Mapa appeals to govt to replace monopoly bodies

KUALA LUMPUR: Malayan Agricultural Producers Association (Mapa) appeals to the government to replace monopoly bodies such as Fomema Sdn Bhd with a more economically competitive system of medical examination, of which employers can directly pay their foreign workers’ doctors.

“From an economic standpoint, it would be more prudent to allow open competition of supply and demand to determine the rate of medical examination fees,” said Mapa president Tan Sri Mohd Noor Ismail.

“Furthermore, the monitoring of health matters concerning all workers should be vested directly with the Health Ministry and not by a consortium company,” he told Business Times after chairing Mapa's annual general meeting, here, yesterday.

Fomema was established in 1997 to manage and operate a mandatory foreign worker health screening system in Peninsular Malaysia. It does not conduct the medical checks but farms it out to private clinics and takes a cut on the charges.

By its own estimate, Fomema makes at least a RM45 million profit a year — a RM25 service charge and RM5 for issuing a computerised certificate for each of the 1.5 million legal migrant workers every year.

It was reported that Fomema has been using the same fee structure since its inception. It charges RM180 to arrange medical screening for every male worker and RM190 for every female worker. The additional RM10 is for a pregnancy test that all female workers must take.

Out of the RM180, RM60 is for the doctor’s consultation, RM65 for urine and blood tests and RM25 for X-ray. That works out to RM150 each.

Mohd Noor also noted that a new consortium firm, namely the Foreign Workers Centralised Management System (FWCMS), will place tremendous financial burden on farmers, rubber smallholders and oil palm planters. 

It is purportedly set up for the implementation of medical examination of workers in the source country and for the visa with reference, or VDR, online application.

“This kind of consortium company would not be established for free. Further financial burden is going to be imposed upon our members. We fear this move would further increase cost of agricultural production without any real improvement in productivity,” Mohd Noor said.

“As of todate, we’ve not been not informed by the government if FWCMS is a one-stop centre for matters concerning foreign labour affairs,” he added.

Is this reporter "taking sides"? Is he bias?

Three years ago, at Washington, DC, USA, Bryan Thompson, a 14-year-old student at Colonial Forge High School was suspended for running onto the field during a school football game — wearing a banana outfit.

Thompson was interviewed by WRC reporter Pat Collins (watch the video, above). Thompson wore the infamous banana outfit. Collins, not to be outdone, dressed like a grape, in a not-so-subtle attempt to make the point that Thompson was doing nothing wrong.

"It starts with a banana," Collins said in his report. "Then all of a sudden you have an apple, and an orange, and then maybe a grape, and before you know it, you have fruit salad in the schools. We can't have that."

Students who protested Thompson's 10-day suspension were given detention. 

Faced with an onslaught of criticism — from reports like this one, as well as advocacy groups like the ACLU, school principal Karen Spillman resigned. All the suspensions were subsequently lifted.

Now, you might ask what has this got to do with oil palm planters and palm oil companies? 

Well, it's about "taking sides" in speaking out against injustice and trade oppression oil palm investors and palm oil exporters face. 

Is it fair for mainstream newspaper reporters to be vilified and branded as bias for "taking sides" with oil palm planters when they lay down the facts on the double standards definition of "forest destruction" between that of tropical Asia and western countries' pine forest?

Even some oil palm planters, who are so used to being relegated the whipping boy of modern agriculture, exclaim in relief "that reporter is on our side, she's on our side." 

It's time for oil palm planters to step up to the plate in better communicating their contribution to the economy. Employees of plantation companies must learn to be comfortable with their show-and-tell skills and think on their feet. These "soft" skills are a necessity as Malaysia's economy shifts into a knowledge-based one. 

It's time for decision makers of the palm oil industry to expect higher standards of journalism from editors in uncovering the truth on insidious trade barriers and the nasty implications on Malaysia's economy. After all, journalism has always been the last bastion of justice when other avenues fail. 

Is the planting of oil palms anymore polluting than rainforest? Ladies and gentlemen, let's use our common sense.

Rainforest has more variety of big animals living there, right? Animals, trees and plants in the forest die from old age and diseases. So when termites feast on dead trees and maggots eat up dead animals, they emit carbon dioxide, yes? 

So, logically, one can conclude that estates planted with young oil palms actually produce more oxygen and absorb more carbon dioxide than old rainforest.

If saturated fats is bad for health, why do the same people who demonise palm oil advocate fish oil supplements, butter and cheese which certainly have higher content of saturated fats?

If oil palm planters think the current situation is just a straightforward trade rivalry with rapeseed, soybean and sunflower farmers .... think again. Take a few steps back and try and see the bigger picture. I leave you with the wise words of Albert Einstein.

Courage under fire

Courage under fire means being able to remain calm and doing the right things when most people would panic.

Many corporate and government agency leaders like to think they have courage – few actually do.

Courage should not be mistaken for reckless bravado or dismissive arrogance.

Courage is actually having the conviction to inspire people to do what’s right (and usually, difficult) rather than what’s popular and easy. 

It is choosing between doing the right thing (potentially risking yourself jobless and your family to unpopular backlash) versus turning a blind eye to a situation in order to “play it safe.”

Courage is necessary in leading one to do the right things in life. People are more likely to follow a leader  who asks of them to sacrifice time away from loved ones and struggle against adversities  when he or she is willing to do the same.

In my many years of interaction with people in Malaysia's palm oil industry as a reporter, I've noticed a pattern or two. Here's my summation of how courageous leadership is demonstrated. 

It takes the form of necessarily venturing into the unknown to seek business growth opportunities, working in collaboration (not isolation), cutting losses, being decisive in making tough choices, listening rather than speaking, admitting faults, forgiving faults of others, not allowing failure to dampen one's resolve to succeed and practising ethics in furtherance of good governance.

