Sabah on the Eve of State Elections, 25 Sep 2020

Multiple parties and multi-cornered fights set the stage for the fight for Sabah with big personalities aiming to control the state.

A total of 447 candidates are vying for the 73 state assembly seats. Each seat sees a multiple fight with the least being three-corner while the Bengkoka seat in the Kudat parliamentary area has 11 candidates.

Parti Cinta Sabah, headed by Anifah Aman, is the only party to contest  all 73 state seats followed by Shafie Apdal’s Warisan Plus (61) (Warisan 46, Amanah 1, DAP 7 and  PKR 7), United Sabah National Organisation (47), LDP (46), BN (41), PN (29), Parti Gagasan Rakyat Sabah (28), Parti Perpaduan Rakyat Sabah (24), PBS (22) and Upko (12).

Early favourites and incumbent, Warisan-Plus along with Upko are touting a theme of unity with an emphasis on protecting Sabah's interest and defending the rights of the people. Shafie had dissolved the state government to foil an attempt by former chief minister Musa Aman to replace him by engineering a crossover of assemblymen. (Post 2018 General Election, Shafie managed to form the state government when six BN assemblymen crossed over). 

The other favourite is Gabungan Rakyat Sabah (GRS) which is a combination of Perikatan Nasional-BN-Parti Bersatu Sabah. Prime Minister Muhyiddin Yassin has been dangling sweet carrots of development provided being voted into power. Early this week, he announced a new economic stimulus package, Kita Prihatin, which includes financial assistance for the middle income group, and the bottom 40 percent wage earners.

This is a battle of warlords where personalities and ethnic groups and family allegiance hold more clout over loyalty to the party. While there is a sense of acceptance and unity among the people, the lines are clear when election rolls around. A candidate could switch parties and still be voted in as shown repeatedly by the likes of Jeffrey Kitingan of STAR.

Issues for Sabah have remained the same, of bread and butter, development, infrastructure and the Malaysia Agreement 1963 (MA63). It is one of the poorest states in the country despite having resources such as oil and gas, and palm oil. According to the department of statistics (DOSM), the absolute poverty rate in Sabah is at 20% in 2019 as compared to 6% for Malaysia on the whole. The T20 in Sabah has a bigger share of the income share at 46.2% as compared to the B40 at 16.3%.

In terms of telecommunications, the state has the lowest broadband penetration in the country at 81% per 100 inhabitants as of 1Q2019. The issue came to the fore when university student Veveonah Mosibin had to get onto a tree to receive a signal for her phone in order to sit for her exam during the lockdown.

Other concerns include Tanjung Aru Eco Development, Papar Dam project, Kalabakan deforestation and Balambangan silica mining. 

Illegal or undocumented immigrants remained another issue for the state but has not been hotly debated. It bears no benefits for either side to stir up the issue as the support from the Kadazandusun community is crucial. Back in 2019, the then PH government, which Warisan was part of, embarked on a plan to register undocumented migrants which received a lot of opposition from the Kadazandusun community. The BN government in the 1990s were accused of Project IC with an influx of illegal immigrants which displaced the Christian Kadazandusun from power. 

An estimated 250,000 Sabahan reside and work in Peninsular Malaysia. State or by-election generally does not see many making the trip home to cast their votes unlike in a General Election. This time around, the sentiment is that those elected in are expected to switch sides post-election hence there is little motivation to head home to cast their votes. There is also a reluctance to travel to Sabah which is a hotspot of Covid-19 presently with eight clusters.

The race remains tight on the eve of the election but none of the parties helmed by big names could claim advantage over the other. More horse trading is to be expected post-election where new alignments would form a coalition to rule the state.

Credit: Khor Reports PolTRACK team

(c) Khor Reports - Segi Enam Advisors Pte Ltd. 2020. All rights reserved.

