denied equal opportunities to trade,” said Ong, adding that green activists’ smear campaigns deny smallholders of decent livelihoods and consumers of a healthy alternative to trans fats.

Next year, the US expects to reap 108 million tonnes of soyabeans and the EU targets to harvest 23 million tonnes of rapeseed.

These oilseeds are crushed for their oil and the solids are processed into animal feed. Typically, 100 tonnes of soyabean yield 15 tonnes of soya oil. Likewise, 100 tonnes of rapeseed yield 40 tonnes of rapeseed oil.

Australia is the world’s second-largest rapeseed exporter, shipping 2.12 million tonnes a year, mostly to the EU.

The world’s dominant traders, Archer Daniels Midland and Cargill, which are big beneficiaries of the EU farm subsidy under the Common Agricultural Policy, are the buyers of Australian rapeseed feeding into the EU biodiesel pipelines.

Incorporated Society of Planters chief executive officer Azizan Abdullah concurred with Ong that the green activists’ defamatory campaigns against the palm oil industry are very much fuelled by trade politics of the world’s top soyabean and rapeseed producing continents.

On the US Department of Labour’s recent claim that Malaysia’s palm oil industry engages child labour and forced labour, Azizan said: “The credibility of these claims is questionable.”

He pointed out that Plantation Industries and Commodities Minister Datuk Amar Douglas Uggah Embas had refuted allegations of child labour while adducing a comprehensive survey on the labour situation in the estates.

Based on International Labour Organisation guidelines, the study covered workers, employers and labour contractors across 68 oil palm plantations and smallholdings.

A total of 1,632 workers in Selangor, Perak, Johor, Pahang, Sabah and Sarawak were interviewed without the presence of their employers.

In Sabah, this study revealed some of the foreign workers’ children occasionally tag along to the fields. Even then, the children are only allowed to do so after school , on weekends or during school holidays. They help their parents in simple tasks, such as collecting loose fruits.

The study concluded there is no systemic forced labour or child labour in the plantation industry. 

“The way I see it, the children are filial to their parents. On the other hand, oppression is unjust use of power to impose an unequal relationship and deny another’s rights or value. The real victims of trade oppression here are the planters,” he said.

“Why should planters’ rights to grow oil palms and rubber on their land be dictated by coercive terms and conditions imposed by western economic powers? These manifestos hurt the livelihoods of millions of planters in Malaysia, Indonesia, Papua New Guinea and Africa.

“Why are tropical planters being denied their rights to re-invest for the future earnings of their investors?” asked Azizan.

On safe ground

December 27, 2014 Leave a comment
KUALA LUMPUR: ANALYSTS and plantation players have dismissed concerns of a major impact the flooding in the East Coast, the worst Malaysia has seen in decades, would have on palm oil output.

They said that for one, the three severely affected states — Kelantan, Terengganu and Pahang — are not major producing states.

Historically, Malaysia Palm Oil Board’s data have shown crude palm oil (CPO) output tend to trend downwards at the end of the year. 

In December 2013, CPO output was 1.67 million tonnes and in December 2012, it was 1.78 million tonnes.

“There are two key points here. The floodprone East Coast is not a major palm oil-producing area … and the December output is expected to trend lower month-on-month after Malaysia’s production peaked early in August this year,” Maybank Investment Bank Bhd research analyst, Ong Chee Ting, told Business Times yesterday.

“I think in 2015, palm oil supply growth is likely to be muted as planters are going to have a good harvest of 20 million tonnes of CPO this year. The supply concern for next year could buffer the downside in palm oil prices,” he added.

Earlier, a Reuters report sounded the alarm that the ongoing floods could reduce December’s CPO output by 18 per cent from last month’s 1.66 million tonnes, a bigger disruption than previously expected. 

Floods in the three states have, so far, displaced around 100,000 people.

Risks of supply cuts has fuelled bullish sentiment in palm oil prices. CPO futures on the Malaysian Derivatives Exchange yesterday continued its uptrend for two weeks, closing at RM2,250 per tonne as traders factored in December’s seasonally lower production.

Some people pointed out Felda Global Ventures Holdings Bhd (FGV) could be the biggest loser among big players from the ongoing floods in the East Coast as it owns more oil palm plantations there.

A source close to FGV, however, said while its estates may be affected by the rising waters, the damage is likely to be minimal as the estates are far from the flood-prone areas. “FGV has very few estates in Kelantan, which is the worst hit,” the source said.

FGV, the world’s largest CPO producer, has a planted area of 97,605ha in Pahang, 19,542ha in Kelantan and 11,448ha in Terengganu.

A Sime Darby spokesman said its plantation has not been affected.

