Archived News

SHAH ALAM, Feb 7 (Bernama) -- A Malaysian innovator-turn technopreneuroffers a new service to industries wanting their industrial material toundergo a strength test according to their needs and requirements.

8/2/2002 (Business Times) - THE soyabean producers took on the palm oilindustry a while back, and there was nothing gentlemanly about thecampaign too, the sole objective being to defend its share of the globaledible oils market.It was a bruising battle but palm oil ultimately triumphed as claims bythe soyabean lobby that the commodity of which Malaysia is the biggestproducer was unhealthy quickly proved to the contrary.Indeed the smear tactics backfired and palm oil became even more popularamong the world’s increasingly health-conscious consumers, ironicallythanks in part to the publicity generated.This was in the late-1980s. Now it looks like a new challenger is climbinginto the ring; not quite a heavyweight like soyabean, but one which couldnevertheless still put palm oil to the test.It has emerged that the tallow industry, a relatively minor player in theglobal edible oils and fats trade, is leading the fresh attack.Tallow is mostly produced from the suet of sheep or cattle, and containsstearin, palmitin and olein that can be used to make candles and soap.According to Malaysian Palm Oil Promotion Council market promotionsdirector Dr Ahmad Ibrahim, the council had been alerted to a disturbingincident at a recent oleochemical conference in Amsterdam.A speaker who represents an Australian oleochemical company toldparticipants that oil palm cultivation was destroying the environment.In the presentation, it was claimed that the activity was bad news for theenvironment because of the excessive use of fertilisers, pesticides andherbicides which contributes to loss of biodiversity.The speaker also alleged that massive regions of rainforests had beencleared in Indonesia to plant oil palm.In truth, of all the edible oils crops, studies have shown that oil palmcultivation poses the least threat to the environment, Ahmad said.For one thing, it is a crop which depends very little on inorganicfertilisers and herbicides compared to its rivals, he said in his columnfor Business Times.In addition, Malaysia has progressive plantation companies, with GoldenHope, forexample, having even won the prestigious UN Global 500 award forthe zero-burning technique it introduced to the industry, Ahmad said.The fact is the tallow industry has been feeling the impact of a falloutfrom the mad cow disease epidemic in Europe, which conversely benefitedthe palm oil industry.The mad cow disease scare has prompted the European Union to ban animalfeed derived from animal fats, and that includes tallow.“The EU’s import of palm stearin rose almost immediately after therestriction was put in place.”It looks like the desperate effort to smear palm oil is the direct resultof that, and given consumers’ growing concern over the environment, thethreat of rainforest and biodiversity degradation is a convenient tack, hesaid.Animal fats were already experiencing a downtrend in trade and consumptionbefore now, largely on account of their negative nutritional value, butalso because of religious taboos, Ahmad noted.Today, very little of the world tallow output is eaten, mostly being usedto make soap or processed into oleochemicals and their derivatives, headded.World production of tallow now total just above 8 million tonnes a year,compared to palm oil’s well 20 million tonnes.Malaysia alone produces over 11 million tonnes of palm oil annually.The US is the main source of the world’s tallow, accounting for close to48 per cent.The EU is a distant second with under 13 per cent.Australia, with a 6 per cent share, is however the biggest exporter of thecommodity after the US. In 2000, the US exported slightly more than 1million tonnes, and Australia about half that, which makes the latter theworld leader in the sector in terms of export per unit production.

MUMBAI, Feb. 4. (Business Line) - SERIOUS malpractices in the import ofvegetable oils including misuse of concessional duty and misdeclaration ofoil to avail of lower duty need to be checked with effective rules to plugpossible loopholes, a Kolkata-based trade association has urged.In a representation to the Central Board of Excise and Customs, Mr RajuMansinghka, President of the All-India Oils and Seeds Foreign TradeAssociation, has pointed out that fatty acid distillate is mixed withrefined oil and declared as crude oil in order to avail of lower customsduty on the latter.In order to address the issue which has serious health implication, theassociation has suggested a stipulation of minimum of 3 per cent freefatty acid content for crude oils of palm group or reduction of the dutydifferential between crude and refined oils to 15 percentage points.In the guise of vanaspati imports from Nepal, a lot of refined liquid oil(refined palm oil) is flowing into the country, the trade body hasalleged, adding that though declared as vanaspati, such oil is neitherhydrogenated nor is sesame oil used as tracer.The association has recommended that restricting vanaspati imports fromNepal through only two or three customs borders and testing of samples forquality by the customs and Government food laboratories would help preventmalpractice and reduce distortions in the market.

