Talks & Presentations
Segi Enam Research
POC2023 Panel Session - Palm Oil ...
Environment, Regulatory compliance
Yuleng Khor
The positive of the EUDR - inclusive of ...
Segi Enam Research
IDEAS-FedEx: Highlights on RCEP and how it can ...
IDEAS-FedEx: Highlights on RCEP and how it can benefit your business
Segi Enam Research
At Roundtable (RT) 2022 - Day 1 Observations
At Roundtable (RT) 2022 - Day 1 Observations
Segi Enam Research
PalmTrack—Sep 2022 Wrap Up
PalmTrack—Sep 2022 Wrap Up

PalmTrack

PalmTrack—Sep 2022 Wrap Up

Here is a wrap up of the some of the issues PalmTrack covered in Sep 2022:

  1. 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.

  2. 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.

  3. 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.

  4. 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.

  5. 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!

$380.00
Every year
$38.00
Every month

PalmTrack—Aug 2022 Wrap Up

Here is a wrap up of the some of the issues PalmTrack covered in Aug 2022:

  1. 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.

  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.

  3. 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.

  4. 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.

  5. 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!

$380.00
Every year
$38.00
Every month

PalmTrack—Jul 2022 Wrap Up

Here is a wrap up of the some of the issues PalmTrack covered in Jul 2022:

  1. 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.

  2. 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?

  3. 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.

  4. 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!

$380.00
Every year
$38.00
Every month

PalmTrack—June 2022 Wrap Up

Here is a wrap up of the some of the issues PalmTrack covered in May 2022:

  1. 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.

  2. 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.

  3. 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. 

  4. 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. 

  5. 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!

$380.00
Every year
$38.00
Every month

[Sample!] PalmTrack—US CBP Workshop on Forced Labour

Yesterday, the US CBP conducted a virtual workshop on forced labour facilitated by MPOC. The one hour-long workshop provided a useful 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 are primarily three types of forced labour enforcement tools the US CBP exercises: Withhold Release Order (WRO), findings, and penalties. Note the difference in standard of proof for each tool—“reasonable suspicion” has a much lower bar than “probably cause”, the latter requiring that the US CBP “conclusively demonstrate that the merchandise is prohibited” due to elements of forced labour along the relevant supply chain.

As of 8 June 2022, the US CBP reports on its website that Malaysia has six WROs and one finding.

According to the US CBP, its forced labour enforcement process comprises a nine-step process, initiated whenever it receives a tip, whether from “internal channels” or received from external sources, e.g. civil society, “tips from researchers”, about exported merchandise produced using forced labour. 

Companies slapped with WROs and/or findings are allowed to submit requests for modifications to and/or revocations of their export bans. The US CBP uses on ILO indicators as a guide when considering these requests. 

In response to a question posed about how companies could provide evidence that its goods were not produced using forced labour, it was emphasised that companies are strongly encouraged to hire a reliable, independent auditor as an assessor, although the US CBP quickly clarified that it does not and will not dictate any specific requirements of said auditor. Interestingly, one of the speakers had expressed bewilderment that one Malaysian company had opted to use its “internal auditors” to challenge its export ban and hoped that the US CBP’s later rejection of the aforementioned company’s report assessment assessment emphasises its insistence for an independent audit.

research@segi-enam.com | 9 Jun 2022

For online view only. Please do not redistribute without our express permission. We offer sponsor & subscription services for those who wish to do so.

Corporate Subscription offers more granular info-data details on product, trade and vessels mentioned in our reports.

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!

$380.00
Every year
$38.00
Every month

PalmTrack—May 2022 Wrap Up

Here is a wrap up of the some of the issues PalmTrack covered in May 2022:

  1. We’ve been updating a lot on the changed political-policy landscape for Indonesian palm oil. Note that the Jokowi administration has been struggling to get cooking oil at the right price to Indonesia consumers for months, toggling between the export-restricting DMO-DPO rules and export duty/levies. 

  2. Experts expressed surprise at Indonesia’s intentions to reimpose a domestic sales requirement effective 31 May 2022. CIMB in its agribusiness brief dated 23 May expects the potential impact of the regulation to depend on the new volumes and price obligations set by the government, it is overall still too early to conclude how the DMO will impact the market and/or palm oil players due to the lack of details.

  3. Weather and rainfall: On notable rainfall events (30 days to 11 May 2022), 30 days accumulated rainfall was est. above 500mm in Central and East Kalimantan, where a significant area has within those regions recorded an accumulated rainfall of est. above 500mm. On 13 May, BMKG issued a warning of heavy rainfall accompanied by storms and strong winds for several Indonesian provinces, including Aceh, and West and South Sumatra.

  4. Tankers from Indonesia: Port calls for 25 Apr–8 May 2022 (14 days) count, c.50 palm-related tankers, with sample net tonnage c.295k (versus 14 days to 10 Apr, c.60 tankers with sample net tonnage c.330k). These two weeks (25 Apr–8 May), the share of port calls was higher for European ports; conversely, the share is lower for CIS and American ports (versus 14 days to 10 Apr).

