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Last Updated: 20 March 2024

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KUALA LUMPUR (March 18): The mandatory general offer (MGO) by JAG Capital Holdings Bhd for KUB Malaysia Bhd, at 60 sen per share, has seen it obtain 163.82 million shares, equivalent to a 29.44% stake, in KUB.

This has bumped up JAG’s shareholding in KUB to 62.72% or 349 million shares, according to a statement issued by Maybank Investment Bank, on behalf of JAG.

JAG said in the circular to shareholders that it does not intend to keep KUB’s listing status if it secures 90% of all KUB shares, but would keep KUB listed if it secures between 75% and 90%.

JAG is controlled by Minister of Plantation Industries and Commodities Datuk Seri Johari Abdul Ghani, who holds a 98.75% stake in the company.

On Jan 9, 2024, JAG was obliged to make an MGO for KUB after it had bought 1.79 million KUB shares on the open market, which raised its shareholding in the listed entity to 33.28%.

Prior to that, KUB proposed a related party transaction to buy a 86.65% stake in cables and wire manufacturer Central Cables Bhd (CCB) from its major shareholder JAG for RM119.42 million, by issuing redeemable convertible preference shares.

Shares of KUB have traded largely range-bound between 50 sen and 60 sen in the last two years.  On Monday, the counter closed one sen or 1.7% lower at 58.5 sen, valuing it at RM326 million.

https://theedgemalaysia.com/node/705037

Sumber : The Edge Malaysia

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Last Updated: 20 March 2024

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KUALA LUMPUR: Malaysian Palm Oil Council (MPOC) expects a decline in crude palm oil (CPO) prices in April, ranging between RM3,800 and RM4,000 per tonne, from the current RM4,250, due to increased soybean supply from South America and the gradual rise in palm oil production within Malaysia.

"Palm oil prices were trading at a premium of US$40 to US$95 per tonne above soft oils in March.Therefore, a recovery in soft oil prices is anticipated in April to narrow the price spread," said MPOC in a note today.

CPO prices surged to a 12-month high on March 15, climbing nearly 10 per cent above the February closing price.

MPOC attributes this strong price trend in the first quarter of 2024 to the deficit supply growth dynamic.

In February 2024, Malaysian palm oil stocks continued their downward trend, dropping by 5.0 per cent to 1.92 million tonnes, marking their lowest level since July 2023, primarily driven by reduced imports and robust domestic consumption.

MPOC reported a staggering 70 per cent year-on-year decrease in Malaysian palm oil imports in the first two months of 2024, plummeting to 0.062 million tonnes, which only accounted for 6.90 per cent of total imports in 2023. 

Historically, Malaysian palm oil inventory heavily relied on imports for buildup. Hence, closely monitoring upcoming import figures is deemed crucial to gauge palm oil stock levels in Malaysia.

Strong domestic consumption also contributed to the decline in stocks, with January and February 2024 witnessing an 11.30 per cent growth compared to the same period in 2023. 

MPOC said Malaysia's palm oil stocks will not see any growth in March, particularly during the Ramadan month and production is not expected to increase until April and beyond.

As the low season for palm oil production concludes in March, it sees that palm oil prices may begin to reflect the recovery in production and inventory levels in April and May, potentially capping palm oil prices.

Moreover, the price premium of palm oil over soft oils widened in March, surpassing the prices of three major soft oils concurrently since February in the European market.

Furthermore, the recent announcement by the Indonesian Palm Oil Association regarding Indonesia's palm oil inventory of 3.14 million tonnes as of December 2023 further indicated tight palm oil supply. 

MPOC predicts that the combined palm oil stocks of Malaysia and Indonesia will be less than 5 million tonnes in February 2024.