DUBAI, Feb 6 (Bernama) -- Malaysia is looking at new ways to boost palmoil exports to Gulf Arab countries, a senior Malaysian Palm Oil Board(MPOB) official said here on Tuesday.

KUALA LUMPUR, Wed. 7 February, 2002 (NSTP) — Rubber smallholders will bediscouraged from replanting their land with oil palm in a bid to ensurethere is sufficient latex for downstream activities in the country andthose who insist on doing so will lose the government subsidy.

KUALA LUMPUR, Feb 4 (Bernama) -- The oleochemicals industry will see astable growth of between 5.0 and 6.0 percent in 2002 amidst higher demandfor products which use oleochemicals, says director-general of MalaysianPalm Oil Board (MPOB) Datuk Yusof Basiron.

BANGI, Feb 5 (Bernama) -- Minister of Primary Industries Datuk Seri Dr LimKeng Yaik Tuesday said that his ministry has asked the Cabinet to give itthe authority to screen and approve applications for the recruitment offoreign workers in the plantations and estate sector.

Kuala Lumpur 4 January, 2002 (NSTP) - THE agriculture sector is in for aslower growth of 0.8 per cent in 2002 due to declines in production ofcrude palm oil, rubber and saw logs.Crude palm oil production is expected to decline by 2.1 per cent nextyear, on account of low biological yield cycle of the crop and the largehectarage which has been taken out of production due to replanting.Rubber production is projected to drop 1.7 per cent in 2002 in line withMalaysia’s obligation to reduce output by 4 per cent under a tripartiteagreement with Indonesia and Thailand.At the same time, saw logs production is expected to decline by 2.9 percent in 2002 in tandem with the policy of sustainable forest management.Following that, exports of major commodities in 2002 is expected to remainunfavourable, primarily attributed to lower prices for all majorcommodities, including palm oil and crude oil.Sawn timber production is expected to contract by 13.8 per cent in 2001,causing value added of forestry sector to decline by 11.2 per cent toRM2,746 million.Aquaculture, fishing and crops like tobacco, pepper and herbs are expectedto register higher output. In fact, pepper production is expected toincrease by 14.2 per cent in 2001 from a larger planted area of 13,500 ha.Value added agriculture sector including livestock, forestry and fishingis estimated to increase by 1.2 per cent in 2001 to RM17.91 million fromRM17.69 million last year.Agriculture growth will be driven by a 8.9 per cent growth in productionof crude palm oil, coupled with higher growth of 3.1 per cent in valueadded agriculture.For 2001, production from rubber and saw logs is expected to decline by5.7 per cent and 11.2 per cent respectively, while value added in fishingcontracts by 1.9 per cent.In 2001, export earnings from primary commodities comprising agriculturalproduce and mineral products are estimated to decline by 9.3 per centagainst a growth of 12.1 per cent in 2000.Export earnings from agricultural commodities are seen recording a smallerdecline of 6.8 per cent in 2001 due to lower decline in export volume ofsaw logs, rubber and sawn timber.Exports from mining are estimated to decrease by 11.2 per cent from 60.9per cent last year due to lower price of crude oil and LNG.Earnings from palm oil is expected to turn around by 6.4 per cent, after asharp drop of 31.3 per cent in 2000, in anticipation of higher price ofpalm oil for the rest of the year. As such, export volume is expected togrow by 19.6 per cent this year.Receipts from the export of saw logs are estimated to below at RM1.65billion in 2001 compared to RM2.49 billion last year, as a result ofcontraction in both export volume of 21.3 per cent and export unit valueof 15.7 per cent.Meanwhile, higher domestic demand for rubber has resulted in lower volumeavailable for export. A decline in rubber export volume of 11.1 per centin 2001 and unit value of 7.5 per cent will result in export earnings todecline by 17.7 per cent.Export receipts from cocoa is estimated to rise by 60.8 per cent to RM53million. Export unit value of pepper is expected to decline by 54.3 percent to RM7,143 per tonne from RM15,630 per tonne in 2000. Some RM200million in export earnings is anticipated.Export volume of crude petroleum is estimated to stagnate at 16,750 tonnesthis year. Coupled with lower prices, export earnings from crude petroleumare expected to decline by 14.5 per cent to RM12.24 billion from RM14.24billion last year.Earnings from exports are expected to decline by 7.6 per cent to RM10.44billion in 2001 from RM11.30 billion in 2000.

KUALA LUMPUR, Feb 2 (Bernama) -- Crude palm oil (CPO) futures prices onthe Malaysian Derivatives Exchange (MDEX) were expected to be inrangebound trading next week, a dealer said.