  5. On 7 May, the Indonesian navy seized its third vessel, the Mathu Bhum, after seizing two others, the World Progress and Annabelle, a week earlier. A review of the Mathu Bhum’s movement shows that the vessel was doing unloading/loading operations on 7 May 2022 at Belawan’s container port.

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!

$380.00
Every year
$38.00
Every month

PalmTrack—April 2022 Wrap Up

Here is a wrap up of the some of the issues PalmTrack covered in April 2022:

  1. Indonesia’s palm oil export ban: Indonesia has recently banned the export of palm oil. The ban encompasses several products—CPO, PAO, POME, RBDPL, RBDPL, RBDPO, and UCO—coming to a total of 12 HS codes. We turned to several sources following news of three executives of key palm companies and a senior bureaucrat charged in connection to the country’s cooking oil crisis that occurred just ahead of the ban, with one stating that “[t]he image of the industry is bad. If it is true, it has to be proved in court, but it is as if the whole industry is guilty.”

  2. Palm’s Animal Feed Hopes: Biomass from oil palm trees have important uses, but current uses are not always considered optimal by the palm industry. Key applications include empty fruit bunch (EFB) and fronds as mulch in plantations, liquid waste for biogas, PKM as mixture for fodder (for ruminants - cows) and other wastes for fertilizers. PalmTrack has published two posts on this—one on feed for dairy cattle, and the other on chicken feed.

  3. Weather and rainfall: On notable rainfall events (30 days to 11 Apr 2022), 30 days accumulated rainfall was est. above 300mm all across most of Borneo, South & Southeast Sulawesi, and smaller areas of central Peninsular Malaysia. The Australian BOM issued a weather project on 12 Apr 2022, with predictions that La Niña is expected to eventually return to neutral in the southern hemisphere in autumn or early winter.

  4. Tankers from Indonesia: Port calls for 28 Mar–13 Apr 2022 (14 days) count, c.60 palm-related tankers, with sample net tonnage c.330k (versus nearly two months ago, 14 days to 13 Mar, c.60 tankers with sample net tonnage c.297k). These two weeks (28 Mar–13 Apr), the share of port calls was higher for ASEAN (other than Malaysia and Singapore), CIS, and South Asian ports (versus 14 days to 13 Mar).

  5. Prices, projections, and policy jitters: Many in the palm oil world are familiar with the three Gurus of palm oil outlook: Fry (my ex-boss), Mielke, and Dorab. We covered their views (and that of others) from the big KL Price Outlook Conference (POC) 2022 powwow.

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!

$380.00
Every year
$38.00
Every month

PalmTrack—March 2022 Wrap Up

Here are the snippets of some of the news PalmTrack covered in March 2022:

  1. Cooking oil angst and Indonesia export policy flip-flop: Indonesia export rules have flip-flopped, with a new export restriction recently abandoned in favour for a higher export levy. Looking more recently (c. 15 March), cooking oil prices in Indonesia have not fallen and some shops have taken to limit purchases were to two litres per person to address supply concerns, with long queues for cooking oil across the country as stocks rapidly diminish. Over in Malaysia, there also some problems, with rationing of subsidised cooking oil and some empty shelves for these plastic-bagged cooking oil

  2. Update on the Sime Darby Plantations (SDP)-USCBP conundrum: CGS-CIMB reports that SDP is optimistic about the improvements the company has made with regard to its labour practices throughout its supply chain in Malaysia and is planning to submit an independent assessment report on these improvements to the US CBP by Mar 2022.

  3. Tankers from Indonesia: Port calls for 28 Feb–13 Mar 2022 (14 days) count, c.60 palm-related tankers, with sample net tonnage c.297k (versus nearly two months ago, 14 days to 23 Jan, c.60 tankers with sample net tonnage c.360k). These two weeks (28 Feb–13 Mar), the share of port calls was higher for CIS, European, and South Asian ports (versus 14 days to 9 Jan).

  4. Weather and rainfall: Australia’s BOM headlines “La Niña retreat stalls as trade winds strengthen” on 15 Mar 2022, but details that the event has passed its peak. On notable rainfall events (30 days to 13 Mar 2022), 30 days accumulated rainfall was est. above 300mm all across central and east Peninsular Malaysia, across the northern and eastern areas of Sumatra, Sarawak, north-east Sabah, and some eastern parts of Kalimantan.

  5. Iceland has announced a reversal of the supermarket chain’s removal of palm oil product (since 2018) amidst a shortage of sunflower oil. Citing it as an “unintended consequence of the [Russia-Ukraine] war,” CEO Richard Walker states that the move is only “a last resort and as a strictly temporary measure.” The U-turn comes amidst calls for urgent action in anticipation of rising food prices and shortages.

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!

