SCMP: The India-Malaysia Palm Tiff and the Return to Agriculture

It’s been a bit of a busy month for Khor Reports. One of the several things lined up include contributing comments to the South China Morning Post (SCMP) on a couple of issues that cropped up recently.

The first concerned the trade tensions between Malaysia and India, which significantly impacted palm oil trade between the two countries:

“Last year, Indians and Malaysians waged rival boycott campaigns on social media and although it is unclear how much traction these movements garnered, Khor, the economist, said it was unusual to see such discussions about the palm oil online “as it doesn't involve end consumers”. “But having tens of thousands of mentions of Malaysian palm oil online is a clear sign of issues, meaning that after that episode the level of mentions was 80 per cent higher than previously which gives us some insight into domestic angst,” Khor said.

The second was about policy suggestions for Malaysia to return to agriculture, following a RM50 billion (USD12.3 billion) food import bill in 2019.

“The good agricultural practices of Malaysian farmers should be well established, and be held in high regard, to establish a loyal domestic market,” Khor said. “Pro-farmer and food-security efforts may be needed. Imports can flood the market in an unpredictable way and that has to be considered.”

Click on the links above to read the full SCMP articles.

BFM: India Asks Refiners to Stop Buying Malaysian Palm Oil

download.png

Earlier this month, BFM invited Segi Enam Advisors principal, Khor Yu Leng, to give her views regarding India’s more recent trade move on Malaysian palm oil. Click here to listen to the podcast.

“The latest move comes after Malaysia's criticism of India's actions in the Kashmir region and its new citizenship law. We look at how this affects Malaysian palm oil producers, and what it means for our trade relationship with India.

Produced by: Loo Juosie Presented by: Lee Chwi Lynn, Aiman Rashad.”

Sugar, Sugar: A Quick Revisit

Some good news on the healthy living front: a recent study from Oxford University has found that between 2015 and 2018, the total amount of sugar sold from soft drinks per capita per day in the United Kingdom has declined by 30%, with the average sugar content of soft drinks dropping from 4.4g of sugar per 100 ml in 2015 to 2.9g/100ml in 2018. Following the introduction of the Soft Drinks Industry Levy (SDIL) in April 2018, which affects soft drinks with a sugar content of 5g or more per 100ml, sales volume of soft drinks subjected by the tax has halved while that of low- and zero-sugar drinks collectively jumped by 40%.

While the research cautioned against using its results as an assessment of the SDIL, it did give it credit for helping accelerate the shift in soft drink sugar content, especially since it observed no changes to the sugar content of soft drinks excluded from SDIL; anything beyond that is attributed to changes in consumer preference and purchasing behaviour.

Observers note the SDIL or “sugar tax” impact was 73% of total sugar reduction was due to reformulation and new lower-sugar drinks and 27% was due to changes in consumer behaviour!

Reading this article (find it here) takes us back to our piece on bubble tea, where we found that drinking a 500ml drink of bubble tea at 100% sugar level was pretty much the same as drinking three cans of Coca Cola. With the average Malaysian apparently consuming a whopping 3kg of sugar from sugary drinks annually, fingers crossed that the introduction of our own sugar tax in July 2019 will bring Malaysia a sweet victory too (pun intended).

Much Ado About Something: The India-Malaysia Palm Kerfuffle

Khor Reports is back after a two-week break (happy belated new year everyone!). As a mental warm up for things to come, we dove into the issue which dominated the local palm oil scene in the last few months of 2019—the trade spat between India and one of its largest palm oil exporter, Malaysia.

Here’s our post on the sticky situation, broken down into eight points—all about the palm oil trade between Malaysia and India, including online-social media reading in India. Click here to read the full post!

Smoke Gets in My Eyes: The Case of Air Pollution in Cinta Sayang

Something is going on in Cinta Sayang. Apparently, the Air Pollutant Index (API) on the PM2.5 scale registered a 395 reading on the morning of 28 June 2019 on a local resident’s handheld air quality monitoring device; in contrast, official data shows a 67 reading in Sungai Petani. Our curiosity piqued, we’ve come up with a preliminary review on the matter.

Click here to read the full post on the smoky matter.

Knives Out? A Nibble on Food and Diet Habits

We became curious about the seemingly rising trend of diets and food consumption, in light of the growing public concern about personal health and more. With the help of 100 Khor Reports network and friends, we managed to tease out a picture on the current dietary habits and snooped around a little for views from young professionals.

Click here to read our findings!

End-2019 Catch Ups

Year end is quite the time to catch up! Over the last 10 days or so... #KhorReports mini open house, a #palmweekly meet up, book Year end is quite the time to catch up! Over the last 10 days or so... #KhorReports mini open house today, a #palmweekly meet up, book launch of Prof Hong Hai's "The Rule of Culture, Corporate and State #Governance in China and East Asia", social listening data with Danni, interview spot with Melissa at Channel News Asia, and a soap making intro session by Angeline (trimming soap bars this afternoon, and calculating the mixture with #palmoil, #oliveoil, #coconutoil, #castoroil a few days ago). of Prof Hong Hai's "The Rule of Culture, Corporate and State #Governance in China and East Asia", social listening data with Danni, interview spot with Melissa at Channel News Asia, and a soap making intro session by Angeline (trimming soap bars, and calculating the mixture with #palmoil, #oliveoil, #coconutoil, #castoroil a few days ago).

Recent meet ups

Recent meet ups

Mini Open House in KL, 11 Dec 2019!

Our 1st Khor Reports open session is in Kuala Lumpur. Next week, Wed 11th Dec at 2-5pm for up to 6 pax (please email yuleng@segi-enam.com to sign up; and if this is full, you'll be alerted to future dates).

This is an intro to our economics and policy research, largely on trade and environmental topics. Priority for grad students and young professionals.

Feature topics - Haze crisis of southern ASEAN, Malaysia durian and China trade hopes, waste plastics & incineration - a billion dollar business, land reclamation & flood risks, and the boba (& sugar) boom.

Malaysia Palm Oil: Planted Area Growth and Limiting It

We are hearing from the market that some feel that the proposed Malaysia "limit" to oil palm area is a signal for expansion! The area limit (first mooted at a lower level, then raised) has been suggested as a measure to improve the image of Malaysian palm oil against foreign accusations of deforestation. At the same time, it may ease palm's supply glut (resulting from rapid expansion when palm prices were buoyed in the biofuels boom). 

Some figures may explain this alleged “pro expansion” mood. 6.5 million hectares is significantly higher than the current licensed area; and the implied pace of expansion would be 130,000 hectares per year for a push to the limit by 2023 (the “target” year mooted by the government, see red line in chart). This is a significantly faster pace than recent growth in hectarage (blue line) of 69,000 hectares per year in the recent 3 years.

But if there is an upward revision of planted area, of say 5%, the pace of expansion to reach the limit could be 80,000 hectares per year (yellow line; not so far off the recent 3-year average change).

FireShot Capture 093 - Posting on Malaysia oil palm area and planned limit - Google Docs_ - docs.google.com.png

How would the area expansion be distributed? Or perhaps 2023 is not a “target” year and upstream industry players are quite mistaken in interpreting it this way.

Read more at Palm Weekly!