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Last Updated: 17 July 2024

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KUALA LUMPUR (July 16): Crude palm oil (CPO) futures for the active months in 2024 are forecast to average between RM3,850 and RM4,000 per tonne on Bursa Malaysia, according to the Malaysian Palm Oil Association (MPOA).

In a statement on Monday (July 15), the association said this projection indicates a slight increase compared to the RM3,800 per tonne average witnessed throughout 2023, reflecting ongoing market dynamics and supply-demand balances in the palm oil sector.

MPOA said that in June 2024, CPO production figures from both the MPOA members and the Malaysia Palm Oil Board (MPOB) mirrored each other closely, with MPOA reporting 1.60 million tonnes and MPOB slightly higher at 1.61 million tonnes.

It said this represented a 5% decrease month on month but a robust 12% increase year on year.

The group said market sentiment points towards a potential total CPO production in 2024 exceeding 19 million tonnes based on Malaysia's first half of 2024 performance, which saw a notable 10% year-on-year increase to 8.88 million tonnes compared to 8.08 million tonnes last year.

It said this growth was predominantly driven by a substantial 19% rise in Peninsular Malaysia, offsetting a 5% decline in Sabah.

However, MPOA said concerns may arise for the second half of 2024, as reduced rainfall in the first half may impact future FFB and corresponding CPO production.

It said the ability of Sabah to bolster production in the latter half of the year will be pivotal in determining if the elusive 19 million-tonne mark can be surpassed.

Outgoing MPOA chief executive Joseph Tek Choon Yee highlighted the sector's distinctiveness, operating primarily in rural settings and relying on and being exposed to natural elements like rainfall and sunlight — and not in any assembly lines under a roof.

He said the oil palm trees are biologically robust and perennial, enduring for up to 25 years once planted.

“However, the sector faces unique challenges: crude palm oil (CPO) is a commodity traded at market prices, making producers price-takers rather than price-makers.

“Consequently, the industry cannot simply pass on rising costs to consumers. Investments are long-term, with returns fluctuating based on palm product prices,” he said.

Tek said the initial gestation period involves around three years with no income, followed by replanting only after more than two decades. The industry remains predominantly labour-intensive, relying heavily on foreign workers due to locals generally not aspiring for the low-skilled "3D" jobs set against no game-changing mechanisation breakthroughs as yet.

“Compounding these challenges are rising production costs, with the national average for CPO currently standing at RM2,800 to RM3,000 per metric ton,” he said.

https://theedgemalaysia.com/node/719148

Sumber : The Edge Malaysia

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Last Updated: 16 July 2024

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BINTULU (July 15): Sawit Permai Enterprise Sdn Bhd is making waves with their innovative ‘Madani MPOB F5 Improved’ fertiliser at the ongoing Sarawak Agrofest (SAF) 2024, taking place at the Old Bintulu Airport site until July 22.

Managing director Yeong Kui Po said the Madani MPOB F5 Improved fertiliser, part of the Malaysian Palm Oil Board (MPOB) F5 series, represents a significant leap forward for the country’s palm oil industry.

He added that the MPOB F5 series fertilisers are produced under licence by Briar Resources Sdn Bhd.

“Madani MPOB F5 Improved fertiliser represents a revolutionary product with state-of-the-art technology formulated by MPOB utilising Briar’s Advanced and Sustainable Series for Excellence (BASE) technology,” he told The Borneo Post.

Yeong added that the primary objective of Madani MPOB F5 Improved fertiliser is to reduce agricultural input costs, ensure consistent yields, strengthen knowledge sharing of the latest fertiliser technology, and enhance the performance of the Malaysian palm oil industry.

“Our close collaboration with MPOB aims to increase yields for small-scale palm oil farmers while reducing the presence of low-quality fertilisers in the market.

“With competitive pricing for Madani fertilisers, small farmers can enjoy significant economic benefits.

Consistent fertiliser application will not only generate higher incomes but also strengthen the financial stability of Sarawak,” he said.

Central to Sawit Permai’s offerings is BASE technology which significantly enhances crop yields through advanced nutrient delivery systems and optimised formulations, so as to improve nutrient absorption leading to healthier and more robust growth.

“BASE technology not only boosts productivity but also ensures sustainable practices by minimising chemical runoff and preserving soil health.

“By outperforming conventional fertilisers, BASE sets a new standard for agricultural excellence, achieving superior yields while promoting environmental stewardship,” said Yeong.

At Sarawak Agrofest 2024, visitors can explore Sawit Permai’s booth and witness firsthand the impact of BASE technology.

https://www.theborneopost.com/2024/07/15/sawit-permai-unveils-innovative-fertiliser-at-saf-2024/

Sumber : The Borneo Post

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Last Updated: 12 July 2024

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Deputy Minister of Plantation and Commodities Datuk Chan Foong Hin flanked by (from left) Malaysian Palm Oil Council CEO Belvinder Sron, Kuay Cheow Kwee from TPOZ, MPC senior undersecretary for palm oil and sago industries division Severinus Tukah, Kow Tiat Yong (KLK Oleo), Malaysian consul general in Shanghai Syed Farizal Aminy Syed Mohamad, Ku Kok Peng (KLK), Malaysian Palm Oil Board director general Datuk Dr Ahmad Parveez Ghulam Nadir and Xia Jian Jun (TPOZ).