$380.00
Every year
$38.00
Every month

[Sample!] PalmTrack—Iceland Announces Reversal on Palm Oil Ban

Iceland has announced a reversal of the supermarket chain’s removal of palm oil product (since 2018) amidst a shortage of sunflower oil. Citing it as an “unintended consequence of the [Russia-Ukraine] war,” CEO Richard Walker states that the move is only “a last resort and as a strictly temporary measure” and that only certified sustainable palm oil will be sold. In 2018, Iceland became the first major UK-based supermarket to pledge to remove all palm oil from its own-brand food and ran a Christmas advert in collaboration with Greenpeace featuring a cartoon orangutan fleeing from its rainforest habitat which was being destroyed by palm oil growers. The ad was later pulled for breaching political advertisement and communication rules.

Iceland’s U-turn comes amidst calls for urgent action by farmers in anticipation of rising food prices and shortages. In its letter to the government, the National Farmers’ Union warns that the country’s food security is at risk due to multiple reasons arising from the war in Ukraine, including labour costs. Ukraine accounts for 45% of the rapeseed and more than 25% of the maize imported into the UK, while 80% of its sunflower oil imports originate from the Black Sea region.

In its article A World That’s More Expensive Is Starting to Destroy Demand, Bloomberg writes: “Much like gasoline, demand for groceries in the developed world tends not to change much with price. Shoppers may change what they buy—ditching pricier items for cheaper substitutes—but they still have to buy. Yet restaurants find rising prices an obstacle as they try to rekindle business post-Covid. Gus Kassimis, owner of New York City-based Gemini Diner, customers are ordering fewer steaks and seafood, so he’s decreased his purchases from suppliers by about 10%. Gemini boosted menu prices once and is poised to do it again. ‘People are more cautious on what they spend,’ Kassimis said. ‘I don’t know how much more consumers are willing to take.’”

Intentions to shift source to responsible/sustainable/certified/renewables in many sectors may now be taking a back seat. We have been checking if Iceland is a member of the Roundtable on Sustainable Palm Oil (RSPO), and it is not currently so. Some think it used to be a member and left when it decided to stop using palm oil.

Notably, Iceland's affordable frozen foods might do well in under tougher economic circumstances, as it is a major supplier of "cheaper substitute" prepared/processed foods—refer to screenshot above of its homepage, which features GBP1/USD1.32 per unit frozen items and savings. Iceland brand frozen potato products cost about GBP0.8–1.4 per kg while its pizza and chicken products are about GBP3–6 per kg, priced below the likes of Young’s and Birds Eye.

research@segi-enam.com | 29 Mar 2022

For online view only. Please do not redistribute without our express permission. We offer subscription services for those who wish to do so.

Corporate Subscription (upcoming) offers more granular info-data details on product, trade and vessels mentioned in our reports.

10 a.m., 30 Mar 2021

Editor’s note: See also the rather scathing article on The Star by M.R. Chandran on what he dubbed the ‘Saga of Iceland Foods’, where he wrote:

Why does it always take war and the Russians to bring the West to its senses? United Kingdom food manufacturers have been warned that supplies of sunflower oil would run out in weeks as crops are trapped in Ukraine and Russia, who between them produce 70% of this stuff…

Things are becoming clear now to billions of people in the Third World that the powerful and rich are up to their necks with hypocrisy and choking on it. Imagine, war and armaments and hate and hypocrisy are not banned but a crop like oil palm can be?

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!

$380.00
Every year
$38.00
Every month

PalmTrack—Mid-Feb Update for the Week

In the last two weeks on PalmTrack, we covered:

  1. Indonesia’s expanded palm oil export permit: The world’s major palm oil exporter has extended its export permit requirement for palm oil product to include other derivatives. Previously only applicable to crude palm oil (CPO), olein, and used cooking oil, the change now means that CPO and its derivatives, crude palm oil and its derivatives, as well as palm kernel expellers will be subjected to the permit.

  2. USCBP findings on Sime Darby: The US CBP on 28 Jan reported that it has “found evidence of all 11 of the International Labour Organization’s forced labor indicators on the Da Wang vessel and Sime Darby Plantation’s palm oil plantations.” PalmTrack has have been closely updating on certified palm oil and find that key market players concur on these problems on supply in key products.

  3. Tankers from Indonesia: Port calls for 24 Jan–6 Feb 2022 (14 days) count, c.80 palm-related tankers, with sample net tonnage c.450k (versus 14D to 23 Jan, c.60 tankers with sample net tonnage c.360k). These two weeks (24 Jan–6 Feb) the share of calls was slightly higher for North Asian, European, and South Asian ports.

  4. Rainfall: 30 days rainfall was est. 100–150mm across central Peninsular Malaysia, and over 200mm above normal up in central area of Sumatra. Typical 30-days rainfall in Jan–Feb is 100–200mm on Sabah, Sarawak, south Sumatra, and across Kalimantan.

  5. Palm Biofuel - Part #2: Resuming our three-part series on palm biofuels, where in Part 1 we explored the USD billions involved and who is more or less committed to spending and paying, we have now turned to the shift to HVO-SAF, waste feedstock and about certification premia for Part 2.

  6. Whither PKE? PalmTrack’s analysis of palm kernel expeller (PKE) market shifts, which point to some struggle for this product.

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!

$380.00
Every year
$38.00
Every month