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.

#BenderaPutih Trending on Twitterjaya

As the country continues its movement order control—this time with seemingly no end in sight—Malaysians have again banded together to help each other without waiting for official aid, this time in the form of the #BenderaPutih (white flag) movement. A “sister” hashtag to last year’s #KitaJagaKita, the movement encourages those facing financial difficulties to reach out for assistance by flying a white flag at their homes without fear of humiliation (embarrassingly, like its “sister” hashtag, several politicians attempted to piggyback on #BenderaPutih movement, only to receive the outrage of netizens).

The online campaign has trended significantly on social media—data shows a relatively high usage of the hashtag in many major areas outside of Kuala Lumpur/Selangor, including Kota Bharu, Kuala Terengganu (east coast, Peninsula), Alor Setar, Johor Bahru (west coast, Peninsula), Kuching, and Kota Kinabalu (East Malaysia).

Heatmap showing concentration of #BenderaPutih usage across Malaysia. Note: map is indicative and not to, i.e. bigger than, scale

In comparison, social media attention on #BenderaPutih is significantly higher than some other related hashtags, such as #ProtesDarurat and #BantahDarurat, which cumulatively only received around 16,000 mentions since they were first used in October last year compared to #BenderaPutih’s 73,000 mentions (and counting) this week.

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Sources for aid/if you’d like to help (please note that this list is not exhaustive):

1. #BenderaPutih: Where to get help: MalaysiaKini has compiled a list of programmes that can provide help, which include locations of Shell petrol station food banks and 99 Speedmart’s grocery package programme.

2. Facing #BenderaPutih, Malaysians help each other with free meals, food baskets, free tuition, listening ear: The MalayMail has prepared a list of programmes which include free online tuition by Projek Didik.

3. #KitaJagaKita: #KitaJagaKita maintains a “one-stop shop” website of initiatives where people can either ask for or volunteer help.

SIIA Haze Outlook 2021: Reviewing 2020

Last week, the annual Haze Outlook 2021 was launched, a report on the recurring haze event in Southeast Asia authored by the Singapore Institute of International Affairs (SIIA) and Segi Enam Advisors. Part of the report reviewed the haze conditions—or lack thereof—in 2020.

While initial fears was that Southeast Asia would be battling both the Covid-19 pandemic and the annual transboundary haze simultaneously, no severe haze incident was recorded for in 2020. This was partly due to weather conditions within the region, i.e. a strong La Niña and a muted India Ocean Dipole phenomena resulted in one of the wettest year for Indonesia in the past decade, thereby dampening fire occurrences.

Consequently, much fewer hotspots were recorded in 2020 compared to 2019. The Indonesian Ministry of Environment and Forestry (KLHK) reported that some 297,000 hectares of land were burned in 2020 compared to the 1.6 million hectares in 2019.

Data: Hotspot imagery from NASA’s Fire Information for Resource Management Systems (FIRMS, https://earthdata.nasa.gov/firms), peatlands from Jiren et al. (2019), and Khor Reports estimates. Source: Segi Enam Advisors (2021).

Nonetheless, the outbreak of the coronavirus has had some effect on the Indonesian fire prevention landscape. For one, the pandemic appeared to have somewhat hindered replanting activities in the agricultural sector, although businesses and experts have indicated that this was more apparent in rural areas compared to urban centres. On the other hand, Covid-19 has adversely impacted Indonesia’s fire fighting and prevention capabilities: initiatives such as outreach programmes with fire-prone villages and corporate fire management efforts were scaled back and government resources had to be redirected to manage the pandemic.

Read the full report here: SIIA Haze Report 2021

BFM: Non-essential Companies Reportedly Getting MITI Approval

Segi Enam principal Khor Yu Leng recently went on BFM to discuss about reports that some companies are slipping past the “essential sectors only” rule, enforced as part of Malaysia’s third lockdown, via approval letters purportedly issued by the International Trade and Industries Ministry (MITI). Given the rising public tension with regard to how the government is managing the coronavirus pandemic, this issue is unsurprisingly quite a heated one. Click on the following link to listen to the podcast: Non-essential Companies Reportedly Getting MITI Approval

As we go through MCO 3.0, there have been reports of non-essential companies that seem to have received permission from MITI to remain open and operate. We discuss why this might be happening, and how the vetting process can be improved.

Image Source: Jon Tyson, Unsplash; produced by: Kelvin Yee, Azlyna Mohd Noor; presented by: Sharmilla Ganesan, Lee Chwi Lynn

US Agriculture Exports: Day 2 Highlights on Supply and Logistics

The 3rd Agricultural Supply Chain 2021 has just ended its three-day run covering a wide range of topics surrounding the US grain and corn industry, and supplemented with discussions from agricultural and trade experts.

Day 2 of the conference focused primarily on the US and global agribusiness supply chain. Unsurprisingly, one subject matter of interest is how the Covid-19 pandemic has affected the industry. Production-wise, the pandemic has resulted in a significant loss of more than USD 4.7 billion between January and June 2020 for US soybean farmers and crushers, although projections have suggested much more optimistic conditions for crushers in 2021, with positive projections including strong demand for soybean meal productions and protein-based products.

Source: National Oilseed Processors Association (2021)

From a logistics and transportation viewpoint, one expert discussed the undergoing changes in the transportation network of the food supply chain in general as the world adapts to the “new normal” resulting from the Covid-19 pandemic.

Source: IHS Markit (2021)

Again, discussions on the impact of the coronavirus outbreak on the agribusiness supply chain is timely. News is surfacing about shipping carriers rejecting an estimated 177,938 containers of US agricultural products during October and November 2020, preferring allegedly more profitable Chinese exports instead. This occurred during a peak season for agricultural products, following the harvest of crops, and according to port trade data, has resulted in a loss of USD632 million from the Port of New York and New Jersey alone. US exporters have been petitioning the Federal Maritime Commission, warning that the delays from these refusals are undermining industry reputation and threatening profits.