SHANGHAI (July 11): Deputy Minister of Plantation and Commodities Datuk Chan Foong Hin on Wednesday officiated the launch of Kuala Lumpur Kepong Bhd's (KL:KLK) new high-purity fatty acids and glycerin plant in Zhangjiagang, Suzhou located in the Jiangsu province of China, bringing the facility’s annual processing capacity to 500,000 tonnes.

The oleochemical complex located on 58 acres of the third-tier city that is about 130km away from Shanghai is owned and operated by KLK’s wholly-owned Taiko Palm-Oleo (Zhangjiagang) Co Ltd (TPOZ). The expansion makes TPOZ one of the largest and most technologically advanced oleochemical production plants in China.

“TPOZ’s expansion is commendable and it’s important to highlight a Malaysian success story in China because this is a very competitive market. Not many companies could go overseas but a lot of companies that went abroad are from the plantation sector. I can safely say that Malaysia is the pioneer for this palm oil industry,” Chan said at the ribbon cutting ceremony on Wednesday.

TPOZ was incorporated in January 2004 while its first plant was commissioned in 2006.

It produces fatty acids, glycerine, soap noodles, triacetin and fatty acid esters. The products are used in various sectors such as daily chemicals, engineering plastics, rubber, textiles, paper, pharmaceuticals and coatings.

“Our journey began with the vision of becoming an integrated player in the oils and fats sector, both locally and internationally. The presence of our facility in Zhangjiagang has been pivotal in realising this vision. It has enabled us to cater to a growing market, catering to both domestic consumption and international export,” said Kow Tiat Yong, deputy CEO of KLK OLEO, KLK’s oleochemicals manufacturing division. 

“Our objective has always been clear: to enhance our production capacity and seize the opportunities presented by the burgeoning market in the People’s Republic of China, a country with a vast and dynamic economy,” he added.

KLK declined to disclose the capital expenditure for the new plant, saying it needed to preserve its position in China’s highly competitive oleochemical market. 

Chan was in Shanghai for a working visit to promote Malaysian palm oil and pepper.

The working visit was organised by the ministry, in collaboration with Palm Oil Research and Technical Service Institute of Malaysian Palm Oil Board.

https://theedgemalaysia.com/node/718549

Sumber : The Edge Malaysia

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Last Updated: 12 July 2024

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KUALA LUMPUR: The recent increase of foreign labour is anticipated to significantly enhance Malaysia's palm oil production this year and in the future. 

This increase follows the implementation of the country's Labour Recalibration Programme (RTK) 2.0, which allowed employers to hire foreign workers until May 31, 2024. 

Datuk Dr. Ahmad Parveez Ghulam Kadir, director-general of the Malaysian Palm Oil Board (MPOB), noted a positive correlation between labour and palm oil productivity.

Unquestionably, the recent rise in the number of foreign workers has increased production, he said.

"This can be seen in the first five months of 2024 with the rise in fresh fruit bunch (FFB) production," he told Business Times.

However, Ahmad Parveez believes that a sustainable and balanced approach is necessary, as the palm oil sector is heavily reliant on foreign labour. 

He noted that while foreign workers have helped boost production, MPOB is also focused on exploring and encouraging initiatives that can reduce this dependency in the long term. 

He said this includes improving mechanisation and enhancing local workforce participation.

Sunway University economics professor Dr. Yeah Kim Leng said that as one of the main sectors that rely heavily on foreign workers, the recent influx of foreign labour is expected to result in higher oil palm production.

He noted that the palm oil sector has been experiencing labour shortages since the COVID-19 pandemic in 2020–2022, causing production to decline. 

"Higher demand for unskilled labour is also evident in the pick-up in farming, construction, maiding, and other manual service activities," he said.

Sharing a similar sentiment, economic analyst Dr. Zulkufli Zakaria expects an increase in palm oil production correlating with the influx of foreign workers, not only from Indonesia but also from Bangladesh. 

He said the reason for dependency on labour is due to some work scopes, such as harvesting and plant maintenance, being difficult to mechanise. 

Hence, he noted that the influx of foreign labour could significantly increase the national palm oil industry.

"The numbers of foreign workers have always been high since before COVID-19. The plantation and construction industries have been dominant in attracting foreign labour, although recently farming has also shown an uptrend.

"In the palm oil industry, the number of foreign workers in Malaysia increased from approximately 2.1 million in 2022 to 3 million in 2023, making up almost nine percent of Malaysia's population.

"Since 2018, there has been a significant increase in the influx of workers for the palm oil industry in Malaysia, mainly from Indonesia.

"During COVID-19, there was a critical shortage of approximately 55,000 workers by December 2022. 

"Government efforts in August 2023 showed some recovery, reducing the shortfall to 41,733. Despite these efforts, turnover in this industry remains very high," he noted.

