SCMP Interview: Indonesia’s triumph over palm oil ‘win’ over EU before the WTO but demand and market access issues could sour hopes

Segi Enam Advisors principal Khor Yu Leng was cited by South China Morning Post (25 Jan), for her views on Indonesia’s palm-oil biofuel ambitions following the WTO’s decision. The decision, issued on 10 January 2025, ultimately upheld the EU’s ability to take environmental and climate-based action under its Renewable Energy Directive and affirmed the EU’s classification of palm-oil based biofuel as ‘high risk’ due to its links with deforestation. Notwithstanding, the organisation also criticised the EU’s procedures for lacking transparency and for insufficiently reviewing data to justify its ‘high risk’ designation, rendering them inconsistent with WTO rules. Indonesia, the world’s leading palm oil producer, has since framed the WTO’s criticism of the bloc’s procedures as a “win” in its ongoing battle against EU restrictions on its palm-oil biofuel ambitions. The EU has since stated that it will ‘take the necessary steps to respect its WTO obligations’. 

Yu Leng’s comments, as quoted by South China Morning Post, are as below. She referenced Malaysia’s 2021 dispute, in which Malaysia brought a WTO claim against the EU over the latter’s classification of palm oil and palm crop-based biofuels as being at ‘high risk’ of indirect land-use change and argued the measures were discriminatory. In 2024, the WTO upheld the measures taken by the EU, as well as affirming certain related French measures. 

Khor Yu Leng, a political economist at Singapore-based Segi Enam Advisors, noted that the ruling echoed Malaysia’s earlier dispute with the EU. “The EU broad policy was upheld, again, but its procedures were faulted,” she said, describing it as “deja vu”....

… Indonesia and Malaysia together produce more than 85 per cent of the world’s palm oil and have been at the forefront of the push for palm oil-based biofuel. Both have sought to leverage their palm oil reserves as a renewable energy source by blending the commodity with ordinary fossil-fuel diesel.

But palm oil biofuel faces an uphill battle. Despite ambitious targets – Indonesia plans to increase its biodiesel blend to 40 per cent this year and up to 50 per cent by 2029 – the global market for palm oil-based biodiesel remains thin, Khor said.

“For a thinly traded palm product, there has been a surprising amount of ink and political capital spent on it,” she said, noting that even neighbouring Southeast Asian countries are prioritising electrification over biodiesel.

“Despite giddy hopes over 10 years ago, there’s just not much trade in this product. Both Malaysia and Indonesia cannot even get neighbouring countries to provide policy support for this.”

Retrospective: Floods in Thai rubber areas, China Daily Interview

by Khor Yu Leng, yuleng@segi-enam.com

News Alert: Since 28 January 2025, heavy rainfall in Malaysia’s Borneo has caused severe flooding, displacing thousands. Sarawak has over 12,000 evacuees, with Bintulu the hardest-hit district, while Sabah reports over 5,000 evacuees, mainly in Kota Marudu, Pitas, and Lahad Datu. Although conditions improved in early February, NADMA warns that thousands remain in relief centers, and on 5 February, Sarawak issued a red alert for potential floods in 26 districts. A Sarawak politician described the flooding in Bintulu, Miri, and Kuching as among the worst, with some floods and landslides everywhere else in the state. (See 30 January weather warnings from Google and Met Malaysia below).

Note: In related news, Bintulu MP Tiong King Sing blames ‘devastating’ floods on failure to see through Sungai Sibiew deepening | Malay Mail and Sarawak braces for king tide amid eased flood situation | Borneo Post Online

On 3 Dec 2024, Khor Yu Leng shared these comments to Prime Sarmiento at China Daily, who was reviewing the problem of the southern Thai floods: 

Khor Yu Leng, director of Singapore-based consultancy Segi Enam Advisors, said climate change is influencing global rainfall variability and cyclonic patterns, leading to an increase in monsoon-related flooding.

