Archive For: MPOA News

French parliament scraps planned extra tax on palm oil

French parliament scraps planned extra tax on palm oil

PARIS: France’s National Assembly has scrapped plans for an additional tax on palm oil, which had caused outcry among major producers, after the government put forward an alternative proposal that would include other vegetable oils used in food.

Indonesia and Malaysia, the world’s two largest producers, had said the plan, which was aimed at encouraging the sector to reduce the environmental damage palm oil plantations could cause, was discriminatory and broke international trade rules.

The Malaysian Palm Oil Council representing local producers, which had also claimed the tax would put thousands of small farmers out of work, welcomed the National Assembly’s decision.

“The French government should drop once and for all this unfair and unjust tax campaign against palm oil,” it said.

Palm oil is one of the least taxed vegetable oils in France and the government proposed a last-minute amendment on Wednesday, which says the state will put forward a new scheme to harmonise taxes on such oils and include an exemption for those that are sustainably produced based on “objective criteria”, within six months after a wider biodiversity law is enacted.

Legal uncertainty around the tax, which focused on only one type of vegetable oil and contained a tax exemption based on sustainability criteria that were not clearly identified, had prompted the change, France’s Secretary of State for Biodiversity Barbara Pompili told Parliament.

“There is no question to stigmatise one or another country, we are here to find long-term rules that favour sustainable development by helping as much as we can to certify sectors from other countries,” she told the National Assembly.

The proposal has been going back and forth between the French National Assembly and the Senate, but it is the National Assembly which has the final word.

France’s initial proposal had been softened by the National Assembly in March by excluding sustainable palm oil and sharply reducing the amount of the levy.

But the biodiversity bill in which the tax was included did not pass through the Senate, forcing the two assemblies to find an agreement. The meeting ended in a deadlock.

This is not the first attempt by French lawmakers to impose a tax on palm oil which campaigners say contributes to deforestation and impacts biodiversity. The first one, in 2012, suggested to quadruple the tax on palm oil.

Attempts had failed mainly due to strong lobbying from producing countries. – Reuters

 

Source : The Star, 23 Jun 2016

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Palm oil prices likely to get a boost

Palm oil prices likely to get a boost

PETALING JAYA: Falling crude palm oil (CPO) stockpile in the country, which hit a five-year low in May, will boost prices of the commodity in the short term, but analysts say the impact on planters’ earnings will be harder to predict given the recent weak production numbers.

“It is still premature to expect a steep recovery in second quarter 2016 earnings versus full-year forecasts due to low second quarter 2016 output,” Maybank Kim Eng said in a report yesterday.

Malaysia May stockpile hit a 62-month low at 1.65 million tonnes, driven by low fresh fruit bunch yields on lagged effect of drought last year.

Analysts expect inventories to fall further this month.

“We expect CPO price to hit fresh highs of RM2,800-RM2,900 a tonne in June/July 2016 following the low stockpile before CPO price starts to retrace when output picks up from August,” it said.

The average CPO price for the first five months this year improved 15% year-on-year (y-o-y), but this was insufficient to offset the 17% yoy drop in output from the Malaysian estates over the same period, CIMB Research said in its report.

“We expect CPO prices to trade in the range of RM2,500-RM2,800 per tonne in June 2016 and average RM2,450 per tonne in 2016 and RM2,600 in 2017, maintaining our ‘neutral’ sector rating,” it said.

According to Bloomberg data, CPO prices have dropped 9% from a high of RM2,779 in March, but is up 1.8% for the year at RM2,530 a tonne.

CIMB Research said the main bullish factors for prices were risk of lower palm oil supplies due to El Niño as well as potential La Nina, lower soybean supplies due to weather disruption, and higher biodiesel mandates in Indonesia and Malaysia.

“Factors capping the CPO price upside currently are release of rapeseed oil stocks by the Chinese government, competition from soybean oil, and slower global economic growth,” it said.