Much Ado about Something: The India-Malaysia Palm Kerfuffle

There has been significant noise between India and Malaysia about palm oil. This was apparently triggered by comments about Kashmir’s status at the United Nations General Assembly in September 2019 by Prime Minister Mahathir Mohamad (selected as the key teaspoon-a-day Malaysia palm oil advocate).

In the era of trade wars, specialists point to the ‘weaponisation’ of several commodity trades as a result of geopolitical issues emanating from the US-China trade war. In this case, sensitivities in India grew and reached a level that the Solvent Extractor’s Association, the key vegetable oil refiners association, issued a statement on 21 October 2019, urging its members to avoid Malaysia palm oil in solidarity with national issues.

New Delhi officials have denied any negative trade policy. Observers tell of Malaysia officialdom being more concerned about the trade balance and the fact that Malaysia is exploring buying more India buffalo meat and sugar to improve the negative trade balance with India.

But words keep flying. Bilateral issues include the extradition of wanted preacher Zakir Naik, a cause célèbre resident in Malaysia, as well as criticism of India’s new nationality rules.

To be sure, India needs palm oil, or other imported vegetable oils but none is so well priced, on average. So it may all seem a storm in a teacup while palm prices ramp up. Reuters reported an ongoing trade but at a discount to Indonesia palm oil prices. Usually, Malaysia palm oil trades at USD 15-20/tonne premium to Indonesia (largely on logistics), but a USD 5/tonne discount helped things along. This indicates a negative (relative) swing of USD 20/tonne or more at one point.

Malaysia palm producers could take this in their stride. They must be pleased that, despite such talk from its biggest buyer—on top of negative headlines about the palm trade outlook with the EU—the price of crude palm oil has been on a tear, rising from a low of about USD 450 (at mid-2019) to USD 750/tonne, a three year high. But watch out for how long its competitive position against other oils and its use in biodiesel are eroded.

Khor Reports stands by for this (already, India is cutting import taxes) and for possibly more geopolitical word parrying. In the meantime, we highlight eight major points and issues about the palm oil trade, the trade context, and our online-social media reading of the Malaysia palm oil flap in India!

Quick facts about palm oil exports to India

(Note: Trade figures rely on an export-basis reporting unless stated otherwise.)

#1 Indonesia dominates as India’s largest source of palm oils.

It supplies 60% of India’s total palm oil (crude and refined) needs in the last five years; Malaysia has a 38% market share. In 2018 alone, India imported 6.0 million tonnes of palm oil worth USD 5.5 billion, with Indonesia selling USD 3.8 billion and Malaysia selling USD 1.3 billion worth. For palm kernel oil (crude and refined), Indonesia is (again!) the majority supplier to India. With a 66% share in 2018, Indonesia sold USD 487 million worth, while Malaysia sold USD 243 million.

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#2 India is (by far) Malaysia’s largest buyer of palm oil.

In the last five years, just over 20% of Malaysian palm oil went to India (tan-coloured wedge, below). The next biggest importers of Malaysian palm oil were China, Netherlands, Pakistan, Vietnam, USA, Japan, and the Philippines.

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#3 Recent monthly data shows a boom in Malaysia refined palm exports to India.

Looking at monthly data for the Malaysia-India palm trade from June 2018 to June 2019, the value of the trade in crude palm oil (blue line, below) was relatively stable, with slight dips in February 2019 and June 2019.

The value of refined palm oil imports (red line) was about USD 25 million or much lower each month, and started to spike up after January 2019, reaching USD 200 million in February and May 2019. Palm kernel oil product imports (yellow and green lines) were relatively small throughout. 

#4 But Malaysia has lost a million tonnes of volume in India, 2014 to 2018.

However, the more recent rise of Malaysia exports is in the context of declining volume to India. Malaysia palm oil exports have fallen from over 3 million tonnes in 2014 and even higher in 2015 to around 2 million tonnes in 2017 and 2018. This is a major drop of 1 million tonnes by 2018. But look at the pick up in 2019 that so worried India refiners (look out for our future articles or ask us about this!).