Khor, a veteran commodities trade analyst, said the current flooding in southern Thailand and northern Malaysia was worsened by high population density in flood-prone areas, vulnerable river systems, coastal exposure, and inadequate flood defenses.

Our detailed analysis behind our comments given to China Daily is as follows.

Though the full impact of the floods of end November-early December 2024 has yet to be fully comprehended at this juncture, it is already apparent that non-core production regions in Thailand were affected notwithstanding that the total farm output or GDP impact remains to be seen.

However, we can preliminarily look at rubber price as a market indicator and what kind of consequences one can expect. Reports on the ground say as follows: “Southern provinces, subsiding now”’; “I don’t think it’s bad as they make it, but if there are to be handouts then perhaps they build it up to be more major”.

Context of November-December 2024 flooding in Southern Thailand 

Southern Thailand grappled with severe flooding following torrential rainfall driven by the north-east monsoon. The north-east monsoon typically runs from November to March whereby winds from the north-east picks up moisture from the Gulf of Thailand to later deposit it as heavy rain across the gulf islands and parts of Thailand’s southern peninsula. 

Southern Thailand typically experiences high rainfall annually around November-December, but November-December 2024 saw the region experience rainfall at levels significantly above average, affecting five provinces: Songkhla, Satun, Pattani, Yala, Narathiwat.

The above-average rainfall of end-2024 resulted in significant flooding in five provinces, affecting 136,000 households, claiming 29 lives and causing significant damage particularly to rubber plantations, with losses estimated at 20bn baht (~USD $550m). The estimated area impact spans an estimated 800,000 hectares.

Map of affected regions, southern Thailand

These areas experienced extensive damage, with over 5 million rai (approximately 2 million acres) of rubber plantations impacted. The Rubber Authority of Thailand (RAT) indicated that farmers will be unable to tap their rubber trees for another six weeks, exacerbating the financial losses due to the current latex price of 65 baht per kilogram (~USD $1.8).

Causes of floods in the region

Meteorology experts have identified several key factors contributing to the recent flooding to the region that spans South Thailand and to North Malaysia, too. The analysis reveals a combination of climatic conditions, seasonal patterns, and geographical vulnerabilities.

1. Heavy Rainfall: Experts note that heavy and prolonged rainfall has been a significant contributor to flooding, particularly in states like Kedah. Rainfall has been exacerbated by low-pressure systems originating from the Kra Isthmus in Thailand, which have led to increased precipitation in the region.

2. Northeast Monsoon: The onset of the northeast monsoon, that typically peaks annually in November and March, brings heavy rains to the east coast of Peninsular Malaysia. In 2024, climatologists warned that the monsoon may lead to more intense rainfall due to an unstable atmosphere associated with La Niña conditions. 

3. High Tides: The combination of heavy rain and high tides has been particularly concerning. Experts predicted that extra high tides occurring between 18 to 20 October may have coincided with heavy rainfall, significantly increasing the risk of flooding in coastal areas. 

4. Geographical Vulnerabilities: Areas like Kedah are prone to flooding due to their topography, where rapid water flow from upstream areas can overwhelm drainage systems, leading to flash floods. This has been observed in districts such as Baling and Kota Setar.

5. Recurrence of Flood Events: Many regions have experienced repeated flooding events, where new downpours follow quickly after waters recede from previous floods. This cycle creates a compounding effect on flood risks. 

6. Climate Change Factors: Experts highlight that climate change is exacerbating extreme weather patterns, making it increasingly difficult to predict rainfall accurately. The interaction between various weather systems, including low-pressure areas and monsoonal flows, has led to unexpected flooding events.

El Niño/Indian Ocean Dipole and typhoon season trends

The current flooding in southern Thailand (and northern Malaysia) is linked to a low-pressure system that formed over the South China Sea. This system moved through the Gulf of Thailand into the Andaman Sea, bringing heavy rains and causing widespread flooding. Notably, this event is apparently not directly tied to a specific typhoon or named storm​.

