The Busiest Land Crossing in Southeast Asia: Part #1 - Virus Closes It

At the stroke of midnight on 18 Mar 2020, the Johor-Singapore border sealed shut following the enforcement of the two-week Movement Control Order (MCO) in Malaysia. The MCO left one of the busiest land crossing in the world strangely empty the following morning, a stark contrast from the night before when Malaysians workers scrambled to cross into the city-state before the borders were closed.

Data from the Beat the Jam! app shows a comparison between the time typically taken to clear the immigration checkpoints and the time taken on 17-18 Mar 2020. Also see photos showing the difference in traffic congestion on the Causeway at midnight and the morning of 18 Mar 2020.

On the next post about the Johor-Singapore crossing, see Part #2.

A Thorny Conundrum: A Case of the Coronovirus and the Durian Economy

The coronavirus outbreak has stymied the durian economy. Demand for the king of fruits has dipped dramatically amidst widespread city lock-downs and logistics disruptions in China, resulting in durian prices falling by as much as 50%—traders in Raub reported that prices for the Musang King has reduced from RM60 to RM30 per kg. The durian tourism industry has also been hit hard, especially following Malaysia’s temporary travel ban on Chinese nationals from all provinces currently under lock-down.

Unsurprisingly, farmers are becoming wary about processing their durian crops to China, and are beginning to look for alternatives locally and in Singapore. Their hesitance is justifiable—as explained in our previous post on the durian economy (see image below), China is expected to import from Malaysia USD120 million worth of durians annually, with approximately 23% of Malaysia premium-grade output exported, amounting to 75,000 tonnes to China in 2018. Overall, Malaysia reports RM173.3 million (about USD41.9 million) worth of durians in 3Q2019 exported around the globe, the highest quarter of recorded since 2015.

The drastic slowdown in durian imports from China would mean a lot of unwanted durians left in the traders’ storage. Overall trade with China in containers is down 20% or more in recent weeks and some may be affected by about 50% of airfreight volume supply cancelled (and expectations of elevated air freight rising significantly*).

There is some sliver of hope, however. CNA pointed out that the decreased demand in China was due to the outbreak itself—interest in the prickly fruit is still there, albeit just not the right time for a hearty durian meal. The Pahang Fruit Farmers’ Association has expressed optimism that the outbreak could be contained by the time the durian peak season (April to August 2020) comes around.

Until then, the Malaysian durian farmers (together with other fruits farmers in Myanmar, Thailand and Vietnam and beyond) will have to continue to keep calm and carry on, at least until the storm of the coronavirus blows over.

Check out Khor Reports’ Durians for China: A Preliminary View and Dashboard.

*Loadstar.com in its article ”The calm before the 'supply chain storm' when China's air freight rates soar,” points to 300-400% rise in airfreight rates once production is back on full and “before belly traffic returns to the country.”

Screenshot from Khor Reports’ Durian Economy map

Harder and Harder to Breathe: Burning Landfills and Week-Long Fires

Remember our post on the air pollution problem in Kedah? Unfortunately, there are more news of smokey conundrums in Malaysia’s rice bowl state: a fire broke out at a rubbish dump in Jitra on 1st February 2020.

This wasn’t the first rubbish dump to go up in blazes in Kedah—a landfill in Bedong, Sungai Petani was similarly caught on fire on 20 January 2020, with firefighters struggling for more 18 hours to put out most of the flames, a task made more difficult since most of the burning waste was plastic. A week later, the fire brigade was still working to control the damage caused by the smouldering waste.

It’s disheartening to continue receiving such updates; late last year, we published a post on the air pollution issue at Cinta Sayang, Kedah, a problem that appears to be primarily due to open burning of waste plastic at processing sites, which in turn adversely affects the quality of life for residents in the area, especially health-wise. While merely a preliminary view, do give the post a read—it provides an insight as to how serious the situation has gotten and how important it is to solve it (although nobody should need any further convincing at this rate, to be perfectly honest).

#KhorReports #airpollution #wasteplastic #wasteplasticburning

SCMP: The India-Malaysia Palm Tiff and the Return to Agriculture

It’s been a bit of a busy month for Khor Reports. One of the several things lined up include contributing comments to the South China Morning Post (SCMP) on a couple of issues that cropped up recently.

The first concerned the trade tensions between Malaysia and India, which significantly impacted palm oil trade between the two countries:

“Last year, Indians and Malaysians waged rival boycott campaigns on social media and although it is unclear how much traction these movements garnered, Khor, the economist, said it was unusual to see such discussions about the palm oil online “as it doesn't involve end consumers”. “But having tens of thousands of mentions of Malaysian palm oil online is a clear sign of issues, meaning that after that episode the level of mentions was 80 per cent higher than previously which gives us some insight into domestic angst,” Khor said.