Meanwhile, UOB Kay Hian Research said that CPO prices should strengthen again only in late the late third quarter this year as the recovery in CPO production will not be as strong as market’s expectations.

Meanwhile, Kenanga Research said that June 2016 exports would strengthen 4% to 1.33 million tonnes, driven by stronger Indian demand and flat demand in the remaining key markets.

The research house said India remained a bright spot with year-to-date exports coming in 88% above the eight-year average and 12% above May 2015 year-to-date exports.

“In June 2016, we expect this trend to continue, with below-average demand seen in all key markets except India,” it said.

For the first five months this year palm oil exports were flat, while exports to China registered a sharp drop of 50.7% year-on-year, UOB Kay Hian Research said.

This is probably due to high influx of soybean into China’s market as the strong demand for animal feed has led to a higher crush volume and higher production of soybean oil, it said.

“The increase of soybean oil in the market would reduce the demand of palm oil,” the research house said.

On top of this, the price discount between palm oil and soybean oil has narrowed to US$85 per tonne in May 2016, from a historical average of US$140 per tonne, making palm oil less competitive.

It expected crude palm oil prices to trade in the range of RM2,400 to RM2,800 per tonne in the second half this year after suffering a drop of 1.1% month-on-month on May 16 due to the expectation of a production recovery and concerns over weaker demand from India and China.

 

Source : The Star, 14 June 2016

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B10 mandate a small but good move for the sector

B10 mandate a small but good move for the sector

KUCHING: Analysts at Public Investment Bank Bhd (PublicInvest Research) laud Malaysia’s move to raise the biodiesel mandate for transport sector from B7 to B10 effective June 2, in addition to introducing the B7 biodiesel programme for the industrial sector.

Both B10 and B7 programme will collectively use up 709,000 of crude palm oil (CPO) domestically, it said, while diesel demand will reduce by 820 litres and carbon dioxide by 2.16 million per year.

“We laud the long-waiting move – which has been delayed for almost two years – which will help improve the domestic palm oil consumption,” the analyst said in a note yesterday.

“We remain positive on CPO’s outlook with an average CPO price forecast of RM2,500 per metric tonne for 2016 and RM2,600 per metric tonne for 2017.

To note, the government will increase the blending of palm methyl from seven per cent (B7) to 10 per cent (B10) with 90 per cent petroleum diesel for the transport sector while industrial sector will adopt a seven per cent mandate for palm methyl ester or B7.

“Both B10 and B7 programmes will collectively consume an annual CPO of 709,000 metric tonnes or 3.5 per cent of annual CPO production, which is relatively small,” he added. “Nevertheless, it is still a good move for the Malaysia as we are far lagging behind Indonesia, which has adopted B20 this year.

“Benefitting those plantation players with biodiesel facilities. Both programmes not only help reduce the national palm oil inventory levels, it also benefits some plantation players, namely, FGV, Genting Plantations and Sime Darby, who have ventured into biodiesel production.”

Due to the weak crude oil prices, PublicInvest Research noted that demand for biodiesel has been lacklustre over the last couple of years.

The new mandate, it said, will certainly give the local biodiesel demand a boost.

Looking at CPO exports, Malaysia’s CPO exports in May climbed 15 per cent from a month earlier, according to the cargo surveyor Societe Generale de Surveillance. Inventories might inch further downwards from the April’s level of 1.8 million metric tonnes.

“The lower palm oil inventory will provide support to the CPO prices, which have been hovering around RM2,500 to RM2,700 per metric tonne levels,” it added.

“It was another disappointing quarter for the plantation sector as majority of the results came in below expectations. Nevertheless, we opine that further downside risk is limited as CPO prices have moved up further while production is recovering albeit slowly.”

During the quarter, the firm saw that the sector was negatively impacted by weaker-than-expected production — due to extreme dry weather pattern in Indonesia and Malaysia — and higher operating costs due to lower productivity.