Scientists seem to agree that climate change is associated with variability of rainfall and cyclonic patterns globally, and excessive monsoon flooding has become frequent in recent years. 

Some warned earlier this year that the monsoon could bring more intense rainfall due to an unstable atmosphere associated with La Niña conditions. However, at present, the relevant climatic metrics show an ENSO-neutral phase, and the Indian Ocean Dipole (IOD) is tending negative. If both were negative (i.e., strong La Niña conditions), it would serve as a stronger indicator of heightened rainfall and storm activity. The northeast monsoon, which peaks between November and March, typically brings heavy rains to the east coast of Peninsular Malaysia and southern Thailand​.

Attending the ASEAN Economic Opinion Leaders Conference: Insights for 2025

We recently attended the ASEAN Economic Opinion Leaders Conference: Outlook for 2025, held at MITI, Kuala Lumpur, from 8-9 January, 2025. The event brought together key industry leaders, policymakers, and economists to discuss the region's future under Malaysia's ASEAN Chairmanship.

Across two days, we joined insightful sessions, including:

1. The Digital Economy and Green Economy - ASEAN’s Future Engines of Growth: Yeoh Keong Hann (YTL Power) emphasized the importance of balancing domestic advantages in renewable energy with equitable distribution across ASEAN. He proposed ideas like connecting regional power grids to facilitate energy trading. Firdaus Hisham (UEM) highlighted the need to harmonize regulations to attract investments and accelerate large-scale green initiatives.

2. World Bank’s Economic Outlook for ASEAN: Manu Bashkaran (Centennial Asia Advisors) and Aakash Mohpal (World Bank) provided a comprehensive view of post-pandemic economic recovery. They stressed empowering SMEs as critical drivers of innovation and job creation while addressing geopolitical risks, such as shifts in global trade patterns and increasing transport costs.

3. Reinforcing Regional Economic Integration for a Resilient ASEAN: Satvinder Singh (ASEAN Secretariat) and Nazir Razak (ASEAN-BAC Malaysia) explored innovative solutions like the idea of an ASEAN business entity to facilitate seamless operations across borders. They also discussed revisiting older initiatives, such as customs integration, to strengthen regional supply chains.

These dialogues underscored ASEAN's resilience and potential, with a focus on sustainable growth, innovation, and regional collaboration. The conference set an optimistic tone for Malaysia’s role in leading ASEAN into 2025 and beyond.

Panel Discussion, ‘Reinforcing Regional Economic Integration for a Resilient ASEAN’

With Chee Hau (Ministry of International Trade and Industry)

Palmtrack: UCO & tallow in the world of palm oil

Editor's Note: this article first appeared on PalmTrack, 17 December 2024. Subscribe to PalmTrack here to get the latest posts!

UCO (used cooking oil) and tallow (rendered animal fat) are two key materials used to produce biofuels like biodiesel and renewable diesel. They both come from waste products, making them sustainable alternatives to conventional feedstocks. From our May 2024 review on Singapore, you can see details from our findings, in the chart below.

UCO is simply waste oil left over from cooking and frying food. Think of the used oil from restaurants or even your kitchen—it’s collected and repurposed instead of being thrown away. In Southeast Asia and beyond palm cooking oil is a major source of UCO. The global palm oil consumption is around 75–80 million tons per year recently, with a significant portion used in cooking. If 20–30% of this were converted into UCO, it could yield 15–24 million tons of UCO annually? But there’s many reasons why the volume is not that high (read about context and issues below).

Indonesia, Malaysia and Singapore are key countries in the trade and processing of palm oil. How does UCO and tallow feature in their trade? Let’s check out the import and export statistics.

Our key findings:

• About 400k tonnes of degras from Indonesia, from domestic sources. Imports are low to negligible.

