Segi Enam’s Research Principal, Khor Yu Leng, was recently interviewed by Channel News Asia (CNA) on her thoughts on Malaysia's economy due to the political situation as a result of Malaysia’s 15th General Election, which resulted in a hung parliament, the first in Malaysia’s history.
She shares her thoughts on the current status of the Budget 2023 and what are the policy changes Malaysia can expect to see.
Read the article here.
Segi Enam’s Research Principal, Khor Yu Leng, was recently interviewed by China Daily regarding Malaysia’s 15th General Election results, titled “Tight Election Leaves Malaysia in Limbo”. Below is an excerpt from the interview:
The hung parliament is the result of feuding among political elites and a highly polarized electorate, said Khor Yu Leng, director of Segi Enam Advisors, a consultancy in Singapore. Election Day produced "surprise upsets as big names were easily toppled by the green Islamic wave", she said.
She was alluding to PAS, which has adopted green as its party color, and how linking up with PN has "harnessed youth support" and won among swing voters.
Here is a wrap up of the some of the issues PalmTrack covered in Sep 2022:
Malaysia plantation labour issues seem to be escalating. There is now worrying talk about destination market checks and signs that at-risk suppliers are facing buyer jitters. Indonesia suppliers may gain. This is amidst heightened problems for authorities to deal smoothly with migrant labour recruitment compliant with Indonesia, Bangladesh, and other requirements.
Going by Malaysia’s palm oil production in the last 15 years, it is clear that yield-productivity management is in a major rut, a warning to producers in other countries. The more recent ups-and downs seem to be driven more by the climate cycle of El Niño dry/La Niña wet than anything else, at least at the aggregate level. Read more on PalmTrack.
HCPO or high FFA CPO is the big new trend at palm oil mills. The processing of loose and rejected fruits gives a product with 35-40% FFA that suits HVO and more. But Malaysia’s unfavourable pricing for loose fruit is likely to hinder its supply. Indonesia prices a premium for loose fruits and buyers should see better prospects here. We talked to specialists to find out more.
BOM officially declared a La Niña on 13 Sep 2022. However, the meteorological agency has stated that projections indicate this third dip to be short-lived and is expecting the phenomenon to peter out by early 2023.
The EU Parliament has adopted the proposal on deforestation-free products. The regulation aims to eliminate deforestation in the import supply chain for the EU for several key commodities and products, including palm oil and soy.
Khor Reports’ PalmTrack is an independent research service that tracks palm tanker movements and reports trade of palm products (and shipments, upon request) for selected trade routes. It features a forward-looking market topic and sharp analysis every quarter, e.g. palm biofuels issues & opportunities for Jan–Mar 2022. Subscribe now!
Back in November 2019, Khor Reports studied the bubble tea (Boba) trend in Malaysia and the sugar level in the beverages. Click here to read it.
Momentum Works and qlub recently published a report, “Bubble Tea in Southeast Asia”. It is estimated that the 2021 market size for Boba in South East Asia alone is US$3.66 billion. Clearly, this Boba trend is not dying out anytime soon. With newer brands launching, this is still an ever-growing market.
Khor Reports previously tracked the sugar level of beverages in Malaysia and found out that one serving of bubble tea is double the amount of the daily recommended sugar intake. In 2019, 1 out of 5 adults in Malaysia has diabetes and about 3.9 million people are above the age of 18. This is a worrying trend. The prevalence of diabetes is also an upward movement from 2011 to 2019. So, what measures can be taken to tackle this issue?
Source: Malaysia Ministry of Health
Looking at Singapore, the Health Minister recently announced that Food & Beverages (F&B) outlets preparing freshly brewed beverages are to include a nutritional label on their menu to indicate the sugar level of the beverages and certain beverages are not prohibited from being advertised. Beverages falling under Grade C or D, such as Boba, will be affected by the advertising prohibition as most of their beverages have high sugar content.
Source: Singapore Health Promotion Board
As consumers become more health conscious, they may soon start opting for beverages with Grade A or B. Shops will need to revamp their menu or change the amount of sugar used in their beverages in order to attract those consumers. To reverse the trend of diabetes incidences, Malaysia should adopt this policy to encourage its citizens to choose healthier beverages option.
Wong Ivan, Guest Writer | 4 Oct 2022
Singapore Formula 1 Grand Prix is kicking climate action into higher gear. The event will last three days leading up to the 61-lap race on the evening of 2 Oct 2022.
According to a media statement by Singaporean-based biofuels company Alpha Biofuels, “when the night race returns to the streets of Marina Bay in September—after a two-year hiatus due to the pandemic—a full sustainability audit will also be conducted, which could see data such as the amount of carbon emissions and waste generated by the event being measured and reported for the first time.”