Source: http://www.theborneopost.com/2016/06/03/b10-mandate-a-small-but-good-move-for-the-sector/#ixzz4AUMpKpip

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Palm oil tax an unhealthy move

Palm oil tax an unhealthy move

IN early May, senators in the French Parlia­ment discussed a proposed Bill on biodiversity, nature and landscapes – commonly known as the Biodiversity Bill.

Although the text is lengthy, the Bill is still a clear demonstration of the common will of the French Parliament to put the debate on biodiversity on the right track. Like many others, I clearly support the stated intention of this Bill.

However, there is a critical part of the Bill that is directly linked to my professional expertise, and which is therefore puzzling to me.

As the parliamentary game of back-and-forth progressed, with discussions and amendments in both Houses, an additional tax on palm oil made its way into the National Assembly version of the Bill. This tax was put forward by MPs, based at least in part by allegations about palm oil’s effects on health.

For me, as a nutritionist, it is clear that the health allegations made against palm oil, voiced as justification for the tax, are nonsense.

It’s very important, first of all, to understand why palm oil is widely used in food products. The choice of a vegetable fat or vegetable oil by the food industry is often directly linked to the manufacturing and functional properties of a particular ingredient compared to competing oils or fats.

Food manufacturers that use palm oil as an ingredient do so for the same reasons, one of which is that palm oil has an important “technical” benefit compared to other vegetable oils – it is naturally semi-solid.

This means that palm oil can be added to food products without requiring partial hydrogenation – an industrial process that is instead needed to “harden” softer oils, and in so doing creating so-called “partially hydrogenated oils”.

Partially hydrogenated oils are very unhealthy, as they contain trans fatty acids (known as trans fats), whose harmful effects have been recognised unanimously by the scientific community.

Many countries have decided to ban trans fats in food products altogether, but neither France nor the European Union has taken any action thus far.

Palm oil, because of its natural state, does not require this industrial process of partial hydrogenation – and therefore palm oil never has trans fats. This is a major reason why the use of palm oil in food products has risen, not just in France, but also around the world.

Understanding this fact is fundamental to understanding why palm oil’s use is rising.

Palm oil is a healthy vegetable oil, naturally made up of 50% saturated and 50% unsaturated fatty acids. This balance, added to the total lack of trans fats, explains why palm oil is so popular and so widely used.

For some, this increase in palm oil use is seen as a problem. However, studies clearly show that French consumers actually consume very little palm oil.

It’s true that palm oil is found in many products, but it is present only in small quantities. This research has been conclusively published by the French agency for Food, Environmental and Occupational Health and Safety (Anses) in France.

The level of palm oil consumption, therefore, should not be a matter of concern at all. In fact, it seems that the palm oil tax is based on multiple, unfounded, fears.

If a tax is to be introduced – which is really not justifiable, especially when looking at the failed Danish experience with a “fat tax” – I believe it would be wiser to apply it to trans fats whose impact on public health is unde­­niable, and globally-recognised.

The problem with taxes based on fear and misunderstanding is that they can often have unintended negative consequences.

First, a tax on palm oil could lead to unhealthy alternatives – such as trans fats – being used in higher quantities in food in France. That is a bad outcome.

Second, a tax on palm oil would, as a direct result, raise prices for food products.

Yet we know that eating well is often a matter of available budget. The least fortunate families are also those that consume manufactured food products the most.

So, taxing palm oil will lead to higher prices for people buying food. That is also a very bad outcome.

As a nutritionist – not a politician – my message to the Members of the French Parliament is simple: when you evaluate this biodiversity bill project, take into account the harmful effects of your decision, both on public health and on the cost of living. The tax should be scrapped.

  • Anne-Laure Meunier is a dietitian-nutritionist and a teacher at the Cours Diderot and EDNH (School of Dietetics and Human Nutrition) of Paris, a specialist in palm oil’s nutritional values. She is co-author of the book Power, Nutrition & Dietspublished by Studyrama editions.

 

Source : The Star, 30th May, 2016

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Four sectors allowed to hire foreign workers

Four sectors allowed to hire foreign workers

KUALA LUMPUR: The Cabinet is lifting the freeze on hiring foreign workers for four sectors, says Transport Minister Datuk Seri Liow Tiong Lai.