The second was about policy suggestions for Malaysia to return to agriculture, following a RM50 billion (USD12.3 billion) food import bill in 2019.

“The good agricultural practices of Malaysian farmers should be well established, and be held in high regard, to establish a loyal domestic market,” Khor said. “Pro-farmer and food-security efforts may be needed. Imports can flood the market in an unpredictable way and that has to be considered.”

Click on the links above to read the full SCMP articles.

BFM: India Asks Refiners to Stop Buying Malaysian Palm Oil

Earlier this month, BFM invited Segi Enam Advisors principal, Khor Yu Leng, to give her views regarding India’s more recent trade move on Malaysian palm oil. Click here to listen to the podcast.

“The latest move comes after Malaysia's criticism of India's actions in the Kashmir region and its new citizenship law. We look at how this affects Malaysian palm oil producers, and what it means for our trade relationship with India.

Produced by: Loo Juosie Presented by: Lee Chwi Lynn, Aiman Rashad.”

Malaysia Palm Oil: Planted Area Growth and Limiting It

We are hearing from the market that some feel that the proposed Malaysia "limit" to oil palm area is a signal for expansion! The area limit (first mooted at a lower level, then raised) has been suggested as a measure to improve the image of Malaysian palm oil against foreign accusations of deforestation. At the same time, it may ease palm's supply glut (resulting from rapid expansion when palm prices were buoyed in the biofuels boom). 

Some figures may explain this alleged “pro expansion” mood. 6.5 million hectares is significantly higher than the current licensed area; and the implied pace of expansion would be 130,000 hectares per year for a push to the limit by 2023 (the “target” year mooted by the government, see red line in chart). This is a significantly faster pace than recent growth in hectarage (blue line) of 69,000 hectares per year in the recent 3 years.

But if there is an upward revision of planted area, of say 5%, the pace of expansion to reach the limit could be 80,000 hectares per year (yellow line; not so far off the recent 3-year average change).

How would the area expansion be distributed? Or perhaps 2023 is not a “target” year and upstream industry players are quite mistaken in interpreting it this way.

Read more at Palm Weekly!

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

In a brief moment of levity, Khor Reports has decided to (finally) hop on the boba bandwagon and find out what the hype’s about. After a bit of internet trawling, we now have a dashboard of selected boba brands across Malaysia and a bit of market information on the popular drink.

Being the wet blanket as we are though, we decided to also add in information about sugar consumption and how the boba faze might not help health-wise in the long run. (We’re sorry, we care too much to ignore this.)

Click here to read the full post!

Khor Reports' Talking Series: Malaysia Renewable Energy

The Pakatan Harapan government has announced plans to achieve its target share of 20% renewable energy mix in the nation’s electricity supply by prioritising solar-PV. The question: is this really a viable move? Khor Reports spoke to Ir. Krishna Moorthy of MECC Engineering Sdn Bhd to find out.

This is the first of Khor Reports’ Talking Series, featuring the topic of renewable energy in Malaysia. Click here to read the full post.

Out of Sight, Out of Mind: Waste Plastic Imports to Malaysia

In October 2018, Malaysia banned the imports of contaminated plastic wastes in effort to restrict the supply of waste plastics into the country. Despite the ban, data shows that monthly plastic waste imports is beginning to increase. The Pakatan Harapan administration has even flirted with ideas to build at least one incinerator in each state (and we have thirteen of them!).

Khor Reports has consolidated data on waste plastics issues in a dashboard, with information compiled from media reports. This provides an overall view of plastic waste imports and the concerns it has raised for the Malaysian people. The data is as at 27 September 2019, collected by a group of dedicated volunteers over a period of about two weeks.

Out of sight, out of mind, when it really shouldn’t be. Click here for the full post and the dashboard.

Sneak Peek! A Preliminary View (and a Dashboard) for Durians in China

It is up! After a couple of months of mining and examining about 3,300 lines of data, Khor Reports is pleased to present to you our preliminary view of durians in China.

In the post, we talk about the spike in interest for the King of Fruits as well as the possible ramifications of the rather dramatic increase in demand for durians from China. We’ve also thrown in a dashboard of consolidated data which illustrates an overall view regarding the local durian farmscape, products, and China retail indicators—feel free to play around with it!

Click here to read the full post.

#Durian #MusangKing #China #Malaysia #ChinaMalaysia