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It appears Malaysia was trying to claw back market tonnage with the Malaysia-India Comprehensive Economic Cooperative Agreement (CECA; reduced import duties on Malaysian palm products came into effect in January 2019), but it was flummoxed by the 5% safeguard duty (imposed in September 2019); the more recent trader tensions raise many further questions.  

Overall INdia-Malaysia Trade relationship

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#5 India has a large (but narrowing) trade deficit with Malaysia.

Looking at overall trade relations, India has a trade deficit with Malaysia. This deficit was USD 6.3 billion in 2014, and it has been slowly declining (improving), with a deficit of USD 3.9 billion in 2018.

#6 India’s top trade items include fuel and palm oils, buffalo meat and more.

In 2018, India’s top imports from Malaysia included mineral fuels and oils (USD 2.8 billion), animal and vegetable oils (USD 1.4 billion), electrical machinery (USD 1.1 billion), machinery (USD 753 million), copper products (USD 599 million).

Meanwhile, India’s top exports to Malaysia in the same year are mineral fuels and oils (USD 2.4 billion), aluminium (USD 836 million), organic chemicals (USD 561 million), meat (USD 395 million) and machinery (USD 276 million).

India Public interest & SOCIAL MEDIA

#7 Late Sep and Oct 2019, India social media was a flutter.

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#BoycottMalaysia garnered about 20,000 mentions in a month and palm oil—usually such a staid topic limited to the professional sphere—boomed with about 25,000 mentions; since the Kashmir controversy, it has attracted 80% higher interest in India social media than before in 2019 (note that these statistics are for a key segment in social media, but is not a full count, so there is likely even more mentions elsewhere). Top topics linked to palm oil include boycott, Kashmir and Mahathir.

For some reason, #BoycottMalaysia and ‘palm oil health’ (brown and pink lines) peaked at the end for September 2019 before another (slightly bigger) peak of social media mentions of palm oil and Kashmir and Mahathir (orange and purple lines) in mid-late October 2019. Social media indicators precede an awakening of public interest online (see #8). Fortunately, while there are India media articles that use negative words - like ‘disgusting’ and ‘toxic’ - they do not turn up in social listening indicators.

#8 Palm oil has broken out of a 2015-2018 lull in India online interest.

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While Indonesia palm oil dominates the trade, it has done so pretty quietly (light green line). Malaysia palm oil (mid green line) attracts much more India public interest, while its volume has been struggling there. However, the highest is ‘palm oil India’ (dark green line), a topic we intend to explore later (note: there are incentives to plant oil palm in India). A low simmering topic is palm oil and health (pink line). The boycott topic (lighter orange line) is less prominent (in non-social media) online and should definitely be tracked via social media listening (see #7).

KHOR Yu Leng, 2 Jan 2020

Smoke Gets in My Eyes: The Case of Air Pollution in Cinta Sayang

Something smells in Cinta Sayang. Reeking of smoke, the air in the morning of 28 June 2019 at the quiet Sungai Petani town reportedly registered a “hazardous” Air Pollutant Index (API) of 395 on the PM2.5 scale on a local resident’s handheld air quality monitoring device (Interestingly, official data shows a 67 API reading Sungai Petani). As a comparison, the worst hit area in Malaysia during the 2019 haze was Sri Aman in Sarawak (East Malaysia), which recorded an API reading of 367 on 17 September. 

The locations and time-frames (the official reading averages things out) may differ; and the handheld reading was recorded at 6.35 a.m. at an industrial area near the Cinta Sayang Resort. Nevertheless, our curiosity was piqued when we got a wind of this. So here's a preliminary review on the smoky problem.

The culprit of the toxic fumes in Cinta Sayang is allegedly a factory operating in the nearby Kampung Serukam area. Locals point out that waste plastic burning activities were carried out in the cover of night. The air pollution was so bad, it has affected not only Cinta Sayang, but also surrounding Sungai Petani residential areas including Bandar Puteri Jaya, Bandar Astana, Bandar Seri Astana, and Taman Cendana. School children are pictured walking about in (questionably effective) surgical masks. All these alerts have circulated in social media, raising alarm beyond the community feeling under siege. 