Kuala Lumpur 4 February. 2002 (Business Times) - THE Government hasgiven smallholders an extra six months to capitalise on a special schemeto replant their oil palm and rubber holdings.Industry sources said of late, improving commodity prices have discouragedsome smallholders from clearing their land to grow new oil palm trees.As at January 15 this year, only 80,000ha or 40 per cent of oil palm treeshave been replanted, well short of the 200,000ha target earmarked forreplanting by the end of last year.“The scheme has been extended to June 30 this year because smallholdersare reluctant to cut down their ageing trees,” an industry source toldBusiness Times.The Government’s oil palm replanting scheme was first announced in Marchlast year with the first round to end on June 30 last year.Due to the poor response from the smallholders, the Government hadextended the scheme to December 31 last year. At that time, only 136ha hasbeen replanted.Prices of crude palm oil (CPO) currently fetch between RM1,100 a tonne andRM1,200 a tonne in the market compared with an average of RM690 a tonne, a10-year low, in February last year.Fresh fruit bunch prices, which are more relevant to smallholders, havemeanwhile shot up 100 per cent to RM200 a tonne compared with RM100 atonne ex-farm previously.Under the scheme, the Government has allocated RM200 million in which oilpalm smallholders are paid RM1,000 per ha to cut their oil palm trees agedmore than 25 years old while rubber smallholders are paid RM1,100 per ha.The Malaysian Palm Oil Board (MPOB) is the sole Government agency handlingthe scheme. Statistics showed that as at January 15 this year, only RM40million or 20 per cent of the RM200 milllion has been disbursed to thesmallholders.The scheme is part of the RM500 million package announced by theGovernment in March last year to help oil palm and rubber growers copewith low commodity prices.The Government had also formed a sub-committee on raising the income ofthe smallholders, headed by Deputy Prime Minister Datuk Seri AbdullahAhmad Badawi.To be eligible for the scheme, smallholders must first register with theMPOB before carrying out replanting activities using their own financesbefore claiming them from MPOB.The scheme is open to all smallholders including those from the FederalLand Development Authority, Federal Land Consolidation Authority, RubberIndustry Smallholders Development Authority, private estates andgovernment agencies.As at January 15 this year, smallholders had applied to replant a total of178,000ha of their ageing trees, of which 80,000ha had been replanted andpayments for 40,000ha were already paid out by MPOB.The scheme is aimed at reducing total productive oil palm area in thecountry by 200,000ha and also cut current national CPO output, whichtotalled 11.8 million tonnes last year, by 10 per cent or 1.18 milliontonnes by end-2002.This measure is aimed at curbing oversupply and boost prices against theworld’s other competing 16 edible oils.Primary Industries Minister Datuk Seri Dr Lim Keng Yaik had on severaloccasions voiced his concern over the years of the lack of cooperationdemonstrated by the smallholders in supporting the Government’s replantingefforts.Dr Lim had said that he was worried rising CPO prices will leave thesesmallholders happy to just continue harvesting their crops.

27 January, 2002 (Business Times) - THEY form almost 70 per cent of theconstruction workforce and an equally sizeable proportion of domestichelpers as well as plantation workers, yet this week, Malaysians made aresounding call to send Indonesian migrant workers back home.