The decision was made in light of appeals from the manufacturing, construction, plantation and furniture-making industries, which are facing a major shortage of workers.

“In view of the acute shortage, we have to lift the suspension to allow these sectors to bring in foreign workers,” said Liow.

However, he said that the Cabinet was already looking to improve the system for hiring foreign workers, after which they would gradually lift the hiring freeze for other sectors too.

“On other sectors, we will go on a case-by-case basis, while waiting for the creation of a more foolproof, transparent and accountable system,” he added.

“Workers are important for the productivity of these sectors, so if employers face too many uncertainties in hiring workers, that will not go well for the nation’s economic growth,” he said.

Liow added that it would take time for the Government to engage with the various industries to better understand the situations that each sector faced.

However, he emphasised that it was important for the Government to regulate and have proper control over the hiring of foreign workers in Malaysia.

The Star reported recently that a survey by the Federation of Malaysian Manufacturers showed that 84% of manufacturers were facing a labour shortage, with half of them claiming that they had not been able to fulfil existing orders.

The survey showed 146 companies required 13,270 new workers this year to meet their business needs and replace unfit or returning workers.

Minister in the Prime Minister’s Department Datuk Seri Dr Wee Ka Siong said the illegal foreign workers’ rehiring programme must be made more efficient to assist manufacturers, who were facing a manpower shortage due to the freeze on foreign workers since February.

Only 55,000 illegals have been rehired so far, out of the estimated 1.4 million said to be in the country.

Late last month, Deputy Prime Minister Datuk Seri Dr Ahmad Zahid Hamidi said that a decision on the freeze on foreign labour would be announced soon.

 

 

Source : The Star, 12th May 2016

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Malaysian palm price falls to near 2-month low on declining export demand

Malaysian palm price falls to near 2-month low on declining export demand

KUALA LUMPUR: Malaysian palm oil futures fell to a near two-month low on Tuesday, as poor demand for palm oil shipments weighed down the market.

The palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange fell 2.1 percent to 2,539 ringgit ($647) per tonne at the close of trade, marking the fourth consecutive session of declines. It hit an intraday low of 2,537 ringgit per tonne, the lowest since March 9.

Traded volumes were 51,744 lots of 25 tonnes each, higher than a 2015 daily average of 44,600.

Cargo surveyors Intertek Testing Services and Societe Generale de Surveillance showed on Tuesday that palm oil shipments for the full month of April declined between 5 percent and 7 percent from March, as exports to major buyers Europe, China and India all fell.

“Exports are still not good, and production is still doing alright, we believe it (April production) is close to double digit growth,” said a palm oil trader based in Kuala Lumpur.

“May exports could be better as (benchmark) prices drop or hover around current levels this month.”

April production in Malaysia, the world’s second-largest palm grower, is seen rising in line with the seasonal trend from the 1.2 million tonnes produced in March. <MYPOMP-CPOTT> This would contribute to higher inventory levels, likely pushing down benchmark prices of the tropical oil. <MYPOMS-TPO>

Palm oil may break a support at 2,546 ringgit per tonne and fall more into a range of 2,505-2,530 ringgit, according to technical analysis by Wang Tao, a Reuters market analyst for commodities and energy technicals.

In competing oils, the September soybean oil contract  on the Dalian Commodity Exchange fell 0.2 percent, while the May Chicago Board of Trade soyoil contract gained 0.9 percent.

The offer price for crude palm kernel oil stood at 4745.43  ringgit per tonne <PKO-MYSTH-M1> in the evening, according to price assessments by Thomson Reuters.