Courage is teachable and learnable – proof of this are in the moments we step up to the challenge and overcome our fears. 

I totally agree with Marilyn Monroe that fear is stupid and so are regrets. 

Courage makes us faithful, whereas the lack of it makes us fearful. Whether we look back on our personal experience or people around us, it is always better to stand for courage than regret failing to do so. 

Courage should not be defined as the absence of fear – it is stupid to assume brave people have no fears.

Courage is actually finding the strength to move ahead in the presence of fear.

In short, courage isn’t exclusive to the few. Courage is shown in everyday decisions.

We’re remembered for the decisions we make or don’t make. We're acknowledged for the courage we display or fail to exercise.

There are great rewards for those who choose the path of courage. This is because courage will give one the humility to accept bravery in others rather than stifle it. 

True leaders who consistently demonstrate courage will stand apart from the masses. They earn the trust and loyalty of those whom they lead.

Leadership always begins with one courageous act – make that calculated decision. Ladies and gentlemen of the palm oil industry, will you be brave enough to do what is right for the common good?

From ‘dirty’ gas to clean energy

Sludge from palm oil mill, when left idle, emit dirty gases like methane. Plantation companies tell OOI TEE CHING how they use green technology, in the form of biogas plants, to turn these agricultural waste to fuel up their mills and light up community houses and schools in their estates. 

PALM oil millers in Malaysia are leading the way in "greening" the palm oil supply chain by capturing greenhouse gas before it enters the atmosphere and turning it into green energy and organic fertiliser. 

Millers capture greenhouse gas from the sludge and turn it into renewable energy by investing in biogas plants. These anaerobic digesters behave like our stomach, containing friendly bacteria that feed on organic matter to produce flammable gas called methane and digestate that can be turned into fertiliser.

In an interview with Business Times, Sime Darby Plantation Sdn Bhd managing director Datuk Franki Anthony Dass noted his company's involvement in biogas plants has gained momentum in recent years because this environmentally-friendly initiative of stemming greenhouse gas emissions has its socio-economic benefits, too.

Apart from producing renewable electricity, the biogas anaerobic digestion process also converts environmentally polluting sludge into organic fertiliser that can be used to increase the yield of planted crops. 

By running a large combined steam and power generator, a palm oil mill becomes a self-sustaining powerhouse lighting up the houses, places of worships, schools and sporting facility in the estate, Franki explained.

Planters get to reduce their reliance on fossil fuels and any surplus electricity can be sold to Tenaga Nasional Bhd (TNB) if the mill happens to be located near the power grid, he added.

Sime Darby has, so far, put up two biogas plants in Peninsular Malaysia. In working towards reducing its operation’s carbon footprint, the group aims to have 18 mills installed with methane capturing facility by 2020. 

Palm oil clients from developed nations, like the EU, are happy to learn of the green movement among oil palm estates to capture and recycle these greenhouse gas into good use. This effort adds value to the notion that palm biodiesel is responsibly produced with environmental protection in mind.

If palm oil mills are located near TNB's grid and they have excess electricity to sell to the government, they can bid for the renewable energy quota laid out by government agency Sustainable Energy Development Authority (Seda).

An agency under the Energy, Green Technology and Water Ministry, Seda facilitates supply and renewable energy usage in Malaysia via feed-in tariff (FiT). This mechanism guarantees renewable energy producers a premium selling price over that generated from depleting and finite sources such as oil, gas and coal. 

Seda divides the renewable energy fund – among biogas, biomass, small hydro and solar photovoltaic – on a quota basis. Todate, biomass and biogas projects are allocated 222MW or only 37 per cent of the total 601MW renewable energy quota. 

Oil palm biogas plant operators, which had successfully bid for the renewable energy quota and accorded licences by Seda receive 32 sen per kWh under the feed-in tariff (FiT) when they hook up to the national grid. If they had leverage on home grown technology, use agricultural waste and efficient gas technology they would receive bonus incentives of 5 sen per KWh, 8 sen per KWh and 2 sen per KWh, respectively.

At the current FiT for qualified biogas plant operator, one can only expect minimal returns after 10 years. Franki said a more targetted package of government incentives could spur more palm oil millers to invest in waste-to-energy projects and help reinforce the notion that oil palm planting is a sustainable practice that balances the needs of People, Planet and Profits.

BELL Group, the pioneer among palm oil millers in installing biogas power plants, concurred with Sime Darby that energy recovery from waste is ultimately a waste management issue and not just a green power plant activity. 

BELL Group chief executive officer Puan Sri Liana Low noted the onus and cost of connecting biogas plants to TNB's grid lie with palm oil millers. It can be very costly if the mill is located a few kilometres away from the power grid.

She suggests the cost of laying the cable be shared between TNB and renewable energy producers. "Apart from the formidable cost of cabling up, there is also the logistical and technical challenge if there is a fault or sabotage of the connecting cable. This burden is too taxing on palm oil millers."

She urges the government to consider revising the nation’s electrification master plan. One can look to Indonesia where the authorities have facilitated isolated grids that are close to several biogas and biomass power plants for the benefit of rural communities. "A joint study between the World Bank and the Indonesian government showed installation of isolated grids proved to be cost effective in rural and island electrification."

It is common knowledge that solar only thrives on a few hours of intense sunlight while biogas power plants are able to run 24 hours a day, seven days a week. At current technology, solar conversion to electricity efficiency is only around 15 per cent while for biogas, it is close to 60 per cent. That means the conversion of biogas to electricity is four times more efficient than sunlight to power.

There had been reports that the government's allocation of renewable energy quota to the solar sector is seen to be inefficient use of the renewable energy fund. Also, compared to biogas investments, the solar sector is highly dependent on foreign technology and imports. 