Responding to CNA’s queries, a spokesperson from Singapore GP said that the existing track lighting will be replaced with more energy-efficient LED lights from 2023, and that it will switch to electric or hybrid support vehicles where applicable.
The official Singapore Grand Prix website confirms that management consultancy Faithful + Gould has been appointed to write a Carbon Footprinting Report identifying emission sources of concern. The results will be then audited by Tüv Süd PSB.
On that note, take a look at F1’s 2026 target for 100% sustainable fuel and how ARAMCO creates F1’s sustainable fuel. Also significant is Singapore’s import of renewable (hydro-powered) energy from Laos, its challenges, and questions on large-scale dams.
See below for the sustainability commitments listed on the Singapore Grand Prix website:
Source: Singapore Grand Prix (accessed 26 Sep 2022)
research@segi-enam.com | 30 Sep 2022
In December 2021, heavy rainfall had resulted in severe flooding in numerous areas within Peninsular Malaysia. Regarded as one of the worst flood disasters the country has seen in the recent years, the flood effectively displaced an estimated tens of thousands of residents and was further proof that Malaysia is not—and will not be—spared from the growing effects of climate change.
Malaysia has yet to forget the devastation the floods had caused—topic of climate change is becoming an increasingly important and popular one, particularly online. Accordingly, activists and environmentalists have taken the opportunity to highlight the gravity of the situation, oftentimes working hand-in-hand with the media as a platform where the public can be kept abreast about the matter.
Kini News Lab is one such platform and its most recent article is “When the Water Rises: A Malaysian Climate Change Story,” which described how climate change has adversely impacted the livelihoods, standards of living, and psychology of Malaysians across the country. The article also allows readers to see annual temperature and rainfall changes in various locations since 1952.
This is me checking how the temperature has changed in Subang Jaya over the years. (Spoiler: It's been getting hotter and hotter 😕)
— Aidila Razak (@aidilarazak) August 29, 2022
Many thanks to @metmalaysia for providing us the data for free 🙏🙏 pic.twitter.com/jzKND3ASKB
A part of the article also covered rising sea water levels, yet another threat Malaysia is facing as a direct result of climate change. In the worst case scenario for Malaysia, sea levels could very well rise up to 0.74 metres by the 2100 year, plunging low lying and coastal areas underwater.
Source: Kini News Lab (2022)
Khor Reports did a short review several years ago comparing between the best and worst case scenarios for key areas where the land is at risk of coastal flooding by 2050: Land Reclamation Projects and Sand Dredging/Mining Sites in Peninsular Malaysia ver. Oct 2019.
We also wrote a piece on the politics of floods, with criticism about land development coming from businessmen and bureaucrats interviewed: Malaysia - the Political Economy of Land Development (or the Politics of Flood). While attention on coastal and flash floods is gaining attention, we would also like to highlight the issue of ground water flooding that can worsen flood woes (see box below).
Here is a wrap up of the some of the issues PalmTrack covered in Aug 2022:
The rise and fall of key agri-food commodity prices feels like a blast from the past, but many prices remain at multi-year elevated levels, notably fertilizers and also the likes of palm oil. In this two-part series, we look at recent news views from The Economist, FAO, and what some say about the 2008/09 price bubble and food speculation in Part 1 before moving on to what commodity traders say about the role of "non-commercial traders” in the recent early 2022 food price bubble in Part 2.
PalmTrack has been updating on recent and upcoming palm oil sustainability issues. There are three parts to this series, and each highlight the following points of interest gathered from close observers: greenwashing, legality, product pricing for smallholders (fair trade), traceability to farms, carbon emissions, and political-policy challenges.
In our posting ‘Sarawak CPO production to overtake Sabah’, we covered the forecast for Sarawak to be the biggest CPO producing state in Malaysia, the timber-to-palm transition of its big state suppliers, and the decline of its timber business segment, especially downstream amidst log supply woes. Now, we look at market access and dip into some issues for Sarawak timber and palm supplies.
Our latest discussion with labour experts revealed a wider regional competition for agricultural workers rising and expanding. We expect the Covid recovery to drive change toward a more formal and compliant agricultural labour supply. We case study Australia, who are reportedly now focusing on Indonesia and Oceania, and Taiwan who has opened up for agricultural labour workers from Southeast Asia in 2020.
BOM raised a La Niña alert on 16 Aug, the final step before an official La Niña. In the meantime, BMKG on 12 Aug revealed that while the dry season in Indonesia is expected to last from August to October, La Niña may still result in heavier-than-usual rainfall within the country.
Khor Reports’ PalmTrack is an independent research service that tracks palm tanker movements and reports trade of palm products (and shipments, upon request) for selected trade routes. It features a forward-looking market topic and sharp analysis every quarter, e.g. palm biofuels issues & opportunities for Jan–Mar 2022. Subscribe now!