National Association of Smallholders president Datuk Aliasak Ambia said its members had, so far, not reported any large losses. “Other than the private owners who have been affected by the floods, I have not heard of anything from big plantation firms, such as Felda in Machang, Kelantan,” Aliasak said.

‘Palm Oil Free’ labels damaging to Malaysia

December 22, 2014 Leave a comment
KUALA LUMPUR: THE spreading of “No Palm Oil” or “Palm Oil Free” campaign, first in Europe and now in Singapore, is potentially damaging for Malaysia, said National Association of Smallholders (Nash) of Malaysia.

“It has come to this part of the world,’’ Nash secretary-general Zulkifli Mohd Nazim said, showing Business Times photographs of infant milk cans taken at a supermarket in Singapore with highly visible “Palm Oil Free’’ signages on them.

He said the public is being misled into believing that saturated fats in palm oil are bad when in reality they are necessary in a balanced diet.

Since 13th December 2014, the European Union Food Information for Consumers Regulation mandated specification of vegetable oils (i.e. palm, rapeseed, sunflower, soya) on the ingredient list.  

But food firms had also inserted “No Palm Oil” on the labels, which falsely insinuates palm oil is bad and needs to be avoided. 

In Europe, these discriminatory labels are being promoted by chocolate maker Galler and supermarket chain Delhaize. 

“Since there is no scientific proof that palm oil is bad for health, it is wrong for food manufacturers to go on using the ‘No Palm Oil’ labels,” Zulkifli said.

“These false allegations about palm nutrition must stop.  Such defamatory acts harm our farmers’ livelihoods. We must be more effective in broadcasting the fact that palm oil does not contain any artificial trans-fats and the planting of oil palms helps poverty alleviation,” he said.

Last week, Second Finance Minister Datuk Seri Ahmad Husni Muhamad Hanadzlah announced that the government is forming the National Export Council (NEC) to be chaired by Prime Minister Datuk Seri Najib Razak. The NEC’s main task is to improve the country’s export chain, logistics and output. 

Zulkifli said tackling the smear campaign on oil palm is one of the ways to improve the country’s exports. “The oil palm is Malaysia’s economic security crop,” he said, in reference to the country’s annual US$20 billion (RM69.8 billion) palm oil exports which support some two million jobs and livelihoods along the sprawling value chain.

Indeed, Malaysia’s small farmers are a robust and diverse group. They are an integral part of the country’s cultural identity and their produce contributes significantly to the economy. Last year, Malaysia shipped out RM61.36 billion worth of palm oil to more than 150 countries.

Yum! Yum! dim sum

December 21, 2014 1 comment
Dim sum generally consists of savoury minced meat, vegetables or seafood steamed or fried in a pastry wrap. These are accompanied by sweets like mango sago pomelo, egg tarts and custard. Dim sum is a culinary staple among the chinese.

Eating dim sum is usually a happy occasion, when family and friends gather to sip tea, sample a variety of dishes and chat away their worries. Age differences and generation gap usually melt away as everyone engage in lively banter.

Even in business, a dim sum get-together makes it friendly and casual. In Malaysia, there are many halal dim sum restaurants to choose from.

Lai Po Heen, Mandarin Oriental Kuala Lumpur from Sue Lynn Tiong on Vimeo.

In Cantonese, “dim sum” literally means “a light touch on the heart”, which is an ideal way to describe the small, delicious sweet or savoury dishes. But some say frequent indulgence of this “high saturated fats” affair can stop your heart.

Critics (I suspect they are dim sum haters … ha ha ha) warn these “little eats” are so high in fat and salt that regular consumption could lead to obesity and severe cardiovascular illnesses.

I disagree. The real culprit of heart attacks and stroke are most likely brought on by accumulation of everyday stress, smoking, excessive alchohol, sedentary lifestyle and consumption of artificial trans fat.

The thing is … all natural foods contain all three types of fats; saturated, monounsaturated and polyunsaturated. It is not possible to separate them. So, a food naturally high in saturated fat will also contain the other two.

These three kinds of fats, including saturated fats, are a necessity in our system. When we eat, these fats are digested in our stomach. As these fats get into our intestine and bloodstream, they transport fat-soluble vitamins like A, D, E and K around the body.

Is eating dim sum bad for you? I don’t think so. It’s all about balance. 

Do refrain from over-eating or not eating properly.

Many who aspire to be slim like models featured in magazines and TV, sometimes skip meals. 

Those who succumb to quick fixes tend to abuse laxatives or appetite suppressants. 

Being too thin is linked to menstrual irregularity and osteoporosis in women.

It doesn’t help that many working Malaysians spend much of their time desk-bound in the office. 

In the weekends, time is usually spent watching television or slumped on the sofa playing games on their handphones.

In balancing the amount of calories in the foods and drinks we consume with the amount of calories our bodies use, we need to exercise regularly.