Given the relatively limited FiT budget, which is funded by a 1.6 per cent levy on electricity bills of heavy users in Peninsular Malaysia and Sabah, it would a step in the right direction for Seda to further fine-tune its incentives to spur more participation from the biogas sector.

Current first generation biogas plants take about a month to generate a reasonable amount of biomethane. Going forward, Low highlighted that biotechnologists and engineers are seen working on second generation know-how that could speed up the digestion by 10 times to just three days.

Separately, Kuala Lumpur Kepong Bhd (KLK) executive director Roy Lim Kiam Chye concurred that Seda's FiT for qualified biogas plant should take into consideration the high investment and maintenance cost millers have to shoulder.

"The current package of tariffs for biogas plant operators of 42 sen per KWh, which include bonus incentives for agricultural waste management and engine efficiency, is still too low. It has got to be higher as biogas plants doubles up as a carbon emission savings initiative," he said.

"This year's 25MW quota allocated to biomass and biogas operators, or 39 per cent of total 65MW renewable energy quota is actually not enough. If a higher quota allocation is accorded to biogas plant operators, it can also help light up more energy-starved places in Sabah," he added. 

"It would be to the government's interest to further incentivise and widen the renewable energy quota to biogas plant operators. Apart from its relatively high energy conversion efficiency that makes payment from the renewable energy fund worthwhile, palm oil millers' investment in this biotechnology initiative leads to cleaner air and creation of more high-skilled jobs," Lim said.

KLK has, so far, installed a biogas plant in Sabah. By 2020, it aims to put up three more at its estates in Peninsular Malaysia.

Not all 368 palm oil mills throughout Peninsular Malaysia and Sabah can benefit from Seda's FiT because many are located far away from the national power grid and the cost to connect is just not commercially viable.

Going forward, Lim noted there is still much potential in biogas because millers can leverage on local know-how to purify biomethane and sell them as compressed natural gas to industrial users such as oleochemical producers or as transport fuel for taxis and express buses. There is also the possibility of compressing the methane into cooking gas tanks for household use in remote areas.

Felda Global Ventures Holdings Bhd (FGV) group president and chief executive officer Mohd Emir Mavani Abdullah said the group has, so far, put up 13 biogas plants at its estates. 

"By 2020, we aim to push this figure to 51. As the world’s largest crude palm oil producer, we're committed to reducing our carbon footprint and improving our environmental friendly practices for the benefit of our community."

He highlighted FGV's biogas facility at Umas palm oil mill in Tawau, Sabah is now generating 1MW for a rural electrification. Settlers, commercial entities and staff quarters are benefiting from this effort. 

Over at Lahad Datu, FGV's biogas plant at Mercu Puspita mill is also generating 1MW for use by residents at Bandar Cenderawasih township.

In theory, biogas plant operators is accorded a maximum FiT incentives of up to 47 sen per KWh. In practice, however, FGV's Mavani concurred with KLK's Lim that biogas plant operators can only achieve 42 sen per KWh. "We're not able to benefit from the 5 sen per KWh incentive for homegrown technology because currently there are no local gas turbines manufacturers we can source from. We've no choice but to import them from Germany and Spain," he said.

Boustead Plantations debuts with mild premium

This is written by my colleague Zaidi Isham Ismail.

KUALA LUMPUR: Boustead Plantations Bhd opened at RM1.66, or 4 per cent premium above its offer price of RM1.60 when it made its debut on the Main Market of Bursa Malaysia yesterday.

Boustead Plantations vice-chairman Tan Sri Lodin Wok Kamaruddin said the group is poised for a bright outlook on aggressive expansion drive.

“As we move forward, we are implementing a three-pronged strategy, namely expansion via land acquisition, continuous improvement in best practices and dedicated research and development efforts.

“Over the next five years, we plan to increase our total planted area by 20,000ha from 70,991.2ha and acquire existing plantation estates and plantations reserve land, primarily in Malaysia,” said Lodin.

He said the company is open to re-entering Indonesia's oil palm plantations again. 

Lodin said RM420 million of the gross proceeds from the initial public offering (IPO) will be used to part-finance the acquisition of 10,000ha of plantation land within the next three years.

The IPO is said to raise RM928 million from a public issue.

Another RM96 million will be used for replanting old trees with higher yielding seedlings, RM390 million to repay parent Boustead Holdings Bhd and RM22 million will be used for estimated fees and expenses for the IPO.

Lodin said Boustead Plantations intends to have a dividend policy of returning at least 60 per cent of profits to shareholders.

"I'm a soh chai ..."

I was at the Palm Industry Labour: Issues, Performance and Sustainability Seminar 2014 organised by MPOB in Kuching recently. I met this very tall man who told me that he has been working for his employer for 30 years.

I gestured "Wow!" 

He squint his eyes and gave me a wry smile, "yea, I'm a soh chai (means dull-witted in Cantonese) for staying so long with the same company."

It was my turn to squint my eyes. 

He laughed when I mentioned he seemed like a person who values yi hei (means loyalty in Cantonese).

I remember meeting this very tall man for the first time last year at the Incorporated Society of Planters' (ISP) seminar and fellowship award ceremony held in Sibu. 

This very tall man and his colleagues flew in from Ipoh with their boss. As I listened to the speeches delivered from the stage, I also looked around the hall. 

I was intrigued with the way he interacted with his boss. In a matter of a split-second side glance from his boss, he knew what to do. 

This is testimony of his boss' skillful ability in nurturing strong bonds of loyalty that is the "acid test" of leadership.

In progressive oil palm plantation companies, mutual trust and respect is normal practice. It's not about paternalism but that of genuine partnerships. 

Employees are treated fairly, accorded the opportunities to delve professionally in meaningful career pathways. In return, employees owe the company their willingness to participate in business growth. 