Risks of foreign labour dependency Ahmad Parveez said Malaysia's heavy reliance on foreign labour for its palm oil industry does come with certain risks. 

He said, for instance, that production can be disrupted if policies restrict the entry of foreign workers, as we saw during the pandemic when international borders were closed, leading to severe labour shortages and significantly affecting FFB production. 

In view of these risks, he said the government, with the support of industry players, is accelerating mechanisation programmes in order to reduce the sector's vulnerability caused by its high reliance on foreign labour.

Nevertheless, Ahmad Parveez said the government is indeed working on strategies to address this issue. 

"MPOB believes that any plans that are in the pipeline will surely be implemented gradually to ensure that production remains stable while we transition. 

"Our goal is to move towards a more sustainable and balanced workforce by incorporating initiatives such as mechanisation and enhancing local workforce participation," he said.

Meanwhile, Zulkufli mentioned that one of the biggest risks of foreign labour dependency is the outflow of funds from Malaysia, which could amount to billions of ringgit annually if each worker sends home only RM500 per month. 

He said this could, to some extent, negatively impact the government's efforts to strengthen the ringgit. 

"The second issue, following the first, is the social problems arising from the large numbers of foreign workers and polarisation issues. 

"Especially notable are those not from Southeast Asia; these differences in culture and ethical practices could exacerbate social tensions," he explained.

Nevertheless, Zulkufli said the government has made efforts to reduce dependency on foreign workers by adopting new technologies such as drones, self-driving vehicles, and automating labour-intensive harvesting processes. 

He noted that the government has also introduced local programmes to train local workers using new technologies and automation on plantations. 

"The government has allocated RM60 million for mechanisation and automation research for the palm oil industry in 2021.

"In line with that, the Mechanisation and Automation Research Consortium of Oil Palm (Marcop) was established with the aim of reducing foreign workers and, in return, increasing productivity and efficiency," he said.

Dr. Yeah opined that the palm oil industry is highly labour-intensive, especially in planting, tending, and harvesting activities. 

He said that despite decades- of research and development, the industry is still unable to mechanise and automate its fieldwork operations, especially at the harvesting stage.

"There are machines, including robots, available to perform these tasks and reduce reliance on foreign workers, but the costs remain prohibitive and outweigh the productivity gains. 

"The large plantation companies have been able to increase yields and productivity through mechanisation and process improvements, but the smaller plantations and smallholders are still largely reliant on foreign workers," he added.

As such, Yeah stressed the need for more concerted investment in research and development (R&D) and ongoing innovations by large firms. 

He said cost reduction is also crucial to achieving mass deployment of automation and labour-saving technology, which can reduce the country's dependence on foreign labour.

Improving foreign labour policies in the palm oil industry 

In terms of optimising foreign labour policies, Ahmad Parveez believes that the government has continuously been improving policies related to foreign labour for the betterment of all industries in Malaysia. 

He said the check and balance on achieving an optimal balance between local and foreign labour is regularly reviewed and adjusted through relevant policies.

"As the guardian of the Malaysian palm oil industry, MPOB believes that training programmes are crucial for improving the skills of local workers so that the gap left by foreign workers can be effectively filled. 

"Besides human development programmes, MPOB is also actively promoting the adoption of automation and mechanisation in oil palm operations. 

"The advancement in mechanisation and advanced agricultural technologies not only reduces the reliance on foreign workers but also decreases the dependence on manual labour as a whole and additionally improves productivity," he said.

He added that these efforts, combined with continuous policy improvements, aim to create a more sustainable and resilient palm oil industry in Malaysia.

Zulkufli, on the other hand, believes that optimising the benefits of foreign workers is a crucial effort that the government could undertake from time to time. 

However, he said research must be conducted after each policy's pre- and post-implementation phases to understand the efforts made. 

"These efforts include optimising benefits such as enhancing workers' rights as mentioned in international law, ensuring fair wages, safe working conditions, and access to healthcare. 

"They should also integrate training focused on agricultural skills and the use of modern technologies," he noted. 

Additionally, Zulkufli believes that employment contracts should be reviewed periodically to ensure they are updated based on changes in life and tasks. 

He said community integration programmes could potentially be introduced to reduce social problems, and highly skilled workers could have a pathway to permanent residency.

Meanwhile, Yeah noted that salaries, wages, and consequently labour costs are expected to rise faster as the country moves forward to achieve its high-income aspirations.

He said the anticipated increase in labour costs will act as a push factor for the industry to adopt technology and increase capital intensity.

Furthermore, he stated that the government is promoting industrial upgrading through greater deployment of digitalization and Industry 4.0 technologies, including robotics, drones, and smart devices. 

"These initiatives will not only reduce reliance on low or unskilled labour but also enhance overall industry efficiency and productivity.

"In the short term, flexibility in the recruitment of foreign workers is necessary to enable the industry to quickly adjust to fluctuations in production and demand," he said.

https://www.nst.com.my/business/economy/2024/07/1074927/foreign-labour-boost-%C2%A0help-palm-oil-production-year#google_vignette

Sumber : New Straits Times