• Over 1 million tonnes of UCO plus tallow from Malaysia, as a transhipment hub,

  backed by about the same amount of imports, that is up until 2021. The divergence of UCO exports (uptrend) and UCO imports (collapse) in 2022 and 2023 is surprising? The gap of exports and imports is surely not from domestic sources. This needs much explanation. (We’ll have to ask around!)

• Singapore has been sucking in about 1.7 million tonnes annually, of UCO and tallow recently! The renewable diesel/SAF plant of Neste in Singapore has a capacity of over 2 million tonnes. We would love to report on the exports of these products, but even the EU has problems tracking this. (Quantum reported, Oct 2024: The EU is expected to introduce an HS code for sustainable aviation fuel (SAF) in the near future. The purpose of this code is to increase the visibility of trade flows and address concerns that SAF could be used to avoid anti-dumping duties on Chinese HVO.)

Malaysia. The 20-year trend for Malaysia's exports of UCO, degras, and tallow indicates that this segment emerged in the early 2000s, albeit with low export volumes. Exports experienced slight spikes in 2006 and 2013, followed by a strong upward trajectory starting in 2015. Malaysia's imports of UCO, degras, and tallow have mostly matched exports, highlighting its role for transshipment. However, Malaysian imports of UCO diverged from this trend, showing a significant upward climb from 2017 onwards, peaking at approximately 690,000 tons in 2021, then declining substantially. This drop is surprising as Malaysia has a relatively low supply of domestic UCO. What's going on? Is another HS code in play for these imports?

Indonesia. In general, imports are minimal and remain consistently so throughout a twenty-year period. Indonesia is an exporter of domestic waste oils. The trend for exports of UCO, degras, and tallow in the early 2000s was low. UCO exports had a sharp rise 2006 to 2008, followed by modest growth until 2015 when a strong upward trajectory emerged with a peak in 2021 followed by 200,000 tonnes exports annually most recently. Degras exports showed low-steady activity before surging in 2023. Might this reach 200kt a year?

Singapore. Export volumes have remained low overall, with some uptick between 2007-2009 and 2011-2013 which seem to be matched by imports, but less so for tallow. Since 2015, UCO imports have really surged, reaching over 1.2 million tonnes a year in 2023. Tallow imports spiked 2016-2019, stabilising around 500,000 tonnes annually since 2020 with a slight downward trend. Refer to our notes on Neste, which is a major processor of these raw materials into value-added products - renewable diesel and SAF, and our graphic at the top of this article.

Context and issues

Why use UCO in biofuels? It’s sustainable. UCO doesn’t compete with food crops since it’s essentially a waste product. It’s cost-effective. Repurposing UCO is cheaper than producing virgin oils. It’s good for the environment. Recycling it reduces landfill waste and lowers greenhouse gas emissions. UCO is processed through methods like transesterification (to make biodiesel) or hydroprocessing (to create renewable diesel). These biofuels can then power vehicles as eco-friendly alternatives to fossil fuels.

Tallow comes from rendered animal fat, a byproduct of the meat industry. It’s mostly derived from beef or mutton fat, but other animal fats can be used too. Tallow is valuable in biofuels as it reduces waste. Tallow turns animal byproducts into something useful. It’s energy-rich. Packed with lipids, tallow is highly efficient for biofuel production. It supports a circular economy. It’s a great way to reuse materials that would otherwise be discarded. Similar to UCO, tallow is transformed into biodiesel or renewable diesel using advanced chemical processes.

Q: How do UCO and tallow compare to other feedstocks?
A, Both have a lower carbon intensity than conventional feedstocks like palm oil or soybean oil, making them more environmentally friendly. Plus, governments often incentivize their use through renewable energy policies and standards.

Q: Are there challenges?
A. Definitely! These include:

• Limited supply: Collecting UCO efficiently can be tricky, and the supply depends on how much waste is generated.