Although I'm not privy to further interactions between the very tall man and his boss, I would take a guess ... the following takes place.

1. He is not afraid to tell his boss.
He's not a brownoser. He is most likely to tell his boss some ideas may not work or had made a mistake. He knows the boss values honesty more than "saving face". He trusts his boss genuinely cares about doing what is best for the company and other colleagues.

2. He never criticises his boss in front of others.
He gives his boss the respect he expects to receive.

3. They disagree in private but he totally supports his boss' decisions in public. 

Debunk the Junk

Gallivanting around the world in search of the latest global remedies, alternative health expert Dr. Bryce Wylde stopped by the Steven and Chris Show to share the facts about Malaysian red palm oil. “Natural medicine is still very buyer beware,” Wylde cautioned. “My goal is to debunk the junk.”

To accomplish his due diligence about Malaysian palm oil, Wylde visited Sabah, Malaysia’s Northern Province. There, he trekked through the rainforest. As he soaked in the humid tropics he experienced wildlife, flora and fauna flourishing in an balanced setting.

He also toured plantations and mills and discovered how palm oil is produced according to eco-friendly practices.

Wylde is a strong proponent of red palm oil’s health benefits. “Within the palm fruit you’ll have a nugget, the kernel, and that’s what they use in North America a lot for these puffy snacks,” he said, referring to palm kernel oil. “The outside, the mesocarp, is a brilliantly red-orange color and within it, it contains lots of beta carotene carotenoids, and a little-known form of vitamin E called tocotrienols.”

Wylde explained that tocotrienols have had a great impact on the scientific community. Dr. Chandan Sen, a well-known researcher, has been funded by the National Institutes of Health to study their effects on stroke and stroke recovery, cardiovascular disease, radiation exposure and cancer.

“There are just unbelievable effects of these tocotrienols that come from red fruit palm oil,” Wylde told Steven and Chris Show.

Below is another video of Wylde on Canada's Breakfast Television. There's even a few seconds of footage of him doing a yoga handstand while holding to the sides of the boat. Ha ha ha ... he was imitating a cluster of cheeky proboscis monkey and orangutan hanging from the trees at the side of the river.

He tells Breakfast Television how he decided to conduct his own due diligence and see if there was really any wanton deforestation and alarming wildlife endangerment in Malaysia after he had been alerted by Greenpeace and Jane Goodall Institute.

He flies back to Canada and shares his discovery with concerned folks the best practices that is being carried out by oil palm farmers.

Malaysia's palm oil industry adhered to more than 15 laws and regulations including the Land Acquisition Act 1960, Environmental Quality Act 1974, Environmental Quality (Clean Air Regulations) 1978, Pesticides Act 1974 (Pesticides Registration Rules), Occupational Safety and Health Act (1977), and Protection of Wildlife Act 1972. 

The industry is also complying with Hazard & Critical Control Points (HACCP) and the Environmental Impact Assessment (EIA) requirements. Being sensitive and proactive on current environmental concerns, the industry is actively pursuing ISO 14000 standard series discussions and formulations notably on climate change, life cycle analysis (LCA), eco-labeling & Design for the Environment (DfE), environmental communications, and environmental management system.

Wylde then went on to list down the health goodness of the little-known variant of vitamin E called tocotrienols, found abundantly in red palm oil. He finds that this high antioxidant content in palm oil suggests that this cooking oil could be a potent “anti-cancer food”. There are also more recent medical studies suggesting that tocotrienols may help fight skin, stomach, pancreas, liver, lung, colon, prostate, breast, and other cancers.

Wylde concludes the breakfast chat with a nutrition tip to Canadian viewers that one can take palm oil vitamin E supplements to neutralise oxidative stress after rigorous exercise.

Can you see the truth from the lies?

The video above reflects reality on the ground in Indonesia. It is in response to lies told in the video below which is peppered with twisted half truths and exaggerated allegations ... very typical in smear campaign videos made by mercenary activists; some of whom are methodically conniving and some .. laughably impressionable.

There are no "good" or "bad" environmental activists or business partners or policy-makers. Take a deeper look at this global intricate play of politics and greedy trade domination.

Take your time and decide for yourselves; What's the truth? What are the facts and figures that can be scientifically verified? Who are telling lies?

To all oil palm planters ... look around you and take a more discerning perspective. Some stakeholders may be in the same boat but they have been drilling holes. 

Maybe they succumb to selfishness, arrogance, revenge-seeking and greed. Select information are withheld to give a desired impression ... a façade that is far from the truth. Why? money .... very big money.

Many people in the palm oil industry have yet to connect the dots. Every year, Malaysia exports some US$20 billion worth of palm oil to more than 150 countries. 

In negotiating the terms of  the Trans-Pacific Partnership Agreement (TPPA) with the USA — the lead negotiator of TPPA, it would the right thing to do for Malaysia's Ministry of International Trade & Industry policymakers to include the interests of oil palm planters and exporters. 

The same goes for Malaysia's negotiation of the free trade agreement (FTA) with the EU.

Keen attention must be focused on dismantling disguised trade distortion measures oil palm planters are facing. After all, Malaysian government officials must remember that their salaries are derived from hard-pressed taxpayers' money .... and guess what? Malaysia's biggest taxpayers, on a sectoral capita basis, are the oil palm planters.

May the select few government officials, who considers serving the country an honourable duty, take the lead in fulfilling the most basic expectation of taxpayers; People First, Performance now.

Prevent risk of stroke with palm oil vitamin E

While you may know about your brain’s gray matter, did you also know that about 50% of your brain is made of white matter? Your brain’s white matter health affects how well it learns and functions. This is also the area of the brain most often affected by stroke. 