Palm oil prices in Malaysian ringgit per tonne
CBOT soy oil in U.S. cents per pound
Dalian soy oil and RBD palm olein in Chinese yuan per tonne
India soy oil in Indian rupee per 10 kg
Crude in U.S. dollars per barrel

($1 = 3.9270 ringgit)
($1 = 66.4500 Indian rupees)
($1 = 6.4775 Chinese yuan renminbi)
– Reuters

Source : The Star

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Indonesia to issue a moratorium on new palm oil concessions

Indonesia to issue a moratorium on new palm oil concessions

JAKARTA: Indonesia, the world’s top producer of palm oil, will issue a moratorium on new palm oil concessions, President Joko Widodo said on Thursday, part of the country’s efforts to reduce the sector’s impact on the environment.

Home to the world’s third-largest area of tropical forests, Indonesia has been criticised by green activists and other Southeast Asian nations on its forestry policy and for failing to stop the region’s annual “haze” problem caused by forest-clearing for palm and pulp plantations.

Palm oil is a major growth driver in Southeast Asia’s largest economy, and the industry is sensitive to the issue of environmental standards, used by global food and consumer goods giants like Kellog, Mars and Unilever, to determine which producers are acceptable.

“They can no longer ask for concessions for palm oil [or] mining,” Widodo told reporters on Thursday, when asked about the moratorium plans. Widodo said he had spoken to government ministers regarding the plan but stopped short of providing a timeline for the move.

Based on the government’s calculations, the area already issued to oil palm growers could be more than twice as productive “provided they use the right seeds”, the president said.

Agriculture Minister Andi Amran Sulaiman said he agreed with the plan, adding that in terms of productivity Indonesian palm growers were a long way behind those in Malaysia.

“We should invest in sugar, corn and cattle,” Sulaiman told reporters, noting that Indonesia is already the world’s top palm oil producer and that output from its existing plantations is expected to climb.

Earlier on Thursday, the government’s anti-monopoly agency announced it would investigate suspected cartel practices among a grouping of the country’s biggest palm oil producers – including Wilmar International, Cargill Inc and Golden Agri Resources – that are signatories to the Indonesian Palm Oil Pledge.

The landmark pledge to cut deforestation, agreed in 2014, was seen as in direct competition with the government’s own standards and too difficult for smallholders to comply with.

Smallholders account for about 40 percent of Indonesia’s palm output.

Last week media reports said Hollywood actor Leonardo DiCaprio faced the risk of being banned from returning to Indonesia over his comments that palm oil plantations are destroying the Sumatran rainforests and endangering wildlife.

Later, however, the forestry minister said she shared DiCaprio’s concerns and that he had acted in good faith. – Reuters

 

Source : The Star, 15 April 2016

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MPOA appeals to Govt to lift foreign worker freeze

MPOA appeals to Govt to lift foreign worker freeze

KUALA LUMPUR: The Malaysian Palm Oil Association (MPOA) has appealed to the Government to lift the freeze on the recruitment of foreign workers to maximise productivity during the forthcoming peak crop and into the second half of the year.

The association, on behalf of all growers including more than 300,000 small holders, said in a statement that it was thankful that the proposed workers’ levy of RM1,500 had been revised to RM640 per worker.

“Under the current adverse and prolonged weather conditions (severe drought) leading to low production and high costs, this gesture from the Government was a very welcome relief to all the nation’s oil palm growers.”

It said palm growers were looking forward to the immediate unfreezing on the recruitment of foreign workers and eager to quickly get into the oil palm fields to cope with the backlogs.

“Delays in harvesting and field upkeep are among the reasons for the industry’s inability to raise fresh fruit bunch yields and enhance oil extraction rates.

“Growers have faced a long spell of low prices and productivity and the current scenario of slightly improved prices have given them some hope to recover, but not without adequate resources of workers,” it said.

MPOA’s appeal follows hot on the heels of the Malaysian Rubber Glove Manufacturers Association’s (Margma) plea last Friday which also asked for the lifting of the freeze on foreign workers intake.

Margma noted that the industry needed to keep on growing if the country wanted to stay as the world’s largest producer of medical and surgical gloves globally.

Malaysia has about 106 manufacturing plants that produced some 120 billion pieces of medical gloves with an export value of RM13.1bil last year.