A quick search shows that plastic waste burning is not an occurrence unique to Sungai Petani. Reports of similar incidents are splattered across Malaysia, from Bukit Mertajam, Penang to Ipoh, Perak to Kuala Langat, Selangor. And like Cinta Sayang, most, if not all, of these incidents are attributed to factories burning plastic out in the open—news reports and witness accounts oftentimes point out that such factories operated illegally, despite the numerous complaints by local residents and crackdowns by the authorities. 

(Jenjarom is another notable location where the dumping and burning of waste plastics is just as serious, with 17,000 tonnes of waste found to have been processed, dumped, and burnt in the open in the wee hours by recycling factories operating illegally in the area.)

Locations of areas affected by waste plastic burning as mentioned in above.

Source: Free Malaysia Today

Health-wise, the damage of air pollution caused by burning plastic waste is concerning. A study by Berkeley Earth has shown that one cigarette per day (24 hours) is about the equivalent of a PM2.5 level of 22 μg/m3 for one day. Recall that in the case of Cinta Sayang, the air in the morning of 28 June 2019 was recorded a PM2.5 level of 395 μg/m3. If this lasted an hour, every person in Cinta Sayang could have been inhaling, at worst, up to 18 cigarettes; and if this lasted half an hour it may have been equivalent to 9 cigarettes. A relevant news article carries a screenshot from a private air pollution meter.

To put this a health perspective, smoking a cigarette a day puts male smokers at a 48% higher risk of heart disease compared to their non-smoker counterparts; for female smokers, the risk is 57%.

Could waste plastic burners be inflicting several cigarettes equivalent on local residents? This is only an estimate for a single day in Sungai Petani. According to the Consumers’ Association of Penang (CAP), the problem has been ongoing for more than a year. Environmental activists claim that Cinta Sayang is still frequently recording dangerous levels of air pollution, with API readings varying between 120 to 150 in early November.

So, this preliminary review of the troubling waste plastic cum air pollution problem points to significant angst and health concerns for Cinta Sayang. For the next step, we hope to speak to those on the ground to get a more complete picture of the situation in the Kedah-ian Town. 

“Broken” aims to expose corrupt and unethical conduct lurking in major consumer industries.

There are other sites of concern. Jenjarom and Port Klang in Selangor are featured in the first episode in a Netflix docuseries called “Broken”. News alerts point to more. What do community activists across Malaysia rate prospects for a resolution of their local waste plastics pollution problem? What do they think of Pakatan Harapan's plans to regulate waste plastic imports (at a larger volume) and build big incinerators?

Read about our review of waste plastic imports here.

Knives Out? A Nibble on Food and Diet Habits

How are professionals in KL, Singapore (and some in Jakarta) thinking about diets? We reached out and got 100 responses from the Khor Reports network and their friends (with 47 in the 26-35 year old range, 36 with postgrad degrees, and 65 were women).

Recently, 52 were on low-carb, 43 on plant-based/vegetarian (1) plus three on vegan, 39 on intermittent fast, 16 on low-fat, 31 on others (niche) diets, and four on no diet (note: these numbers won't total 100 as some are on multiple diets). Notably, 60 were following at least one diet four to seven days per week in the last month.

What do younger professionals tell us? Its rangey. Khor Reports spoke to some on plant-based diets for four days per week, and those turning vegan. Others say they still need meat to feel satiated, but diets are definitely the trend.

Netflix has had a major influence with docu-series "Rotten" on bad behaviour food supplychains and even more the splashy-controversial "The Game Changers" on the health benefits (even for sex?!) of skipping meat. This movie-length documentary has a dozen executive producers, including James Cameron, Arnold Schwarzenegger, and Jackie Chan.