Results of a 2-year human clinical study published in the American Heart Association journal Stroke, three months ago, revealed that vitamin E tocotrienols derived from Malaysian palm oil is good for brain health as it weakens the progression of white matter lesions. 

This is the first study that provides solid evidence of tocotrienols’ neuro-protective benefits in humans.

White matter lesions (WMLs) are abnormal regions in the brain that can be detected by MRIs. They are often found in elderly people, and are associated with atherosclerosis in the small blood vessels of the brain, hypertension and diabetes mellitus. 

If the condition worsens, WMLs may result in cognitive impairment and dementia. “Injury to the brain’s white matter has been reported to be the major cause of functional disability in cerebro-vascular disease,” confirmed researcher Prof. Yuen Kah Hay, PhD.

Previous animal studies have reported that vitamin E tocotrienols derived from palm oil are capable of preventing damage to white matter during a stroke, and improved circulation to the damaged part of the brain after a stroke.

“This study is a very significant,” commented Kalyana Sundram, PhD, a member of the research team. “Many compounds have been shown to display neuroprotective effects in animal models of stroke. But they failed in human clinical trials. This may be because the human brain has so much more white matter (about 50%) than rats (about 10%).”

In this randomised, double-blind, placebo-controlled trial, leading tocotrienol researchers at the Universiti Sains Malaysia, Penang, Malaysia, followed 121 volunteers for two years. Each volunteer underwent MRIs to confirm the presence of WMLs. 

One group received 200mg of mixed tocotrienols twice daily for two years, while the others received a placebo. All volunteers were instructed to maintain their regular diets and physical activity levels. MRIs were performed at entry into the study and then repeated after one year and again after two years.

There was no statistical difference after the first year. However, results after year two were exciting. At two years of supplementation, the mean WML volume of the placebo group increased whereas those who received palm tocotrienols remained unchanged. 

The principal researcher, Prof Yuen concluded that supplementation with palm tocotrienols slows down the progression of white matter lesions.

Brain white matter lesions are not only linked to increased stroke risk but they are also known to be linked to development of other brain diseases such as Alzheimer’s and Parkinson’s. “Regular supplementation with palm tocotrienols could prove beneficial in the overall maintenance of good health,” said Dr. Sundram.

This study shows that taking palm tocotrienols daily may be an easy way to be proactive about your brain health, especially if you are at high risk for stroke.

CPO prices may climb on biodiesel demand

NEARING BOTTOM: Weather-induced supply disruption can also play role, says expert

PETALING JAYA: PALM oil prices, which had been on a downtrend since mid-March, are likely nearing bottom as energy demand increasingly kicks in.

Yesterday, the third month benchmark for crude palm oil (CPO) futures on the Bursa Malaysia Derivatives Market traded RM15 lower to close at RM2,417 per tonne.

MPOC CEO Tan Sri Yusof Basiron (second from right) meeting with Meteorological Department head of climate centre Jailan Simon yesterday. With them are Ganling Sdn Bhd director Ling Ah Hong (right) and CIMB Futures Sdn Bhd broker representative Loh Kin Kien. NST photo by Halim Salleh
“Palm oil prices have been coming down for almost three months due to a build-up in supplies. However, the current level of around RM2,400 per tonne against Brent hovering around US$105 per barrel should become increasingly viable for palm biodiesel production. 

"The Indonesian and Malaysian governments are now able to meet biodiesel mandates with minimal subsidy,” said CIMB Futures Sdn Bhd broker representative Loh Kin Kien.

“Therefore, palm oil prices would be well supported in the region of RM2,300 per tonne but require a weather-induced supply disruption to significantly uplift prices,” he said after presenting his paper at the “Talk on El Nino — Effects and Implications 2014” organised by the Malaysian Palm Oil Council (MPOC), here, yesterday.

Also present were Meteorological Department head of climate centre Jailan Simon and Ganling Sdn Bhd director Ling Ah Hong. 

Jailan confirmed that the chances of El Nino materialising at the end of year are quite high. “The surrounding ocean is warming up. An El Nino is in the making.” When asked on the impact of this phenomenon, he replied it would most probably be weak to moderate.

“The full brunt of El Nino is mostly likely to be felt in the first quarter of 2015. We could see impact in Sabah, northern Sarawak and the east coast of the peninsula if the El Nino’s impact is moderate to strong,” he added.

A severe El Nino would lead to prolonged dry spells in Indonesia, Malaysia and Thailand, where 88 per cent of the world’s oil palm is grown. Dry and hot weather hinders growth of leaves and fruit of oil palm trees, thereby curbing yields. 

During the first four months of this year, local CPO production totalled 5.84 million tonnes, 4.4 per cent more than 5.59 million tonnes a year ago. 

Ling thinks that fresh fruit bunch yields would slide in the second half of the year and is forecasting Malaysia’s CPO  output for the year to only add up to 19.30 million tonnes, relatively flat from last year’s 19.22 million tonnes.

His prediction is well below that of  Malaysian Palm Oil Board’s forecast of 19.52 million tonnes. Ling sees CPO prices rising again to as high as RM2,900 per tonne provided Brent trades at current level of between US$95 to US$110 per barrel.

High growth potential in biogas industry

WASTE-TO-ENERGY PROJECTS: Bioeconomy set to hit RM150b target by 2020

KUALA LUMPUR: MALAYSIAN Biotechnology Corp (Biotech Corp) targets Malaysia’s biogas industry to achieve RM20 billion in gross domestic product by 2020 from the current nascent state of a handful of biogas plants in Peninsular Malaysia and Sabah supplying power to the national grid.

“We think Malaysia’s bioeconomy is able to achieve a target of RM150 billion by 2020 and the biogas sector should make up 15 per cent contribution at RM20 billion,” said Biotech Corp chief operating officer Razwin Sulairee Hasnan Termizi.