• High demand: As more industries rely on UCO and tallow, competition for these resources is growing.

• Processing hurdles: Both require proper filtering and treatment to remove impurities before they’re converted into biofuels.

Bottom line: UCO and tallow are game-changers for sustainable energy. They reduce waste, lower emissions, and contribute to global renewable energy goals. Plus, everyone is keen on their role in the circular economy.

UCO is a great option for sustainable biofuels, but it comes with its share of controversies. These include: 

• Fraud: Some UCO gets reused in food (like “gutter oil”), which is unsafe. There’s also fraud, where virgin oil is mixed in to claim subsidies.

• Traceability: It’s hard to confirm UCO is genuinely waste, especially in global supply chains. Exporting UCO can also deprive local communities of a valuable resource.

• Environment: Collecting and shipping UCO has a carbon footprint, and some fear rising demand might lead to creating waste oil intentionally.

• Economics: UCO has other uses, like making soap or animal feed. Prioritizing biofuels could disrupt these markets or raise costs.

• Greenwashing: UCO is limited, and critics worry its “sustainability” is exaggerated, shifting focus from reducing fossil fuel use.

Key controversies: (i) China's Gutter Oil Scandal: Reports of UCO being repurposed for human consumption have highlighted safety risks and the need for stricter regulations. (ii) EU Imports: The European Union’s heavy reliance on UCO imports for biofuels has faced criticism for its environmental costs and the potential for fraud in tracing the source of UCO.

Tallow has its own controversies. These include:

• Ethics. Animal Welfare: Since tallow is derived from animal fat, its use raises ethical concerns for vegans and those opposing industrial livestock practices.Dependence on Meat Industry: Critics argue that relying on tallow for biofuels indirectly supports large-scale meat production, which has significant environmental and ethical issues.

• Environment. Deforestation Links: Increased demand for meat (and thus tallow) may contribute to deforestation for grazing land. Carbon Emissions: Although tallow-based biofuels have a smaller carbon footprint than fossil fuels, livestock farming produces significant methane emissions, offsetting some of the benefits.

• Economics and supply. Competing Uses: Tallow is also used in products like soap, cosmetics, and animal feed. Diverting it to biofuels could drive up costs for these industries. Limited Availability: As a byproduct of meat processing, tallow supply is finite and cannot scale easily to meet growing biofuel demand.

• Culture. Religious and Dietary Restrictions: In some cultures, the use of animal-derived products, including tallow, is controversial or unacceptable.

Special Report: Rainfall and Floods in Peninsular Malaysia

Since 29 November, the East Coast of Peninsular Malaysia has been inundated with floodwaters to such an extent that the Deputy Prime Minister issued a statement describing the flood situation in Kelantan and Terengganu (Peninsular Malaysia) as being worse than the severe floods of 2014. Rainfall has also flooded parts of Kedah, with water from Sungai Anak Bukit entering the official residence of the Kedah Menteri Besar and reaching up to 0.5 meters in the kitchen quarters. 

The flood death toll from northern Malaysia and southern Thailand has risen to nine with 140,896 people displaced in Malaysia and 640,000 households affected in southern Thailand, as of the time of writing. The Chana district of Songkhla province has reportedly suffered the worst floods in 50 years, triggered by three days of heavy rain in the southern region. A heavy rain warning remains in effect, with heavy to very heavy rains that may cause flash floods and overflows until early December, according to the Thai Meteorological Department.

Indeed, Met Malaysia’s Long Term Weather Outlook had predicted that November had above average anomalies in Perlis and Kedah. Rainfall for Terengganu and parts of Kelantan was predicted to be wetter, receiving >60% (about 600mm) of rainfall.  We had covered this in our Weather Update on 20 November 2024, however we note that Sabah has been downgraded from an anomaly risk. 

On 27 November, Malaysia Met issued warnings for Kelantan, Terengganu and parts of Pahang were set to receive dangerous levels of rainfall. 

