US Grains Council: Virtual Aqua Talk—Turbulent Markets

On Wednesday, the US Grains Council conducted a webinar featuring the world of aquaculture and the challenges the industry faces. There were several pertinent points made throughout the webinar, interesting especially to those only beginning to explore the industry:

• Over 35% of seafood from aquaculture is traded internationally. Freshwater fish comprise the bulk of aquaculture produce, with China taking the lead in overall production. Some countries specialise more in other seafoods, e.g. shrimps for Ecuador and Thailand, the Atlantic salmon for Norway and Chile.

• Seafood demand is expected to continually grow in the coming decades. Interestingly, panelists note that the pandemic has exacerbated this demand, e.g. in America, households are still continuing to buy fresh seafood to bring home even as its population have begun dining out. There are also new challenges faced by the industry, notably the introduction of plant-based seafood and increasing concern on sustainability issues among consumers.

Seaspiracy has been referenced during the webinar as one of the likely reasons of the current rise in consumer concern regarding aquaculture sustainability.

• Dried Distiller's Grains and Solubles (DDGS), which is used as fish feed, was given quite a bit of attention during the webinar. The US produces 4.4 million metric tonnes of DDGS per annum, most of which are distributed locally; only about 4% are exported, with 3.5 million metric tonnes making its way to Southeast Asia.

• In Asia, there needs to be a focus on one type of fish—like salmon in Europe—where information on relevant factors, like genetics and nutrition, can be better gathered. One expert recommends the target fish to be the Asian sea bass and grouper.

MPIC Responds to Food Watchdog's Carcinogen Findings in Biscuits

The Malaysian Ministry of Primary Industries and Commodities (MPIC) responded to the Hong Kong Consumer Council’s (HKCC) announcement that cancer-causing substances were present in all 60 biscuit products sampled. According to the ministry, the monitoring of contaminants in finished food products are beyond the scope of both MPIC and the Malaysian Palm Oil Board (MPOB); the authority lies with the Ministry of Health (MOH).

Interestingly, Director-General of Health Noor Hisham Abdullah previously released a statement in response to HKCC’s findings, asserting that health risks from cancer-causing substances in Malaysian-made biscuits are low, with the average level of acrylamide found in locally biscuit products falling well below the amount recommended by the European Union Commission Regulation, but did not quantify the same for glycidols.

According to the HKCC, cancer-causing substances were detected in all 60 samples sampled, including Hup Seng Special Cream Crackers, Oreo Mini Oreo Original, and Jacob’s Original Cream Crackers.

On the matter of the food watchdog’s findings itself, MPIC made clear its dissatisfaction. It claims that “it is very unfair for the Hong Kong Consumer Council to pinpoint palm oil as the main cause of high acrylamide content in finished products [even though] other oils may also give similar products.” The Ministry referred to various studies, including those that found that the substance is present in high-temperature manufacturing processes regardless of the oil used.

Some palm oil industry insiders wondered at “passing the buck to MOH,” pondering if MPOB should proactively identify any problematic supplies of shortening and bakery/confectionery fats to the local biscuit manufacturers sampled by HKCC as well as conduct more random product testing at retail stores. At the same time, there are those who remain sceptical of an unproven health risk while others are concerned about conspiracies seeking to tarnish the reputation of palm oil.

Nevertheless, public concern has spread. Singapore’s food agency has come out to say that biscuits are safe to consume in moderation and that it is “impossible” to prevent occurrence of certain compounds.

End of Moratorium Raises Environmental Concerns in Indonesia

Indonesia’s three-year moratorium on new palm plantations ended in 19 September 2021 and so far, the government has yet to indicate whether the freeze will be extended. Without clear regulations, environmentalists are understandably worried about the possible spikes in deforestation rates. There are also concerns that the issues identified during the implementation of the moratorium, such as the 3.4 million hectares of illegal plantations, have not been fully addressed.

Experts and activists are thus calling for a renewal of the moratorium, citing that verbal assurances from the officials that no new permit applications will be entertained are not sufficient.

A photo of a palm oil plantation in the Jambi province. Credit: Antara Foto/Wahdi Septiawan/via REUTERS/CNA

Instead of the moratorium, it would seem that the government will now rely on the infamous Omnibus Law to address the problem of oil palm concessions within forest areas. In an interview with Reuters, President Joko Widodo stated that he has “ordered for this to be inserted in the law so that we don't have to renew it every time it expires... So when (the country's) leadership changes, there is no change in policy.” While it does not prohibit new plantation permits, the 2020 regulations did stipulate that new palm oil concessions are capped at 100,000 hectares, although there is notably no limit to the number of plantations allowed annually.