So climate change may not be front of mind here (a laggard climate rebellion zone), but this is what faux meat makers are counting on for a bigger market. There is doubt about the taste and price point of Beyond Burger and Impossible Burger. Some ask why ultra processed (a newer question on more and more lips, as “clean labels” are the trend) and (the traditional) questions arise about the presentation of veg as meat (recall that ethnic Chinese and Buddhist segments are quite familiar with fake meats, including from Taiwan for decades now).

Climate-damaging diets may be a rising concern over time. Palm oil has its detractors for nigh on 20 years now on this issue, but it is the meat (especially beef) sector that is garnering a lot of attention nowadays. The latest buzz words in food sector: plant-based, clean meat, clean label, and sustainable.

The launch of plant-based products is the latest thing and there is good awareness of lower footprint proteins, so beef is getting into a worry zone. UK farmers are tussling with a BBC documentary, “Meat: A threat to our planet?”

In a chat with grain experts we mused that plant-based may take a 8-15 percent market share. Look at the Rebel Whopper, a burger with 0% beef from Burger King using patties from Unilever’s The Vegetarian Butcher unit (see ad image). The fast food chain also uses meat substitutes from Impossible Meat (its share price is on a roller coaster ride) and Beyond Burger; and recently attribute stronger sales growth to its new plant based products.

Results from 100 respondents

Khor Reports’ mini poll found keen respondents for its question on diets, and it’s notable that plant-based/vegetarian and vegan was almost as popular with this group as low-carb, and intermittent fast came a close third, and low fat was a distant fourth. No diet was notably low! Other diets include more niche ones such as the ketogenic diet (keto), the paleolithic diet (paleo), the mediterranean diet, the gluten-free/lactose-free diet, and the fish-based diet.

The poll was conducted from 1 December 2019 to 9 December 2019. We focused on reaching out to more millennials and Gen-Zs, and achieved half of respondents in this range, i.e. 35 years old and below, and more than half were women. An overwhelming number of respondents have completed their tertiary education—56% of respondents obtained an undergraduate degree just over a third went on to finish a postgraduate course. So this is a rather niche segment of consumers!

Diets are not the only health-conscious effort people are making. Especially popular among younger professionals, we hear anecdotes of various exercise routines, such as the high intensity interval training (HIIT).

Here are what some of our respondents have to say about the diet trend:

“I think that diet crazes have subsided slightly last few years and people are tending towards just trying to be healthy as opposed to trying to shed weight fast. Trending against eating meat.”

“There's low awareness on the pros and cons about each diet, and the purpose of the diet. There's also low awareness on making that chosen diet sustainable.”

“More information out there in the market now about what is healthy and not so it’s easier to make informed decisions rather than following fads.”

Honing in on the plant-based/vegetarian/vegan segment

This group of 43 respondents is younger, more female and a bit more dedicated (on days per week count) than the wider group of 100. Almost half were from the media, market research, consulting and professional service economic sectors.

While there are a handful who practice just a vegetarian/plant-based or vegan diet, many claim that they combine their plant-based/vegetarian/vegan regiments with other types of eating habits, such as a keto diet, a paleo diet, and intermittent fasting.

Most appear to adopt their current eating lifestyle due to health reasons, with one respondent citing personal health and an interest in reducing GHG. Only a few referred to the environment and climate change as their primary motivations. In total, 3 respondents (7% of this segment) specifically mentioned an environmental issue or concern in their comments. Perhaps diet is not a key way this group expresses its climate concerns.

Several of our plant-based/vegetarian/vegan respondents left interesting comments:

“Diets have been traditionally quite hard to stick to for me! My efforts to avoid certain foods through a Keto or low carb diet have always ended in disaster ‘cause I'm not able to resist or overcome my cravings. But Game Changers on Netflix has proved to be the most effective way to change my eating habits. I love meat but the content of that documentary has somehow made it easier for me to opt for or seek out more plant based options, without a feeling of deprivation building up. Maybe ‘cause I still get to eat sugar and carbs.”