In 2024, global palm oil production is expected to rise minimally by 0.11 per cent, while production growth for soybean oil, rapeseed oil and sunflower oil is projected to increase by 2.88 per cent, 3.48 per cent and 3.94 per cent respectively.

https://www.nst.com.my/business/corporate/2024/03/1027643/cpo-prices-fall-between-rm3800-rm4000-tonne-april-mpoc

Sumber : New Straits Times

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Last Updated: 20 March 2024

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A World Trade Organization (WTO) panel ruled earlier this month on a complaint brought by Malaysia against the European Union over the bloc's plans to phase out the import of palm oil as biofuel because of environmental concerns.

Malaysia, the world's second largest producer of palm oil after Indonesia, brought a case to the WTO in early 2021 against the EU, France and Lithuania.

The Southeast Asian country contested that the EU had violated international trade rules in its policy to phase-out the import of palm oil as a biofuel due to deforestation and emissions risks under the EU's second Renewable Energy Directive (RED II).

Indonesia also filed a case with the WTO but asked for it to be suspended a day before the result of Malaysia's case was announced.

What was the WTO decision based on?

The three-person panel voted by two-to-one in favor of the EU's ability make rules against imports of crop-based fuels for environmental reasons.

However, it also said that the EU was at fault for how it had prepared and published its policy, which amounted to "arbitrary or unjustifiable discrimination" against Malaysia.

Much of this revolved around how the EU defined its assessment of emissions, along with indirect land use change (ILUC), which measures the impact of diverting agricultural land previously designed for food production to biofuel production,

The WTO panel found the EU's study on the ILUC risk of palm oil, using data from 2008 and 2016, was potentially outdated.

It also said an arbitrary choice was made to assess emissions from palm oil production over a 10-year period, when palm trees usually survive for up to 30 years.

"There are deficiencies in the design and implementation of the low ILUC-risk criteria," the WTO panel noted in a 348-page report published on March 5.

EU relations with Malaysia, Indonesia at risk

One dissenting panelist also offered greater support to Malaysia's appeal that the EU policy is protectionist, since it is accused of singling out palm oil while overlooking the environmental impact of biofuels produced within Europe, such as rapeseed.

Chris Humphrey, executive director of the EU-ASEAN Business Council, said that the WTO ruling will be "viewed by both the EU and Malaysia as a victory given the mixed outcome."

"While we await the delayed WTO ruling on Indonesia's complaint on palm oil, it is clear that dialogue between the EU and these key ASEAN partners is the only way forward in dealing with the concerns that both Indonesia and Malaysia have," he added.

The EU Directorate-General for Trade said in a statement that the bloc "intends to take the necessary steps to adjust the Delegated Act."

The European Commission did not respond to requests for comment.

Daniel Caspaty, an MEP and chair of the European Parliament's committee on relations with ASEAN states, told DW that the WTO panel's findings "marks a significant moment in the debate on trade policy and environmental protection."

"This decision will undoubtedly have implications for the EU's relations with Indonesia and Malaysia, particularly concerning the palm oil dispute," he added. 

Caspaty said Europe must urgently find a resolution, as well as with other conflicts such as discussions surrounding nickel.

Reactions to WTO verdict

Malaysia's government responded to the WTO verdict as though it had emerged victorious.

Abdul Ghani, Malaysia's minister of plantation and commodities, called it a "vindication" of Kuala Lumpur's "pursuit of justice" for its palm oil sector.

Speaking to local media, he argued that the WTO ruling "clearly finds fault with the EU's rules on indirect land use change to ban palm oil biofuels," adding that it "also finds fault with the EU's approach to notifying and consulting with other economies when introducing new trade measures."

Indonesian policymakers, meanwhile, will take "cold comfort from headlines celebrating the ruling about discrimination," said Jakarta-based analyst Kevin O'Rourke from the consultancy Reformasi Information Services.

It remains to be seen whether Indonesia's president-elect, Prabowo Subianto, will alter Jakarta's stance around this issue when he enters office later this year.