Top Global Agricultural Commodity Companies Announce Net-Zero Emissions Plans

Ten of the world’s largest agricultural commodity companies have released a joint statement pledging to accelerate efforts towards net-zero emissions globally by 2050. This group of companies reportedly makes a combined revenue of USD 500 million in key commodities such as palm oil and soy, and comprises ADM, Amaggi, Bunge, Cargill, Golden Agri-Resources (GAR), JBS, Louis Dreyfus Company (LDC), Olam International, Wilmar International, and Viterra. To that end, a roadmap will be presented at COP27 next year in line with current climate plans to limit global warming to 1.5°C.

This announcement is timely. According to the IPCC report on climate change published in August, an estimated 23% of global greenhouse gases (GHG) emissions is associated with land use, 11% of which are from deforestation and forest land conversions. With current temperature trends indicating that it is entirely possible for human-driven global warming to reach 1.5°C by 2040, managing climate change is an urgent, all-hands-on-deck situation, making this net-zero emissions pledge a much welcome coarse of action.

For palm oil, we can expect more methane capture at mills as a key route to the transition. At the moment, several companies have already begun taking steps to manage emissions generated throughout their supply chain. Wilmar, for example, has methane capture facilities installed at its Indonesian and Malaysian mills to reduce GHG emissions generated from palm oil mill effluents (POME). According to its website, a single methane capture facility is capable of reducing a mill’s emission by 90%; as of 2020, Wilmar reported that it has successfully avoided nearly 600,000 tCO2e of GHG emissions using 25 of these facilities.

Greenpeace and TheTreeMap: Nearly 15% of Palm Plantation Located Within Forest Estates

A recent report published by Greenpeace and TheTreeMap made a damning conclusion: about 3.1 million out of the 16.4 million hectares of oil palm plantations in Indonesia fall within forest estates, including national parks, wildlife sanctuaries, and UNESCO sites. The report further details that of that 3.1 million hectares, approximately 1.6 million are industrial plantations, claiming that this illustrates a “catastrophic failure of law enforcement to protect the forest estate.”

The report brings us back to our own geospatial analysis of Riau and Central Kalimantan while working with SIIA on the Haze Outlook 2021, although our interest lies more in the Indonesian government’s ambitious project to set up food estate programmes across the archipelago. While the exact locations of these programmes are still relatively unknown, the maps below show that much of the land of the districts earmarked for food estate projects consist of either peatland or areas protected areas recognised by the International Union for Conservation of Nature (IUCN) and/or under moratoriums prohibiting the conversion of forest land into commercial plantations.

As experts and environmental groups continuing to play the role of the watchdog to the government, it would be interested to see how the focus would shift to food estate programmes. With organisations like Tempo and The Gecko Project revealing damnatory information, including attempts allegedly made by Defence Minister and head of the food estate project Prabowo Subianto to steer the project to a politically connected company, it wouldn’t be surprising to see more reports like the one published by Greenpeace and TheTreeMap—albeit more focused on food estate programmes—making headways into the news.

Cancer-Causing Substances Detected in 60 Biscuits

On Monday, the Hong Kong Consumer Council announced that it has detected alleged cancer-causing substances in all 60 biscuit products sampled. The consumer watchdog revealed that at least one of the main chemical culprits—glycidol and acrylamide—are present in each products tested including Hup Seng Special Cream Crackers, Ritz Crackers Cheese Flavoured Sandwich, and Oreo Mini Oreo Original. 3-MCPD was also detected in 56 products tested. The problems are associated with food manufacturing processes involving high temperatures.

Source: SCMP (Oct 2021)

51 products sampled were also found to have high fat, sugar, and/or sodium contents. 24 products also have misleading nutrition labels

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Our comment

The news has predictably ignited food safety worries from Hong Kong on snacks with levels of acrylamide (to do with potato and other starch, mitigate by washing ingredient) and glycidol (to do with palm oil, mitigate by washing and/or chemical processing), with a problem of sugar and salt similarly mentioned. The findings has also triggered a reaction from health authorities in Malaysia (and probably elsewhere soon) to do testing too.

How many biscuits to be at risk? For a 60kg person, the industry says 18kg biscuits, presumably on a typical amount of the contentious compounds. However, on the worst findings, the media is pointing to a max of three and eight pieces a day for a child and adult respectively. This should also provide a push for high food grade ingredients.

PalmTrack: A Month's Reflection

It’s been a busy month for PalmTrack—from observations about vessel movements to weather outlooks, PalmTrack continues to offer exclusive updates surrounding the palm products trade. Some more recent topics we’ve written about include an alert for a La Niña phenomenon in the coming months; major palm oil players who have been using containers are switching to bulk shipments; the conclusion of a near three-week observation of the ports in the Dumai area.