“There seems to be a trend to be vegetarian, or to practice 'meatless Mondays' within the environmentally conscious millennial community.”

“The main difference I found with plant-based diet is that I heal from inflammation faster. My hormone cycle is more regular. However, this diet requires meticulous research and planning to acquire that balance and sufficient nutrition that is required by the body to function normally.”

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Footnote

1. There are 14 responses that said they practice both vegetarian and plant-based diets. A vegetarian diet generally means abstaining from meat, fish, or poultry. A plant-based diet typically consists of mostly whole grains, fresh fruits and vegetables, legumes, unsalted nuts, and healthy oils. While meat, fish and/or poultry are still included in the diet, they make up much smaller portions of the diet.

https://www.kidney.org/atoz/content/plant-based-diet-or-vegetarian-diet-difference

Boba Boom: The Rise of Boba and the Sugar Strikes Back

There has recently been a proliferation of bubble tea establishments across Malaysia and we wanted to find out what the hype is all about. Boba has a number of monikers — bubble tea, milk tea, pearl milk tea. It is a Taiwanese drink that commonly features a base made from tea and milk with chewy tapioca pearls at the bottom of the cup. There are also other variants popping up with coffee and fruit.

According to a report by Allied Market Research, the global bubble tea market was valued at USD 1,957 million in 2016, and is projected to reach USD 3,214 million by 2023, with a CAGR of 7.40% from 2017 to 2023. Khor Reports has consolidated data on bubble tea locations in a dashboard. This provides an overall view of popular bubble tea establishments across Malaysia. The data is as of 15 October 2019.

With the advent of mandatory nutrition labels and an advertising ban for high sugar and pre-packaged drinks in Singapore, the research team at Khor Reports could not help but wonder how much sugar we may be consuming in a serving of bubble tea. We found that consuming a 500ml drink of bubble tea at 100% sugar level was equivalent to drinking three cans of Coca Cola; which exceeds the daily recommended sugar intake for adults by 205% (in Malaysia) and 293% (in the United Kingdom). 

But, bubble teas are not the only beverage you should worry about in terms of teaspoons of sugar. The amount of sugar (per 100ml) in a Coca Cola was equivalent to that of a teh tarik. Freshly squeezed apple juice may have a sugar content (per 100 ml) 28.6% higher than in a soda! To be sure a fruit juice and soda have different chemistry and other attributes. 

Moving forward, we may need to be more mindful of our drink choices. Opt for healthier drinks with less or no sugar. Eat whole fruits instead of juices. Customise your bubble tea with lower sugar levels. Simple requests such as ‘kurang manis, bos’ or ‘pearl milk tea, less ice, less sugar,’ may just help to keep health risks at bay while enjoying an occasional treat.

More details are available on a customised basis; including additional data fields. Please contact us to find out more. 

Maps and datasets were assisted by Nadirah Sharif and Loh Rachel of Khor Reports; together with Wong Ivan, our foodie specialist. 

#RethinkOurDrink #BubbleTea #Boba #Sugar #Malaysia 

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Data-info addendum by the Khor Reports Boba Ops, 11 Nov 2019

Ed by Wong Ivan:

The bubble tea, or more specifically brown sugar milk tea, craze seems to be slowly dying down as there are lesser crowds lining up at shops. The reason behind this could be that there are too many brands selling the same product in the same area. However, the branches in shopping malls still have a consistent flow of customers. Queues at Chatime and Tealive are also still going strong as they have many ongoing promotions, which makes them cheaper alternatives for consumers.

Also, Xing Fu Tang is currently embroiled in a bitter dispute with its Taiwan Headquarters which resulted in two branches (SS15 & Sri Petaling) being defaced with red paint thrown onto their front doors. More information can be found here.

Japanese Shaved Ice (Kakigori) popularity seems to rising as they are popping up in many major hangout spots.

(c) Khor Reports - Segi Enam Advisors Pte Ltd. 2019. All rights reserved.