“We need to capitalise on our natural resources to value add on our bioeconomy initiatives. 

"Biotechnology works at the molecular genetic level in agriculture, healthcare, environment and industry,” he said after the opening of the 3rd Biogas Asia Pacific Forum, here, yesterday. 

Biotech Corp is the government agency under the Ministry of Science, Technology and Innovation tasked to promote commercialisation of biotechnology projects. It sees biotechnology as the main driver of a bioeconomy.

At its simplest, a bioeconomy describes a future in which people use renewable resources for biofuel and bio-plastics. Instead of an economy dependent on the planet’s depleting fossil fuels such as petroleum and coal, one can convert agricultural by-products and livestock waste into electricity, fuels, plastics or even protein-packed animal feed. 

Nurturing a bioeconomy by leveraging on our natural resources, such as oil palm biomass, will ultimately propel Malaysia’s socio-economic position to greater heights.

Throughout Malaysia, plantation companies have started the ball rolling by capturing greenhouse gas emanating from mill sludge and turning it into clean energy by investing in biogas plants. These anaerobic digester tanks containing friendly bacteria feed on the organic matter to produce flammable gas and fertiliser.

This flammable gas called bio-methane can be compressed into tanks and fed into gas-powered taxis, public buses and even cooking gas in the kitchen. Alternatively, bio-methane can be fired into engines that generate electricity for Tenaga National Bhd’s national grid.

The benefits of waste-to-energy projects by plantation companies are extensive. Since mill sludge is converted into biogas and fertiliser, there is no chance of it entering rivers and polluting them. While the organic fertiliser is ploughed back into the fields, greenhouse gas extracted from the biogas plants is fed into a combined steam and power plant at the mill to generate electricity for the surrounding community in this estate.

Biogas operators which can supply big amounts of electricity are encouraged to hook up to the national grid. Those which are successful applicants with Sustainable Energy Development Authority are paid a basic 32sen per KWh, as stated in the feed-in tariffs.

Malaysia is targeting 500 biogas plants by 2020. This initiative is expected to generate about RM2.9 billion in gross national income and create 2,000 jobs by 2020.

ISPO's deadline may not be practical

As at the beginning of 2014, the Indonesian Sustainable Palm Oil Commission noted only 40 oil palm plantation companies have secured the government-issued ISPO certification.

Plantation companies must obtain their ISPO certification by end of this year, following a 3-year application period from the beginning of 2012. 

The ISPO certification is an acknowledgement that the plantation group has complied with Indonesia's laws and regulations on sustainable agriculture development that balances the needs of People, Planet and Profits.

“As of January 2014, only 40 of the roughly 2,500 plantations had received certification and another 153 had applied for it,” said Indonesian Sustainable Palm Oil Commission executive director Rosediana Suharto.

“Plantations have to independently apply for the certification, or face the penalties, such as a plantation-class downgrade,” she reportedly said.

Legal issues, according to Rosediana, is among the reasons for lack of willingness among most plantations to apply for the ISPO certification. “A lot of plantations do not have all their permits, such as land-user certification, in place and therefore, are unwilling to apply,” she said.

When comparing ISPO with the voluntary Roundtable on Sustainable Palm Oil (RSPO) certification, Rosediana acknowledged that “some principles between the two programmes might be needed to work on”. 

Among them include land optimisation. While the ISPO wants plantation companies to fully optimise usage of their landbank on a balanced development approach, the RSPO unnecessarily pressures companies to leave big portions of their land idle, supposedly for conservation. She commented that unlike the government-sanctioned ISPO, the voluntary RSPO certification is said to promote environmental sustainability, when in reality it aims to curb economic growth.

Indonesian Palm Oil Producers Association (Gapki) chairman Fadhil Hasan urged the government to revise the ISPO certification deadline, given that the vast bulk of plantations were poised to miss it.

“If most of the plantations have not obtained the ISPO certification by the end of 2014, the government has to be realistic and postpone the deadline,” he said. He also questioned the capacity of the commission to accelerate the ISPO certification process due to a lack of reviewers. 

“We as producers are prepared to get certified but there should be preparedness as well among those handing out the certification,” he said, adding that ISPO’s intent is good but the procedural deadline “is too ambitious”. 

Indonesia is the world’s largest palm oil producer, churning out more than 26 million tonnes of crude palm oil in a year. In 2013, Trade Ministry data showed palm oil exports contributed US$19.35 billion to the Indonesian economy.

Heroes of the Palm Oil Milling Industry

I couldn't agree more with Jonathan Fun. Here is his tribute to the men and women working in palm oil mills. They are heroes in their own right – living in remote areas, toiling in harsh conditions – the work they do, helps feed the world.

Working in a palm oil mill is not easy.

To start with, a palm oil mill is usually located in remote areas – far from urban towns, family and friends, and often located within the plantations itself where amenities like shopping malls are scarce.

Secondly, due to the nature of the job, workers at the mill are regularly exposed to heat, dirt and fibre. Although palm oil milling is a blue collar job, these people are earning an honest living.

Thirdly, since steam is widely used all around the mill to heat up the palm fruits, the entire process is really hot and sweaty.

This tribute is dedicated to all the unsung heroes in the palm oil industry. The people who dedicate their lives, blood and sweat not only to their Company but also in fulfilling the most basic and honourable task of Feeding the World.

The next time you eat biscuits, a piece of chocolate, or when you spread margarine onto your bread, think about the sacrifices of these great men and women who are working so hard to keep our stomachs full.

While oil palm planting provide jobs and brings prosperity to the people, the industry is mindful that food production is being carried out on borrowed land... land that belongs to our grandchildren.

