September 1, 2022

PalmTrack—Aug 2022 Wrap Up

September 1, 2022

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!

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July 31, 2022

PalmTrack—Jul 2022 Wrap Up

Segi Enam Research

July 31, 2022

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.

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July 22, 2021

Malaysia Downgraded to Worst Ranking in Human Trafficking Report

Segi Enam Research

July 22, 2021

Last Thursday, the US State Department released its annual Trafficking in Persons (TIP) Report 2021. The report evaluates a nation’s compliance with the standards as detailed in the Trafficking Victims Protection Act (TVPA) 2000.

Each country is then categorised into one of the four tiers: (1) Tier 1, nations whose governments fulfil the minimum standards under the TVPA 2000; (2) Tier 2, nations whose governments do not fulfil those minimum standards but are making significant efforts to do so; (3) Tier 2 Watch List, the same as Tier 2 but with either a significantly high/increasing number of estimated trafficking victims or a failure to provide evidence of increasing efforts to combat severe forms of human trafficking; (4) Tier 3, nations whose governments do not fulfil the minimum standards under the TVPA 2000 and are not putting significant effort to do so.

In the report, Malaysia has been downgraded from Tier 2 Watch List to Tier 3. One of the main reasons for the downgrade was that while the government has made some effort in 2020 to address trafficking issues raised that year, these efforts were ultimately hindered by, inter alia, the lack of cooperation between official agencies, inadequate avenues for victims to turn to for help, corruption, and the government’s continuous error of conflating human trafficking and migrant smuggling.

The Malaysian government has since responded to the report, promising to review recruitment fee agreements and levies as well as its memorandums of understanding with other countries to identify elements that would pose a risk of labour exploitation.

The downgrade has drawn justifiable concern from various parties, many of whom are calling the government to be more proactive. The Bar Council released a press statement detailing a list of proposals the government may undertake to combat human trafficking. The Human Rights Commissions (SUHAKAM) is urging the government to set up a Royal Commission of Inquiry (RCI) to implement the recommendations made in the TIP report. Even foreign agencies are taking special notice—the British High Commission recently called for project proposals to address the modern slavery problem in Malaysia. Response from the corporate sector suggests the sector is treating the report more cautiously, wary that its findings could have elements of a smear campaign.

Regardless, this downgrade may not come as a surprise to those who have been following the news on labour issues in Malaysia—in the past year alone, three Malaysian-based companies were issued Withhold Release Orders (WRO) by the US Customs and Border Protection (USCBP). These WROs, which prohibit the companies to import their goods into the States, were in response to allegations of forced labour, some of which were concerns raised by NGOs.