On 30 November, Malaysian Met issued warnings that continuous heavy rain at danger levels is expected to occur in Kelantan, especially in Tumpat, Pasir Mas, Kota Baru, Jeli, Tanah Merah, Bachok, Machang, Pasir Puteh and Kuala Krai.

Besut, Setiu, Kuala Nerus, Hulu Terengganu, Kuala Terengganu and Marang in Terengganu are also forecasted to experience continuous heavy rain during the same period.

For December, however, Met Malaysia has predicted above average anomalies for parts of Kelantan, Terengganu, Perak, Kedah, Perlis and Sabah. Rainfall for the East Coast (Kelantan, Terengganu, Pahang) is expected to exceed >60% (about 600mm) above normal levels.

On-the-ground reports from agricultural groups in Kelantan, such as the Kelantan Farmers Association (PESAK)), indicate that 26,000ha of paddy fields have been submerged in flood waters. Some of these fields were only recently sown with seeds a few weeks ago. The sowing process for January 2025 had reportedly been already delayed due to earlier water supply issues with many farmers already unable to plant paddy for three consecutive seasons.

At Indonesia mining & palm oil events, and the Agri Malaysia showcase

Yu Leng attended Mining Indonesia 2024, which showcased heavy equipment, including giant tippers, and some (much smaller) electric models. 

Note: from internal analysis & presentations. For more information, please contact research@segi-enam.com.

Yu Leng also engaged in sustainable palm oil efforts in the region with recent visits in Jakarta and Sumatra. See our LinkedIn post (here) and further reflections:

At AgriMalaysia 2024. Demand for the yearly exhibition was observed by the presence of two halls as compared to one hall in previous years. Chinese suppliers were in greater attendance. Agricultural produce purchased included mushrooms and passionfruit. Discussions with Liew Yew Ann about palm oil, agronomy, mechanisation, and coconut farming prospects. The durian sector had plenty of supplies. Great effort by Yi Xuan Lai for Yara Malaysia's fertigation efforts. See our LinkedIn post (here) and further reflections:

Social media scan on palm oil @ 16 Oct 2024

Here’s a scan of some news and issues that have caught the attention of palm oil watchers, in the last three weeks! We mostly pick up on things on Twitter/X. Come here for more, https://x.com/khorreports. 

EUDR. A hot topic amongst regulators and market players, we have argued it would be a two year muddle-through. Maybe for three years, with the one year additional time? Alerts on X (1) and (2). There is positive feedback about enhanced regulations and traceability in the palm and rubber industries, including in Ivory Coast, Malaysia, and Thailand. The regulatory upgrades are being underestimated, while costs may be overestimated. Aida Greenbury praises how cocoa farmers in Ghana are preparing for the EU's Deforestation-Free Due Diligence regulations.

On prices and trade. Susan Stroud is a notable expert on soy from North America. A 25-year palm oil price chart from Malaysia's BMD is mentioned, and Indian buyers are canceling palm oil shipments due to a sharp duty hike and rising Malaysian prices. Alerts on X (1), (2), (3).

Malaysia’s palm oil consumption has dropped significantly. Diesel consumption in Malaysia is down due to subsidy reforms, but oleochemical exports may gain from Indonesia's export duty adjustments.

News on Indonesia. New data shows an increase in palm oil deforestation in Indonesia in 2022, with no data yet for 2023. The government's Food Estates program faced challenges, particularly in peat areas, due to difficult terrain and market issues. Indonesia's Food Estates project raises concerns about food inflation, with climate change, a weak rupiah, and high imported food prices posing potential risks.

News from India. India's palm oil yields are around 12 tonnes/hectare, lower than major producers like Malaysia and Indonesia. India's vegetable oil imports dropped 30% in September due to lower demand and high prices, following higher imports in July-August. 