Hence, the cultivation of oil palms on a balanced approach of People, Planet and Profits has evolved to be a common practice among big and small planters in Malaysia and Indonesia.

NSTP and Nikkei to share content

New Straits Times Press (M) Bhd group managing editor Datuk Abdul Jalil Hamid (left) shaking hands with Nikkei executive officer and editor-at-large Yoshihiro Hirata in Tokyo yesterday.
TOKYO: The New Straits Times Press (M) Bhd (NSTP) and Japan's Nikkei Inc have agreed to embark on sharing of news content between them to reach out to a wider segment of readers outside their home markets.

Under the memorandum of understanding (MoU) signed here yesterday, NSTP and Nikkei will exchange articles and news headlines published in their respective print and online publications.

The MoU was signed by NSTP group managing editor Datuk Abdul Jalil Hamid and Nikkei Inc managing director and editor-in-chief Katsuyoshi Kondo.

Also present were Nikkei executive officer and editor-at-large Yoshihiro Hirata and other senior company officials.

Founded in 1876, Nikkei is the publisher of Japan's largest business and financial newspaper and online services. Its flagship daily newspaper, The Nikkei, has over three million subscribers.

Nikkei's multi-platform media distribution includes online, a business TV channel and magazines. The company's main focus now is to promote the Nikkei brand across Asia by expanding their operations around the region.


Every day we see people acting thoughtlessly, without care for others.

Reckless car drivers endangering lives of other road users. Financial speculators who drive down stock prices and ruin the lifesavings of other investors. Leaders who make secret deals to enrich their own pockets at the expense of other people's livelihoods. Corporate head honchos who bask in the comforts of their air-conditioned office while their staff fearlessly defend the company's honour in a neighbouring country but end up suffering in jail.

Yet we also have examples where people act nobly against their own self interest.

There are parents that risk their lives to save their kids. Lovers who donate a kidney to save their partner’s life. Employees who risk being harmed for the safety and confidentiality of their bosses.

History is filled with tales of people such as Mother Theresa, Gandhi and Martin Luther King who devote their lives to something they whole-heartedly believe in.

Here's a video of everyday people caught on camera risking their lives to save others.

In the palm oil industry, there are many greedy people who do not hesitate to hurt others for self gain. But then again, there are also quite a few honourable personalities who courageously make good on their promises and remain steadfastly loyal.

As a journalist, I have had my fair share of betrayals and disappointments. Despite these hurtful episodes, I would still like to think humanity will prevail over selfishness.

Malaysia's Small Farmers correct President Obama

The National Association of Smallholders of Malaysia (NASH), in response to wrong allegations made by the USA President Barack Obama, lay down the facts of the oil palm industry in Malaysia:

FACT: Malaysia is keeping the promise made at the Rio Earth Summit in 1992 to maintain at least 50% forest cover. According to the United Nations Food and Agricultural Organisation, 62% of Malaysia is forest cover.

FACT: Only 15% of Malaysia's landmass is planted with oil palms.

FACT: About 40% of Malaysia's oil palm industry is worked by over 300,000 small farmers.

Palm oil is a versatile food ingredient that is 100% free of trans fats. Apart from being the ideal cooking oil for deep-fry snacks, it is also formulated into bakery fats to make cakes, confectionery, sweets, cookies and cereals. 

Palm oil derivatives can also be found in household products such as soaps and detergents.

Today, more than 300,000 small farmers throughout Malaysia cultivate oil palms on agricultural-zoned land of between 4 and 40 hectares. 

Together with big plantation companies, they produce more than 18 million tonnes of palm oil every year. This goes to feeding more than 3 billion people across the world.

Oil palm cultivation is key to poverty reduction in Malaysia. Farming is essentially food production and contributes to improved living standards among rural communities.

Malaysia's small farmers are a robust and diverse group of individuals. They are an integral part of the country's cultural identity and their produce contribute significantly to the economy. 

Last year, Malaysia shipped out RM53 billion (or US$16.57 billion) worth of palm oil to 150 countries.

‘Sabah oil palm sector must remain resilient’

This is written by my colleague Zaidi Isham Ismail.

PROVEN OPTION: Policymakers’ support vital, says IJM Plantations chief

SABAH’S palm oil industry must maintain the same pioneering spirit that  is partly responsible in positioning the state into what it is now — Malaysia’s largest crude palm oil (CPO) producer.

IJM Plantations chief executive officer and managing director Joseph Tek Choon Yee said in order to move forward, Sabah will require the same pioneering spirit and dedication that started the industry many decades ago.

“It will need the same amount of perseverance and resilience amid the multitude of challenges and opportunities confronting the palm oil industry in a number of ways.

“Sabah’s economic well-being may swim or sink with oil palm as it is the only proven option to date of a sustainable tropical plantation crop,” Tek told Business Times in an interview.

As such, he said, continued support from the policymakers, along with the thorough know-how of the industry and other authorities, is pivotal in moving the industry forward.

Tek said if the successes of the past and present are to be used as a benchmark in moving forward, then all the key players, including government bodies, the private sector across the palm oil value chain and the smallholders, must be galvanised to work together.

“For Sabah to nurture a sustainable palm oil enterprise along the palm oil supply chain, its competitive edge must be sustained by balancing its economic sustainability and other socio-environmental aspects.”

Established in 1985, IJM is a medium-sized plantation company that has entered into a joint-venture agreement with Koperasi Pembangunan Desa to develop Desa Talisai.

Starting with 4,000ha of Desa Talisai estates, the area under oil palm cultivation has risen sevenfolds to about 30,000ha presently, all in the Sandakan and Sugut region in Sabah. The group has also expanded its oil palm cultivation activities into Indonesia.