Humphrey from the EU-ASEAN Business Council said he now hopes "the ruling draws a line under the dispute," and that the EU, Malaysia and Indonesia can now focus on working out their differences through the ad-hoc joint task force setup last year.

The task force last met in February and is expected to reconvene for more talks in September in Brussels.

EU should set 'realistic' standards for other countries

The EU is nearing the end of free-trade talks with Indonesia and has been in talks with Malaysia about restarting negotiations for a bilateral free-trade pact.

However, Brussels has recently come under attack from more third parties over how it classifies its rules related to deforestation.

For Jakarta-based analyst O'Rourke, greater clarity can benefit Indonesia and Malaysia.

"Unlike some of their competitors, the two nations are able to achieve compliance in many instances and that will constitute a form of competitive advantage over the long term. And, of course, without such rules, climate change will imperil these as well as all other countries," he said. 

This is likely to require the EU to alter how it approaches trade with partners.

Frederick Kliem, a research fellow and lecturer at the S. Rajaratnam School of International Studies in Singapore, said Brussels currently applies "a very detailed, highly bureaucratic approach to such matters."

"This is OK internally, where the EU is well understood, appreciated and policies are well communicated. This is, however, not the same for third parties," he added.

"If the EU does not moderate its high standards and make them more realistic for third parties to achieve, I fear it will be very difficult to achieve further free trade agreements."

https://amp.dw.com/en/eu-palm-oil-ban-malaysia-indonesia-seek-trade-justice/a-68606071

Sumber : Nature and Environment Malaysia

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Last Updated: 13 March 2024

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KUALA LUMPUR, March 12 — Natural rubber (NR) production slipped by 0.2 per cent to 30,273 tonnes in January 2024 from 30,342 tonnes in December 2023, said the Department of Statistics Malaysia (DoSM).

Year-on-year comparison, however, showed that NR output rose by 2.8 per cent from 29,451 tonnes in January 2023.

In a statement today, chief statistician Datuk Seri Dr Mohd Uzir Mahidin said 88.3 per cent of the production in January was contributed by smallholders and 11.7 per cent by the estates sector.

On inventory, he said total NR stocks grew by 6.5 per cent to 203,772 tonnes from 191,304 tonnes in December 2023.

He said rubber processing factories accounted for 92.0 per cent of the stocks followed by rubber consuming factories accounted for 7.9 per cent and rubber estates accounted for 0.1 per cent.

Mohd Uzir said Malaysia’s NR exports amounted to 43,111 tonnes in January, down 5.4 per cent from December 2023’s 45,591 tonnes.

China remained the main destination for NR exports, accounting for 32 per cent of total exports in January 2024, followed by the United Arab Emirates, which accounted for 13.5 per cent, Germany, which accounted for 13.0 per cent, the United States, which accounted for 7.3 per cent and India, which accounted for 6.3 per cent.

“The export performance was contributed by NR-based products such as gloves, tyres, tubes, rubber threads and condoms,” he said.

Mohd Uzir noted that gloves were the main exports among rubber-based products with a value of RM1.02 billion in January, a growth of 7.3 per cent from RM0.95 billion in December 2023.

According to DoSM, analysis of the average monthly price showed that concentrated latex recorded an increase of 8.9 per cent in January to 585.74 sen per kg, while scrap rubber increased by 7.4 per cent to 583.29 sen per kg.

“Prices for all Standard Malaysian Rubber (SMR) grades increased between 5.9 per cent and 8.8 per cent,” it said.

According to the Malaysian Rubber Board Digest in January 2024, the Kuala Lumpur rubber market showed a mixed trend throughout the month.

“Generally, the market sentiment was supported by favourable market fundamentals, especially tighter rubber supply due to wet weather in major rubber-producing countries,” it said.

— Bernama

https://selangorjournal.my/2024/03/malaysias-natural-rubber-output-eases-by-0-2-pct-in-january-2024-dosm/#google_vignette

Sumber : Selangor Journal