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PalmTrack—Update for the Week

This week in PalmTrack, we covered:

  1. Neste's renewable ops & news: Neste Oyj of Finland has been a big mover in renewable transport fuels and has been the group to watch for quite some years now. It is worth looking at Neste’s most recent financial reporting for how its sourcing platform, expansions, and maintenance are evolving, as well as its slew of news headlines.

  2. Tankers from Lubuk Gaung Port: PalmTrack’s sample reports over 200k net tonnage of tanker arrivals from Lubuk Gaung origin, in the four weeks leading up to 23 Jan 2022. This zone is a prominent with big refineries, oleochemical facilities, and also includes waste oil processing. Key exporters include RGE-Apical-AAA, GAR-Sinarmas, Musim Mas, and others. Port-at-calls regions are notably Europe and Malaysia-Singapore.

  3. Tankers from Indonesia: Port calls for 10–23 Jan 2022 (14 days) count, c. 60 palm-related tankers, with sample net tonnage c. 360k (versus 14D to 9 Jan, c.70 tankers with sample net tonnage c.430k). These two weeks (10–23 Jan), the share of calls was higher for ASEAN (Malaysia, Singapore) and Americas ports. In the news, Indonesia requirement for export permits for palm oil. Indonesian used cooking oil (UCO) exporters are also concerned about new export restrictions that came into force on 24 Jan.

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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Orangutans in a Social Media Storm

Plantation and Industries Minister Zuraida Kamaruddin made an admittedly bewildering statement during a dialogue session organised by the Malaysian Palm Oil Council (MPOC) on 5 Jan 2022: according to her “in Malaysia, if you see orangutans, orangutans will kill you first. Not we kill the orangutans first.” Conservation experts have understandably responded to the Minister’s, pointing out the comments were inaccurate.

The Ministry has since issued an official statement, claiming that the remarks were taken out of context and that it was said in jest.

Orangutan and deforestation issues have been the iconic question for palm oil. The Minister’s apparently flippant comments are a challenge for palm oil promotion intentions, but she points to the bigger (missed) context her call for a focus on orangutan issues and data. Positive and decisive actions on orangutans should be the next step from this inordinate social media storm.

Getting serious about orangutans. The info-data issues include: 

  1. Orangutan population data has always been a bit difficult as it is based surveys and back-casting. Newer research seems to estimate a lot more orangutans in the past, and the reduction is often proportionate with forest loss. Some industry observers are suspicious of this, and they also worry about misleading images including a popular photo of an orangutan being "attacked by heavy equipment" that keeps circulating on social media. In fact, we hear that the animal, named Hyundai, was being rescued by this equipment. 

  2. NGOs should be more public and transparent with their information. There are even some accusations online lack of accountability for corporate donations for orangutan efforts. Whether true or not, from first hand experience, we know it is hard to find public information about primate conservation projects and their costs. 

  3. Primates are complex and not cuddly creatures, and all wild animals need to be treated with respect to reduce conflict with humans. This is a theme of conservation efforts and forums that MPOC has sponsored. Our late 2019 review of MPOC’s wildlife projects are here, and the project list has not seen updates since although there is news of some new initiatives. 

There can and should be more public information about orangutans (and other endangered species) from all stakeholders. If we are to care about conservation, we have to get serious about the costs as well as how much area and animals we can cover. Transparency and accountability are key. 

For more context of the Malaysia social media storm: Malaysian netizens have been criticising Malaysian politicians for many months now. The wrong words or tone are picked up terribly fast on TikTok, Twitter, and other social media platforms. Over the years, there has been a struggle to promote a positive image for palm oil. A previous effort to put Prime Minister Mahathir as the face of Malaysian palm oil, with a recommendation to "take a spoon a day", came up against counter-currents in domestic opinion as an investigation of school children talking about sustainable palm oil caught many by surprise (and there will be ongoing efforts to ensure children do not “badmouth” palm oil). Mahathir himself was also caught up in political issues with India, triggering a call to boycott Malaysia palm oil.

For more, listen to the BFM podcast here following the Minister’s alleged joke: Zuraida, Orangutans and Palm Oil: Unpacking the Issues

PalmTrack Resumes!

PalmTrack resumes after a two-week break, bringing you more news and analysis on the palm products trade.

The last three months of 2021 saw some significant updates in the area including: (1) expectations of further port delays and congestions at major Chinese ports amid AIS data block and tighter pandemic-related regulations; and (2) our watchlist of nearly 50 palm-related vessels; and (3) vessel movements of selected trade origins and/or destinations, including tanker presence at the Dumai area, Indonesia-India tanker voyages, and tankers travelling from Malaysia, Papua New Guinea, and Thailand.

This year, we start off with a three-part series on the analysis of the issues and opportunities in palm biofuels. We have just published Part 1, which looks at the USD billions involved and who is more or less committed to spending and paying for it. We have also looked at the impact of the flash floods on palm oil supply in Indonesia and Malaysia. Subscribe to PalmTrack to read these posts!

Written by KHOR Yu Leng and Nadirah SHARIF of Khor Reports/Segi Enam Advisors, PalmTrack is a free, members-only space offering exclusive updates focusing on the palm products trade and presenting info-data driven insights with reference to granular trade statistics, near-time shipment/cargo information, and human-source market intelligence. Our coverage centres around Indonesia’s ports. Click the link below to subscribe!

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Mapping the Natural Rubber Value Chain in Malaysia

Happy New Year, everyone! It’s been a tumultuous end to 2021—the Philippines was ravaged by Typhoon Odette, Malaysia faced one of its worst floods in decades, several countries around the world were reporting and/or expecting a surge in Omicron infections.

The floods has triggered yet another wave of anger against the government, with frustrated Malaysians taking to social media to criticise officials for their incredibly slow response. Citizens and migrants are forced to help each another once again, this time under the #BanjirDarurat (Flood Emergency) campaign. Questions are also heating up on deforestation and the source of log jams in rural zones. As usual, we have the relevant social media data which we will explore in our next post under the Data and Analysis page.

For this post, a brief moment of happy news for us: in mid-December 2021, WWF released two reports exploring the sustainability issues surrounding the Malaysian natural rubber industry, both of which Segi Enam authored. What we found was that while the rubber supply chain is generally straightforward, the lack of transparency, traceability, and publicly available data makes it a difficult industry to evaluate when it comes to sustainability standards. Much of the root of the problem lies within the production system—for instance, smallholders dominate in this area and are typically not afforded the incentives to adopt more sustainable practices.

Segi Enam (WWF; 2021): Indicative map of rubber plantations in Malaysia based on the 2013-2014 dataset and maps retrieved from the Global Forest Watch (GFW) platform. Rubber dominant zones (dark green and mid-green) include: (1) Gua Musang, Kelantan; (2) near the Gerik, Perak-Southern Thai border; (3) Serting and Palong, Negeri Sembilan; (4) Lipis and Raub, Pahang; and (5) FELCRA/RISDA projects in Sarawak and estates in Sabah.

Read the full report here: Mapping the Natural Rubber Value Chain in Malaysia.

For the second report focusing specifically on the rubberwood sector: Addendum Report on Rubberwood