Question: How has the Sabah palm oil industry evolved?
Answer: I did a presentation at ISP National Seminar in Kota Kinabalu in 2010 and my research revealed the following early agri-transformation in Sabah. Before oil palms, agriculture in Sabah was very much into collecting rattans from jungles, padi planting, tobacco planting, harvesting Manila hemp and venture into cocoa plantation later. 

My research revealed that first trial planting of oil palm in Sabah was in 1957 using seeds collected from the jungle in Mostyn estate, Tawau. This was later expanded to the first 200 acres of commercial oil palm planting in 1959. Sabah’s upstream oil palm planting reached its first 100,000ha by 1981. Within the next two decades, it reached its milestone of one million hectares. 

The latest 2013 figures from the Malaysian Palm Oil Board showed Sabah has 1.48 million hectares planted with oil palms, equivalent to 28 per cent of the total area planted with oil palm in Malaysia. It is the largest palm oil-producing state in Malaysia. Last year, Sabah’s midstream and downstream activities comprised 124 palm oil mills, 13 palm kernel crushing plants and 12 refineries.

Question: How significant is the crop’s contribution to the state?
Answer: The crop has provided a sustained flow of income to entrepreneurs and has benefited the state in many ways. An important source of revenue for the state is derived from the sales tax amounting to 7.5 per cent for crude palm oil (CPO) gross prices above the threshold CPO pricing of more than RM1,000 per tonne. In 2013, Sabah produced 5.78 million tonnes of CPO, or 30 per cent of Malaysian production of 19.22 million tonnes. 

Using the national annual average CPO price of  RM2,371 per tonne in 2013 as reference, the estimated sales tax worked out to be RM1.027 billion. Sabah is expected to continue collecting revenues from the State Sales Tax (SST) even after the goods and services tax (GST) is implemented in 2015 as SST is a resource under the jurisdiction of the Sabah and Sarawak governments, as stipulated under the Federal Constitution.

Question: How has the rakyat benefited?
Answer: In Sabah, jobs were created for the rakyat across the palm oil supply chain. These include areas covering research, nurseries, estates, mills and other downstream activities; and many other aspects of service-provision jobs, such as administration, purchasing, human resource, information technology, training, sales and marketing, logistics and others. 

The oil palm business along the supply chain has also created numerous multiplying effects and spinoff businesses, which have also benefited the rakyat. In short, the rakyat has been incorporated as relevant stakeholders — both directly and indirectly — in the palm oil supply chain in Sabah.

Question: What more can be done?
Answer: One must appreciate that palm oil is a commodity and as such is “a price taker and not a price maker”. The venture is also a long-haul one and will be subjected to the vagaries of extreme weather, low start-up yields and other biological interactions. The business game for sustainability is to derive a comfortable margin between the derived commodity price and the escalating cost of production. 

Over the years, various parties have called for a restructuring of the SST on CPO via a revision of the threshold price upward from the present RM1,000 per tonne to RM2,000 per tonne in the light of rising production cost and other statutory charges being levied on the growers, such as windfall levy, charges and cesses. A two-tier sales tax system has also been advocated, similar to the practice adopted in Sarawak based on equity taxation, which is deemed more accommodative vis-a-vis the fluctuating CPO commodity prices.

Question: What are IJM’s contributions towards Sabah’s palm oil industry?
Answer: We are but a smaller and younger player amid the many giants like Felda, IOI, Sime Darby, Wilmar, Kuala Lumpur Kepong and Sawit Kinabalu in Sabah. Since our humble plantation saga back in 1985, our contribution to the palm oil industry in Sabah is set against our strong fundamentals already in place, where the group continues to augment the business activities based on its core competency — namely in oil palm cultivation, research and advisory and midstream milling processes. Today, we are proud to be among the best in the Malaysian plantation fraternity in terms of productivity and good agricultural practices.

Costlier oleochemical exports

KUALA LUMPUR: Oleochemical exports will be more costlier following the natural gas’ price hike effective yesterday, said Malaysian Oleochemical Manufacturers’ Group (MOMG) chairman Tan Kean Hua. 

Effective May 1 2014, those using natural gas of more than two million standard cu ft per day (mmscfd) pay RM19.65 per million metric British thermal unit (mmBtu). This is about 20 per cent more than RM16.45 mmBtu previously.

“There has been and will be inflationary pressure on oleochemical exports. Just like feedstock price increases in the last six months, we had no choice but to pass on the cost increases to clients,” he said in a telephone interview yesterday. 

The main feedstocks for oleochemical manufacturers are crude palm oil and crude palm kernel oil, whose prices have risen by about 15 per cent since November 2013. These feedstocks on average make up between 80 and 90 per cent of oleochemical pricing. 

The oleochemical industry consumes quite a fair bit of natural gas compared with other manufacturers as they use it for fuel and as a component for their products. Tan estimates that this year, MOMG members’ annual gas bill would rise by about RM350 million. Their natural gas and electricity bills represent more than 50 per cent of their total production cost.

 Asked if the natural gas price hike would have a negative impact on MOMG members’ earnings, Tan replied, “we’re a cost-plus business and oleochemicals are a necessity. It is present in household cleaning products, toiletries, cosmetics, industrial and pharmaceutical items we use everyday”, he said. 

“Our members have over the years made concerted efforts in using energy-efficient equipments. Some are considering putting up co-generation units in the near term. We’re in the business of making renewable chemicals. It’s only logical for us to incorporate energy-saving methods and more affordable components in walking the talk of sustainable development,” he added.

MOMG members churn out 25 per cent of the world’s 10.8 million tonnes of oleochemical demand. There are 18 local oleochemical firms with a combined annual capacity of 2.7 million tonnes.

In the first three months of this year, the Malaysian Palm Oil Board data showed the country exported RM2.78 billion worth of oleochemicals, 25 per cent more than a year ago.