Margma said the volume was expected to grow by 15% this year to hit 138 billion pieces.

Source : The Star, 5th April 2016

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Malaysian palm oil/Vegoils: Market factors to watchMonday April 4

Malaysian palm oil/Vegoils: Market factors to watchMonday April 4

KUALA LUMPUR: The following factors are likely to influence Malaysian palm oil futures and other vegetable oil markets on Monday April 4.

FUNDAMENTALS

* Malaysian palm oil futures rose on Friday, charting a third session of gains this week and tracking competing vegetable oils.

*  U.S. soybean and wheat futures rose on Friday as estimates of smaller-than-expected U.S. plantings spurred buying.

*  Oil tumbled about 4 percent on Friday, after a Saudi prince reportedly said the kingdom will not freeze output without Iran and other major producers doing so, and data showed the global crude glut was likely to grow.

MARKET NEWS

* Stocks on Wall Street rose on Friday after better-than-expected U.S. jobs and factory survey data, but a gloomy manufacturing report in Japan knocked other global equity markets lower and crude oil prices slumped.

DATA/EVENTS

> Cargo surveyor ITS releases Malaysia’s April 1-10 palm oil export data on April 11.
> Cargo surveyor SGS releases Malaysia’s April 1-10 palm oil export data on April 11.

Palm, soy and crude oil prices at 0030 GMT

Contract             Month    Last  Change       Low     High    Volume
MY PALM OIL         APR6         0   +0.00         0        0         0
MY PALM OIL         MAY6         0   +0.00         0        0         0
MY PALM OIL         JUN6         0   +0.00         0        0         0
CHINA PALM OLEIN    SEP6         0   +0.00         0        0         0
CHINA SOYOIL        SEP6         0   +0.00         0        0         0
CBOT SOY OIL        MAY6     34.47   +6.80     34.44    34.49       790
INDIA PALM OIL      APR6    552.10   +6.80    548.20    554.1      3049
INDIA SOYOIL        APR6     646.2  +11.45       638    649.5     57750
NYMEX CRUDE         MAY6     36.45   -0.34     36.21    36.70     16291

Palm oil prices in Malaysian ringgit per tonne
CBOT soy oil in U.S. cents per pound
Dalian soy oil and RBD palm olein in Chinese yuan per tonne
India soy oil in Indian rupee per 10 kg
Crude in U.S. dollars per barrel
– Reuters

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Recruitment freeze won’t affect pact with Bangladesh

Recruitment freeze won’t affect pact with Bangladesh

PETALING JAYA: The decision to halt the recruitment of new foreign workers will not affect the validity of the agreement signed with Bangladesh.

This is because the Memorandum of Understanding (MoU) was for a period of five years, said Human Resources Minister Datuk Seri Richard Riot.

“The agreement will remain valid when the freeze is lifted. We have signed agreements for intake of foreign labour not only with Bangladesh but with seven countries.

“The freeze does not make the agreements null and void,” he told The Star when met at Parliament lobby yesterday.

On Saturday, Deputy Prime Minister Datuk Seri Dr Ahmad Zahid Hamidi said the Cabinet had decided to put a stop to the recruitment of new foreign workers into the country.

He said employers who needed workers would have to apply to legalise existing foreigners in the country without work permits or whose permits have expired.

Dr Ahmad Zahid, who is also the Home Minister, said employers had until June 30 to legalise such foreign workers.

Meanwhile, the Works Ministry said the Government’s decision to freeze the intake of foreign workers would not disrupt existing construction projects.

Its Minister Datuk Seri Fadillah Yusof said the current workforce was sufficient to meet demand.

“This is especially so with the rehiring programme introduced by the Government, which will allow illegals to obtain valid work permits and be reallocated to sectors that need them.

“However,using foreign labour is a short-term solution,” he said when contacted yesterday.

In the long run, he said the industry must reduce its dependency on foreign labour by leveraging on the Industrialised Building System (IBS) method and mechanisation in construction.

 

Source : The Star, 17th March 2016

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