BFM: Demand is the Real Issue

Last week, our principal, Khor Yu Leng, was invited to speak on BFM on whether demand is the real problem in the palm oil sector amidst the Covid-19 pandemic, and if the restrictions on foreign workers will adversely impact the supply chain. Click on the following link to listen to the podcast: Demand is the Real Issue.

“The palm oil sector supply chain, what can be considered an essential service during the many phases of the movement control order was largely not impacted by Covid-19. We ask Khor Yu Leng whether demand is the real issue here and if the restriction on foreign labour will be a problem for Malaysia’s most important agricultural export.

Produced by: Dayana Mustak

Presented by: Wong Shou Ning, Khoo Hsu Chuang.”

Oils & Fats International: The Impact of Covid-19 on Global Oils and Fats Supply, Demand, and Prices

On 9th June 2020, Khor Reports attended a webinar hosted by Oils & Fats International (OFI) on the impact of the coronavirus on global oils and fats trade. There were several interesting points made during the session:

1. The most severe immediate shock from the Covid-19 outbreak has passed. While outputs of the vegetable oils has been affected, the impact was not as bad as initially expected. Demand has, however, been adversely affected due to the lock-downs enforced globally. There is a concern that the markets may have lost sight of the longer term macro-economic shocks.

2. While soybean prices have been steadily falling due to the pandemic, the decline has also been attributed to market expectations that US will be competing with Brazil in the soybean trade (Brazil still dominates as China’s primary supplier of soybean imports) as well as the US-China bilateral agreement. Since soybean demand from China has been steady, the Asian giant will be reaping benefits from low international prices.

3. The market currently appears to be more interested in digesting positive news, with each piece of information being construed as optimistic. As such, the full impact of the damage caused by the coronavirus will only be known after the pandemic is truly well and over. It is expected that economies around the world will operate between 80-90% of their capacities by the third quarter of 2020 between July and September, and will only be optimal around late December.

Click here to watch the recording of the webinar.

IVPA: Is COVID a Bull or a Bear for Veg Oils?

On 29th May 2020, Segi Enam Advisors attended a global webinar organised by the Indian Vegetable Producers’ Association. The webinar sought to address the effects of the Covid-19 pandemic on the supply chain of vegetable oils around the world, as well as other relevant trade and policy issues.

There were several interesting takeaways from the session:

1. In India, the demand for palm oil from the hotel, restaurant, and catering industry (HoReCa) has collapsed due to the lock-down. The pandemic has also called India’s food security into question, with suggestions for the government to enact policies to ensure smooth movement of the vegetable oil supply chain, particularly with regard to interstate logistics.

2. Total Indonesian and Malaysian palm oil exports to China and India has fallen sharply in the first quarter of 2020, although it was pointed out that sales to China are known to have recovered by April 2020. Globally, while the output of vegetable oils was not as badly affected as initially expected, demand has dipped much more significantly due to the lock-downs enforced across the globe.

3. In Argentina, there are transportation problems within the agriculture industry. The main cause is the low water levels of the Parana River, which transports approximately 96% of agriculture products, a situation further aggravated by Covid-19 (although it should be noted that these logistical issues preceded the outbreak). Experts project an improvement by Aug-Sep 2020.

4. The bilateral agreement signed by China and the US is now uncertain, especially in light of the coronavirus outbreak and recent developments in Hong Kong. It was also suggested that globalisation will not roll back but will have fewer Chinese characteristics, as supply chains are restructured and governments consider protectionist measures.

Click here to watch the video recording of the webinar.

Economic Recoveries after the Coronavirus

Another bit on the coronavirus, this time focusing on economic recovery predictions after the coronavirus pandemic. A swoosh recovery scenario is added into the growing realms of possibilities, with some experts agreeing that no matter how it recovers, there is nowhere for the economy to go but up; but changes are substantial. Here are some recent notable headlines:

Economist: Has covid-19 killed globalisation? The flow of people, trade and capital will be slowed

WSJ: In April, U.S. unemployment surged to 14.7%. Among women, the rate rose to 16.2%, compared with 13.5% for men. Economic shock hits lower-income households harder. Almost 40% of households earning less than $40,000 annually experienced at least one job loss in March, compared with 19% of households earning between $40,000 and $100,000, the Fed said.... U.S. retail spending fell a record 16.4% in April from a month earlier as consumers stayed home and demand plunged…. Germany fell into recession in the first quarter, with its gross domestic product shrinking by 8.6% on an annualized basis, but is nonetheless expected to fare better than its neighbors over the balance of 2020. The eurozone economy as a whole contracted by 14.2%, while the U.S. economy shrank by 4.8%.

#CovidEconomics #Covid19 #Economics #EconomicRecovery #Demand #BehaviouralChange

Covid-19 Boosts Vitamin C but Hits Retail in Hong Kong

Watson's Hong Kong has been hit by the pandemic but immunity boosting vitamins subcategory, such as vitamin C, as the retailer “saw first quarter sales jump over 40-fold year on year". Hong Kong’s retail sales in the first quarter, which fell by 36.9%, was the deepest year on year decline on record. This comes as the city remains mired in a recession. The economy contracted by 8.9% in the first quarter of this year, the worst on record, having been hit hard by months of anti-government protests, a trade war between the US and China, and the ongoing coronavirus pandemic.

Here’s a #throwback to our post on online public interest in #turmeric and #vitamin C during the coronavirus outbreak.