Here is a wrap up of the some of the issues PalmTrack covered in Jul 2022:
The 2022 Trafficking in Persons (TIP) Report was released recently, and Malaysia remains at Tier 3 for a second year. In this two part-series, we look at key excerpts of the report, which should give a sense as to what national policy and implementation could or should be as well as other non-Western labour standards Malaysia is struggling with.
Palm oil price is looking to find a footing with the ramp up of Indonesia domestic demand via an expanded biodiesel mandate whereby Indonesia plans to implement B35 in biodiesel by end of July. In another two part-series, we contemplate two questions: with demand side worries abound amidst inflationary and other concerns, what are some of the economic issues and is there demand destruction with 4–10% contractions?
Malaysia made a confusing price control lift, with rapid response among politicians on maintaining subsidies. But there is little regard on the leakage from the billions that go into food subsidies. Read our post for our full analysis.
BOM reported on 5 Jul that there is about a 50% chance of La Niña occurring later in 2022. BMKG made similar a forecast, warning that Indonesia may face heavier-than-usual rainfall up until the end of 2022.
Khor Reports’ PalmTrack is an independent research service that tracks palm tanker movements and reports trade of palm products (and shipments, upon request) for selected trade routes. It features a forward-looking market topic and sharp analysis every quarter, e.g. palm biofuels issues & opportunities for Jan–Mar 2022. Subscribe now!
Here is a wrap up of the some of the issues PalmTrack covered in May 2022:
Neste Oyj is a leader in HVO-SAF products using 95% waste/residue input (bio)share—that's a bit different from co-processed HVO-SAF. We looked at recent news on its margins, deals, and Singapore expansion.
The shock of the Russia-Ukraine conflict added tremendous pressure to the already tight vegoil, grains and input markets. We listened in on a global fertilizer briefing, and it seems like markets have gotten used to and are indeed getting over the conflict impacts. We also took a look at what observers are saying about freight rates and port congestion, which are of relevance to agricultural inputs.
How quickly prices move and relative prices can reverse, with palm oil now cheaper than gas oil and making voluntary blending viable! We chatted with a trader to find out what’s been happening and what’s next in the violent price correction, and another on potential demand-side issues in energy demand and Chinese restocking.
The US CBP conducted a virtual workshop on forced labour facilitated by MPOC on 8 June, which provided a guide as to how the agency generally enforces its anti-forced labour tools, as well as how it modifies and revokes imposed export bans.
There were several updates in the palm industry in the week of 10 June, including Indonesia allowing exporters not on its list of companies approved for bulk cooking oil distribution to ship palm oil subject to a extra charge on top of the existing export tax and levy.
Khor Reports’ PalmTrack is an independent research service that tracks palm tanker movements and reports trade of palm products (and shipments, upon request) for selected trade routes. It features a forward-looking market topic and sharp analysis every quarter, e.g. palm biofuels issues & opportunities for Jan–Mar 2022. Subscribe now!
Following the previous post on Malaysia, Singapore, and the Chicken Problem - Part #1 late last week, here are our thoughts and observations on the matter.
Observations. The aspect I know a bit more about is for Malaysia, it seems clear that producing chickens for the domestic market at the target price is/was loss making per bird. The government was looking at suggestions on palm-based chicken feed to help lower cost but that is unlikely as palm kernel expeller/cake/meal, while well established, is primarily used as feed for ruminants, mostly dairy cows. While the industry hope and experiments for wider use for chickens, that is still a work in progress.
(Inside story: policy analysts were a bit surprised that some plantations made this suggestions when, with basic research, it becomes obvious that palm material not an immediate solution).
Instead, the Malaysians went with a cash handout to B40s and buffer stock policy for now, as the mechanism to help poultry breeders seems uncertain no subsidy support plan has been announced. Governments are likely to be struggling with industries to supply export products to domestic consumers as the high international prices attract big volumes out. Export restrictions can tighten global/regional supply even more and distort export prices upward even more.
Another example is the cooking oil conundrum in Indonesia that has pitted their President against an alleged 'cooking oil mafia.' There is worry about a 'chicken cabal' in Malaysia. While politicians and policy makers figure out chicken suppliers, and with more money in the pocket, B40 consumers may have to find other proteins for their rice.
Further observations. Malaysia observers have noted that even the likes of KFC are resorting to selling more patties as fresh chicken is in acute shortage locally. They are not sure whether this issue can be easily resolved, as the government is still maintaining the price ceiling.
In the meantime, consumers in Singapore are not noticing chicken shortages. A banker friend told me: "We can get chicken everywhere, I just had a curry chicken toastie for lunch." Economists there are not worried about supplies at present, as Singapore can pay for chilled and frozen chickens from other nearby countries such as Thailand and further from Australia.
