• Wednesday, January 29, 2020

India palm import curbs to start Malaysia, Indonesia price war - association

Discussion in 'China & Far East' started by Minho, Jan 14, 2020.

  1. Minho

    Minho BANNED

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    India palm import curbs to start Malaysia, Indonesia price war - association
    [​IMG]
    By Mei Mei Chu
    ,
    ReutersJanuary 9, 2020
    [​IMG]
    FILE PHOTO: A worker unloads palm oil fruit bunches from a lorry inside a palm oil mill in Bahau, Negeri Sembilan, Malaysia
    By Mei Mei Chu

    KUALA LUMPUR (Reuters) - India's restrictions on imports of refined palm oil will lead to a loss of market share for Malaysia and spark a price war with rival supplier, Indonesia, a Malaysian industry association said on Thursday.

    India, the world's biggest edible oil buyer, issued a notification on Wednesday amending imports of refined palm oil to "restricted", a move that industry sources said amounted to an effective ban.

    The move was seen as punishing Malaysia, India's main supplier of refined palm oil, for criticism of its policies by Mahathir Mohamad, the 94-year-old outspoken prime minister of Muslim-majority Malaysia. Indonesia is the world's biggest exporter of crude palm oil.

    - ADVERTISEMENT -
    The Palm Oil Refiners Association of Malaysia (PORAM) said the move meant Malaysia would now have to compete on crude palm sales to India, where Indonesia has traditionally been more cost competitive.

    "This puts Indonesia and Malaysia at loggerheads. There will be a price war between Indonesia and Malaysia, and we are at the losing end," said PORAM Chairman Jamil Haron told Reuters.

    "We can still sell crude palm oil, but now we need to compete with Indonesia."

    Haron said the restrictions on refined palm oil could be in the form of quotas and more regulations.

    Malaysia last year overtook Indonesia as India's biggest palm oil supplier after it won a lower duty for refined palm oil imports.

    The Southeast Asian neighbours account for 85% of the global palm oil production. Palm oil is Malaysia's biggest agricultural export, accounting for 2.8% of its gross domestic product and 4.5% of total exports.

    A Kuala Lumpur-based trader, who did not want to be named citing company policy, said Malaysia's exports would start falling from end-January after current contracts end.

    Malaysia exported an estimated 3.9 million tonnes of palm oil to India in 2019. Of this 2.04 million tonnes was palmolein which is used as a cooking agent, according to Refinitiv data.

    @Indos

    PORAM members include top industry players including Sime Darby Plantation, Cargill Palm Products, FGV Refineries, IOI Edible Oils and Wilmar Edible Oils.

    Malaysian Palm Oil Association Chief Executive Nageeb Wahab said the curbs on refined palm oil exports would benefit Indian refiners.

    Mahathir said in October India "invaded and occupied" Kashmir, a disputed mainly Muslim region also claimed by Pakistan. Last month, he said India was stoking unrest with its new religion-based citizenship law that excludes Muslims.
     
  2. Indos

    Indos PDF THINK TANK: ANALYST

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    Indonesia has anticipated this and has started producing biodiesel for its own demand since 2016. At this year our biodiesel has already had 30 % palm oil concentrate and next year we plan to introduce 40 % biodiesel. If we can further increase the palm oil concentrate into 50 %, it will reduce a lot of our palm oil export.

    Here is the news:

    Well Oiled: Indonesia Spares No Time With B40 Biodiesel Mix
    BY DIANA MARISKA

    JANUARY 09, 2020

    Jakarta. Indonesia continues its research and trial on a diesel fuel replacement, aiming for nationwide usage of B40, a mix of 40 percent palm-oil based biofuel and diesel fuel by next year, the Energy and Mineral Resources Ministry said on Thursday.

    The B40 is part of a medium-term strategy to reduce the country's dependence on expensive import of fossil fuel. The program will also ensure steady demand for crude palm oil (CPO) if the European Union goes ahead with its plan to ban import of palm-oil based biofuel in the next few years.

    Indonesia released an earlier version of the fuel mix, the B20, early last year and made it a mandatory substitute for regular diesel fuel. The upgraded B30 program was just released last month.

    The B40 has already had a trial run with an official release slated for next year.

    Energy and Mineral Resources Minister Arifin Tasrif said on Thursday that some engines encountered problems with their filter during the trial. However, the minister assured this was the natural effect of the rust-removing biofuel. After some time the engine would become cleaner and run more smoothly.

    Djoko Siswanto, the director general of oil and gas at the ministry, said the government's main challenge now is to manage the logistics and supply chain to ensure a constant stream of the B40.

    "We are selecting the most suitable [sources] for the green fuel CPO and identifying the best refineries," he said.