29 January, 2002 (Business Times) - EFFORTS to reduce the population ofIndonesian workers in Malaysia may appear to work well on paper but inpractice, it may carry a high price tag.In recent weeks Indonesian workers had made front-page news in Malaysiawhen they were involved in two rioting incidents.Almost immediately came the calls to halt the arrivals of new Indonesianworkers and to immediately deport those who are here illegally.It was a case of paying the price for the country’s economic success. Thecountry’s average 8 per cent economic growth, registered since themid-1990s, had generated plenty of jobs, and this had attracted thelargely unskilled workforce from Indonesia because Malaysians had turnedto better paying and less physically strenuous jobs. Filling the void hadbeen some 2 million foreign workers.While the economic downturn beginning 1997 had brought the number down toabout 1 million, it is widely believed that, including illegal workers,there are now about 3 million foreign workers in the country.Official estimate quotes a much lower number, 800,000 in all, but only onthe legal foreign workers as at September last year. Of this, 64 per centwas employed in the manufacturing and plantation sectors.Indonesians formed 74 per cent of the lot, followed by Bangladeshis (18per cent), Filipinos (2 per cent), Thais (1 per cent) and others (5 percent).Indonesia has been the biggest supplier of workers to Malaysia by virtueof its close proximity which translates into cheaper costs for employerswho engage them.Malaysian Employers Federation (MEF) executive director Shamsuddin Bardansaid Indonesian workers are easy to train as they speak the same languageas Malaysians, and share a rather similar culture.“Communication is an important factor when recruiting foreign workers,” hesaid.Malayan Agricultural Producers Association (Mapa) director Mohamad Audongsaid Indonesian workers are favoured in estates as most of them areengaged in agricultural work in their home country.However, the recent rioting incidents by Indonesian workers could changethe landscape altogether as authorities are close to adopting some sort ofa “hire Indonesians last” policy.Experts, however, think that the move may not be an easy one to implement,primarily due to the sheer number of Indonesians already present in theunskilled labour market in Malaysia.Economists and employers believe that the construction, plantation,services and other labour-intensive manufacturing industries would beaffected.RAM Consultancy Services Sdn Bhd chief operating officer Dr Yeah Kim Lengsaid employers who have to get replacements for their Indonesian workerswill probably incur additional costs in training workers from othercountries.Estate owners will likely replace the Indonesians with Bangladeshi workersbecause based on productivity, they are second after the Indonesians,Mohamad Audong said.Mapa members, which represent about 450 rubber and oil palm estates inPeninsular Malaysia, employ about 37,000 foreign workers.Mohamad Audong said in the long run, the higher cost of recruiting workersother than Indonesians will manifest in higher labour costs for employers.Mapa will be appealing to the Government for some flexibility in therecruitment of Indonesian workers if its members are unable to get therequired number of workers from other countries.“We’ll ask the Government to reconsider on a case-by-case basis,” MohamadAudong said.MEF’s Shamsuddin concurs, saying that the immediate impact of theGovernment’s ruling is serious. He urged the Government to give adequatetime for employers to adjust to the new ruling.“I believe the policy needs to have a lead time so that people will not becaught by surprise… give enough time for the employers to make allnecessary adjustments,” he said.He expressed concern that manufacturers may not meet their export ordersif they are not able to recruit adequate manpower.On another aspect, RAM’s Yeah sees the Government’s recent move as asignal for labour-intensive industries to go for automation.Meanwhile, economist Tan Sri Ramon Navaratnam said employers must see theneed to innovate and introduce more capital-intensive technologies.The plantation sector, he said, should adopt a long-term economic outlookand think of high-yield production methods while getting rid oflow-yielding rubber and oil palm trees.Navaratnam also suggested that Malaysia imports natural rubber fromIndonesia so that the value-added downstream activities can be carried outin the country.“We should let the low-cost labour-intensive industries be run bycountries with lower labour costs because they still have a unskilled orsemi-skilled workforce,” he said.He added that Malaysia should not delay its shift to higher technologicalproduction or else it will lose out in the competition with othercountries in the region with lower labour costs.Navaratnam sees the Government’s decisive step in deporting troublesomeforeign workers immediately as a move towards stabilising the local labourmarket as well as to increase business and public confidence.Navaratnam, however, cautioned that the policy regarding foreign workersshould be sustainable and not implemented on an ad-hoc basis.“It should be spelt out clearly so that employers are convinced that theGovernment has a new policy on migrant labour.“If not, employers will hope that the new measure will eventually fadeaway and they can revert to the old and unproductive way of employingforeign labour,” he said.Economists also agree that reducing foreign workers will help reduce theoutflow of money from the country.RAM’s Yeah said between RM3 billion and RM4.8 billion are repatriated in ayear, given that there are one million migrant workers in the country.This is based on the assumption that these workers save half of theirearnings which range from RM350 to RM800 amonth. “It is quite a substantial outflow,” he noted.Another economist pointed out that money taken out by foreign workers fromMalaysia could be considerably more, considering that there is also a highnumber of illegal workers in the country.He estimates that the figure could well be above RM5 billion a year.As for helping the domestic consumption, Yeah said foreign workers dospend locally but their expenditure may not be that significant comparedto the local people.“They are in the low-income group and they do not establish households inthe country, so their spending will be quite small,” he said.National Union of Plantation Workers (NUPW), which represents 50,000permanent workers in the Peninsular Malaysia’s plantation sector like oilpalm, rubber and cocoa estates, has another view.NUPW general secretary A. Navamukundan said the sector’s dependency onforeign workers can be reduced if the quality of life in the estates canbe further improved.He said the locals are leaving the estates to seek better opportunitiesand living conditions in towns and cities.He feels that the Government has to play a role in upgrading the livingconditions in the estates so that the younger generation of workers willbe attracted to job opportunities in the sector.The task of providing basic amenities to workers and their families inestates should not be left solely to employers, he added.He also stressed that the current ruling of hiring Indonesian workers asthe last resort will only diversify the sources of foreign labour and willnot really address the country’s dependency on foreign workers.