Let’s aim for a balanced diet of meat, fish, dairy and vegetables. There’s no need to avoid certain kinds of food like dim sum. 

It is actually more practical to adopt a more balanced lifestyle, one that incorporates regular exercise that rids accumulated stress pressuring our heart and brain.

There’s no need to deprive ourselves of our favourite foods. Get up from the chair and get moving. Do what you like … be it walking in the park, dancing, football, badminton, cycling, golf or swimming 🙂

Convert 6P status for foreign workers

December 20, 2014 Leave a comment
KUALA LUMPUR: Foreign workers under the 6P programme who have to be sent home should be allowed to be re-employed as legal foreign workers, says the Master Builders Association Malaysia (MBAM).

MBAM president Matthew Tee said a large number and steady supply of foreign workers were needed to keep up with Malaysia’s construction industry, which had been experiencing consistent double digit growth since 2012.

“With the increase in projects, the association has to caution the Government that not all major projects can be delivered on time, especially with the current shortage of workers,” he said in a statement.

MBAM had appealed to the government to simplify the process of hiring foreign workers in order to reduce the manpower shortage. “The best will be if the skilled workers now under the 6P programme can be quickly re-employed as legal workers,” Tee said.

“The association appreciates the govern­ment’s decision to allow the 352,000 foreign workers under the 6P programme to remain in Malaysia for an extra year,” he said.

The Federation of Malaysian Manufacturers (FMM) concurred with MBAM in appealing to the government to convert the status of 6P foreign workers.

FMM chief executive officer Dr Yeoh Oon Tean said the status would help them reach their maximum employment period of 10 years. “Much time and investment has been spent in training these workers only for them to be sent back in three years.

As a result, employers have to submit fresh applications to get new workers in order to replace those who are sent back,” he said in a statement.

Yeoh said employers would also have to bear the repatriation costs for the 6P workers. “For these reasons, FMM supports the call made by the construction sector to allow these workers to continue working in Malaysia,” he added.

The Malaysian Palm Oil Association, which represents the bulk of oil palm plantation companies, has yet to issue a statement on this matter.

Over 150,000 fail to renew work permits

December 20, 2014 Leave a comment
This is written by my colleagues Tharanya Arumugam and Rebecca Hani Romeli.

KUALA LUMPUR: MORE than 150,000 foreign workers under the 6P programme failed to renew their temporary work permits.

Immigration Department director-general Datuk Mustafa Ibrahim said this would turn their status into illegal immigrants, which in turn, increase the number of undocumented immigrants in the country, which stood at five million. 

He said the department was preparing to nab and deport these illegals.

Mustafa said the department had registered a total of 521,734 foreign workers under the 6P programme since 2011.

Under the programme, the government agreed to extend the temporary work permits of 352,493 foreigners, whose employment would end in December 2015. 

He said the remaining 169,241 foreigners under the programme were now illegal immigrants as their temporary work permits had expired.

“Regardless whether foreign workers were under the 6P programme or not, they are illegals if their work permits have expired. If our officers catch them, the illegals will be arrested and necessary arrangements will be made for their deportation,” he told the New Straits Times yesterday.

Deputy Immigration director-general (operations) Datuk Sakib Kusmi said action would be taken against the 352,493 foreign workers if their work permits surpassed the new deadline of December next year. He urged the foreign workers to come forward and apply for their permit renewal.

Sakib, however, said there was no guarantee the temporary work permits would be renewed for those under the 6P programme. “The foreign workers who had applied for permit renewal will be screened in several aspects, such as health and criminal records. Those who failed their medical examinations and found to have committed criminal offences will not have their permits renewed. They will be deported.”

The government had, on Thursday, extended the employment of foreign workers under the 6P programme for another year, effective immediately.

Home Ministry’s acting secretary-general, Datuk Alwi Ibrahim, had said this reprieve was extended to 352,493 foreign workers with Temporary Social Visit Passes, which were still valid and that they were being employed legally.

“Many employers are still dependent on foreign workers under the 6P programme as they have failed to hire local workers. They are not willing to change to other operations that are not labour-oriented,” he said in a statement.

The 6P programme had legalised 521,734 illegal immigrants. They were allowed to work legally for three years (approved sectors) and two years (frozen and outside policy sectors).

Alwi said the decision was made after the government learnt that the loss of a large workforce would affect businesses and the economy. “The decision is meant for employers who have not repatriated their foreign workers after the expiry of the employment period.”

He said employers keen to continue employing foreign workers could apply for Temporary Social Visit Passes renewal at state Immigration offices.

Employers were required to make human resource planning so that their business operations would not be affected after the workers were sent home. “There will be no more extension. The government will not compromise with employers who fail to comply with policies.”