Palm oil is used in the energy sector and in renewables. Gas oil and Brent crude are key factors for palm oil market watchers. An oil asset map from @SPGCI provides detailed insights into the Middle East. Energy, beyond food and personal care, is crucial for the palm oil sector. The rapid growth of renewables is important. By 2030, solar PV and wind are expected to double their share to 30% of the global power mix, meeting around half of global electricity demand. (Palm oil biomass should count in the dark green “other renewables” segment.) But there’s always a risk of being called out on greenwashing… The UK advertising watchdog ruled Virgin Atlantic’s “100% sustainable aviation fuel” ad misleading and instructed them to clarify the environmental impact in future ads (note: SAF is a technical term and it still contains fossil fuels). 

Catch up on interviews with BFM

By Claudia Nyon, Research Associate, research@segi-enam.com 

Here’s a belated update on two BFM interviews back in August.

Yu Leng was on BFM’s Morning Run on 26 August 2024 to provide her insights on the increase of rubber prices against the impending implementation of the European Union’s Deforestation Regulation (EUDR). Yu Leng also considered the present challenges of smallholder producers of palm oil and rubber. The full podcast may be found here. 

Key points included: 

• Malaysia’s rubber yield may sound low but specialists think that trees are overcounted. Thailand has faced challenging wet weather conditions and output is down but on the other hand Malaysia’s output is up. Malaysia’s ranking in global production is below.

• Commodities are handled by different government agencies or statutory boards in Malaysia. There is one for palm oil, rubber, pepper and so forth. (Agronomists seem to complain about these as “silos”). Another complexity in rubber is that different zones have different farmer income models, notably for profit sharing or share cropping. 

• Rubber is largely produced in the northern states, where palm oil has not taken over these dryer regions. Smallholder experts think that (the true) rubber farmers needing help are individuals in remote areas. But domestically, there has been an understandable push for group farming (with hired/migrant labour) near towns. Perhaps a majority of rubber is produced under profit sharing, and this may need more consideration in current policy. 

A few extra points that didn’t make it, owing to time constraints:

• A near geographical monopoly concept exists and persists in Malaysian regulations. The ideal is a farmer having multiple mills to sell for then will there be better prices for a standard product. But mills have a clear incentive to partner with their smallholders for product quality and international ESG standards. 

• A lot can be gained from having information on the location of ultra low-yielding oil palms (“dura contamination” in industry parlance, where yields are -56% of normal yield). The Malaysian Palm Oil Board (MPOB) has invested a lot in detecting via genomic testing. Seeds can be verified for normal yield. There is a marginal cost increase for a major gain in production. One in eight oil palms in Malaysia are ultra low-yield, i.e., financially impaired. This is pretty surprising. 

• However, the industry needs to reconsider how they can expand these good practices from planting material all the way to harvesting and field logistics, and fairer prices. 

Yu Leng was also invited to give her take on Malaysia’s latest pledge to halt new palm oil plantations in forested areas on BFM’s Top 5 at 5, on 19 August 2024. Deforestation regulations such as the EUDR were raised and how its shaking up global commodity supply chains with origins competing against each other to sell high value add products, however limiting land might cause liberal state development policies to clash against federal powers over exporting and licensing via the MPOB. The full podcast may be found here. 

Editor’s Note: this clash between state and federal powers over the ban on new palm oil plantations in forested areas has recently materialised in the Kuala Nerus district, Terengganu. As reported by Malaysiakini in September (paywalled), Pure Green Development Sdn Bhd submitted an environmental impact assessment (EIA) to clear a state-owned peat swamp forest to develop a palm oil plantation. Following reports, the Department of Environment rejected Pure Green’s EIA (paywalled) and the Plantation and Commodities Minister, Johari Abdul Ghani, issued a statement (Bahasa Malaysia only) that the government’s bar against new palm oil plantations in forested areas still remains in force and referred to the Malaysian Sustainable Palm Oil (MSPO) certification policy.