    Waiting for new refineries to be built to produce biofuel in large enough quantity to replace regular diesel would take too long. So for now the government is relying on existing refineries close to CPO sources to produce the biofuel, Djoko said.

    The biofuel program is expected to cut $4.5 billion in diesel fuel import this year. This expected to improve the country's trade balance which went down into the red last year.

    President Joko "Jokowi" Widodo also said the biofuel program provides a cushion for Indonesia in the face of EU's palm oil restrictions.

    "The European Union wants to ban our palm oil, but we are calm. We'll use it ourselves. Why should we export there?" Jokowi said on Thursday.

    Today, Indonesian palm oil accounts for about half of Europe's CPO market. The EU imports an average of 3.6 million tons of Indonesian palm oil worth 2.3 billion euros ($2.6 billion) every year in the past five years.

    "We are implementing a new business strategy so we won't have to depend on other countries again," Jokowi said.


    https://jakartaglobe.id/business/well-oiled-indonesia-spares-no-time-with-b40-biodiesel-mix
     
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  3. Nike

    Nike ELITE MEMBER

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    Well the bio diesel move will made Indonesia stay away from Middle East politic and economy influences, as Indonesia now opt to import fuel from USA lately and combined them with palm oil bio fuel we can cut off much of our dependen from them
     
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  4. lcloo

    lcloo SENIOR MEMBER

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    Well, we will have to follow Indonesia in making more biofuel for our motor vehicles. Alternatively, we could replant some of the oil palm land with Durians like Musang King that sold like crazy to China.

    We used to plant a lot of rubber trees, now most of them have been replaced by oil palm trees. We can do it again replacing these oil palm trees with fruit tress like Durian and others that have good market demands.

    Musang King Durian Driving up Prices in China
    The durian is so pungent that you can’t bring it on planes, public transport or into hotels across Southeast Asia – but Malaysia believes it has struck spiky, stinky gold with the Chinese market, encouraging agricultural and digital development as the fruit goes “from local to global.”

    According to Reuters, Malaysia is allocating thousands of hectares for the cultivation of musang king durian, transforming palm oil farms into plots of land for the “world’s smelliest fruit” as investment rushes in, following a surge in demand for the fruit from China.

    [​IMG]

    Meanwhile, the durian trade is set to move into the digital sphere, after Chinese e-commerce giant Alibaba’s shopping platform Tmall signed a memorandum of understanding with Malaysia’s BEHO Fresh last week.

    The deal will see BEHO Fresh sell frozen Mao Shan Wang or musang king durian – one of the most sought-after varieties of the fruit – to Chinese consumers on Tmall, with China Certification Inspection Group Malaysia acting as a third-party group to ensure quality control.

    Durian Harvests is expecting a 50 percent jump in durian exports by 2030, with the country aiming to compete with Thailand as China’s main source of the fruit.

    In 2017, China’s imports of durian grew by 15 percent, reaching 350,000 tons, or a value of 510 million U.S. dollars, according to United Nations’ data. Thailand is currently the biggest producer and exporter of durian in the world and accounted for 40 percent of China’s imports.

    Despite being featured in the “Disgusting Food Museum” in Malmo, Sweden last month, the durian has surged in popularity in China, with products on sale ranging from durian ice cream to durian pizza.

    Only one percent of China’s durian harvests imports came from Malaysia, with trade currently restricted to only durian pulp and paste. That is all set to change this year when Kuala Lumpur begins to export the entire fruit, with authorities anticipating musang king durian exports to China of 22,061 tons by 2030.

    Malaysia currently has 72,000 hectares of durian plantations, with a source from the Ministry of Agriculture (MOA) telling Reuters “planting durians is not just a hobby today as durians are considered ‘gold’ in the agriculture industry.”

    Lim Chin Khee, a musang king durian industry consultant, told Reuters that the industry “is transforming from local to global, large-scale farming due to the great demand from China.”

    According to Lim, major Malaysian palm oil producers have approached him with regards to cultivating durian. Earlier this year, the MOA began planting durian on the land of Felda, a state-owned palm oil company.

    Malaysian palm oil prices hit a 21-month low earlier this week, amid ongoing criticism of the crop’s role in climate change and deforestation.

    However, the World Wildlife Fund has also warned that Malaysia’s push for large-scale durian farming could have a “devastating impact” on the critically endangered Malayan tiger.
     
    Last edited: Jan 14, 2020
  5. Nike

    Nike ELITE MEMBER

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    You should, by the way rubber plantation still hold much of usage in heavy industry till today. The same with palm oil, they can be converted into many industrial substance including gliceryn
     
  6. CIA Mole

    CIA Mole FULL MEMBER

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    remember elephant afraid of mouse