ASMC (Oct 6, 2021): “September to November (SON) season rainfall anomaly composites (mm/day) for El Niño (left) and La Niña (right) years. Brown (green) shades show regions of drier (wetter) conditions. Note that this anomaly composite was generated using a limited number of El Niño and La Niña occurrences between 1979 and 2017 and therefore should be interpreted with caution (data: NOAA CPC CAMS_OPI).”

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RSPO: Malaysia National Interpretation 2019 and ILO Indicators on Labour

Yesterday, the Roundtable on Sustainable Palm Oil (RSPO) held a short webinar to refresh its Malaysian members on labour rights defined under its Principles and Criteria 2018 (P&C 2018).

One of the important points RSPO reminded its members about was the scope of Criterion 2.1 under the P&C 2018, which compels its members to observe “all applicable local, national, and ratified international laws and regulations.” The Criterion states that all members are to comply with “laws made pursuant to a country’s obligations under international laws or conventions,” such as the ILO Core Conventions and the United Nations (UN) Guiding Principles on Business and Human Rights. It also reminded members that “where countries have provisions to respect customary law, these will be taken into account.”

In the context of labour rights in Malaysia, standards like the ILO’s Forced Labour Convention would be highly relevant.

During the Q&A, RSPO clarified that its certification process will be only audited against RSPO standards.

MOSTA: Prospects of IR 4.0 and Enabling Technologies for Oil Palm Industry

Last Tuesday, the Malaysian Oil Scientists’ & Technologists’ Association (MOSTA) held its annual conference where experts and companies share their scientific progress in the oils and fats field. This year, the one-day event focused on oil palm plantations and was split into three IR 4.0-related themes:

1. Precision agriculture: This system was touted as a way for more efficient agricultural practices, allowing for better science-based decision making, e.g. assessing land suitability. At least one panelist mentioned climate change as a reason for data-driven precision agriculture practices.

2. Farming technologies: There is a notable highlight on drones. Sime Darby claimed that its multi-drone operations will be perfected in the next three years for better parallel spraying and opined that smaller plantations may soon have access to drones-as-a-service as the usage increases throughout the industry.

3. Milling technologies: Panelists were emphasising on the importance of digitising milling practices. Some of the opportunities for growth in this regard include incorporating big cloud computing in the Continuous Emission Monitoring Systems (CAMS) and adopting real-time mobile platforms for mill supervision and inspections.

Source: Chen Zi Yan/Applied Agricultural Resources (AAR; 2021). Mr Chen Zi Yan of AAR presented his team’s assessment of the potential economic costs involved in three different insecticide spraying processes at an 180 ha oil palm plantation.

An interesting observation during the concluding panel discussion: in stark contrast to the overall placid progress-updating event, several panelists voiced frustration over the fact that many of these advancements are apparently contained within corporations; researchers are still struggling to obtain adequate cooperation from the private sector to come up with new tech that would benefit the industry as a whole. Additionally, it was pointed out that there is a shortage of required experts, such as drone pilots and robotics engineers, which will become an increasingly significant concern as more and more plantations adopt newer technologies.

ChinaDaily: Jabs Key to Malaysia's Tourism Revival

Last week, ChinaDaily published an interesting piece by Prime Sarmiento on how vaccinations are the key to reviving Malaysia’s struggling tourism industry. The article follows news that the government is mulling plans for a travel bubble to Langkawi, a quintessential tourism region, for fully vaccinated individuals (note: the bubble comes into effect on 16 Sep 2021). Several experts have voiced cautious optimism for this move since, as explained by People’s Health Forum’s Dr Micahel Jeyakumar Devaraj, it is now no longer possible to maintain a zero-case policy in the country.

Photo: The Langkawi Sky Bridge by Manish Tulaskar/Unsplashed. Known as the Jewel of the Kedah state, Langkawi is one of Malaysia’s wildly popular tourist destinations. In 2019, the archipelago recorded 3.92 million tourist arrivals, raking in an estimated revenue of RM1.7 billion (USD410 million) to nearly 5,000 businesses operating on the island. Approximately 70% of Langkawi’s residents are reported to rely on the tourism sector for income.

Deakin University’s Dr Catherine Bennet emphasised the need for vaccinations, explaining that restricting travel to only fully-vaccinated individuals would lower the risk of serious illnesses even in a case of infections. This would mean continuously pushing for more and more people to get the jab—Segi Enam Advisor’s Khor Yu Leng has pointed out that this may not be a significant issue for Malaysia considering that vaccine hesitancy is relatively low in the country.