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Zoos Victoria Creating Agricultural Trade War Amongst Friendly Nations

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Zoos in various states in Australia recently issued defiant statements defending their position to continue to allow NGOs to use their premises as campaign grounds to link the oil palm industry with orang utan habitat loss. Posters displayed by the NGOs on the cages housing the orang utans at the zoos were found to be offensive by a visiting Malaysian Tourism Minister as they contained insinuations which do not reflect the true situation of how orang utans have long been cared here in Malaysia.The controversy probably has increased the zoos gate collection but propagating lies about orang utans and the Malaysian oil palm industry would not be tolerated by Governments as they affect the livelihood of our oil palm farmers who are dependent on this crop as a source of income to feed their families.

Zoos Victoria and other related zoos should take note that orang utans colloquiums are organized regularly in Sabah, Malaysia. If any of the Zoo officials are interested in discussing progress and other aspects of the orang utans, they should register and participate in such colloquiums and offer their expert opinion for discussion with other renowned orang utan scientists. As reported at our earlier colloquium, orang utan conservation programmes initiated in the 1960s in Sabah have shown that the population of our orang utans has stabilised in parallel with the size of land that the state has gazetted for conservation as permanent forest reserve. The total area of the permanent forest reserve is approximately 50 % of the total area of the state, thus setting aside ample forest land for purposes of biodiversity conservation, habitat needs for wildlife and mitigation of global warming.

Orang utan is a national icon for our tourism industry especially for Sabah and Sarawak where these animals are indigenously found. It is highly unethical for zoos in Australia to use them as an icon for antagonizing the oil palm farmers. Millions of tourists come to Sabah and Sarawak to see genuine orang utans in the wild and at sanctuaries where they show up during feeding times unlike the caged enclosures in zoos in Australia where the orang utans are essentially prisoners.

We are aware that the Zoos are playing crony to the NGOs on a bigger plan to legislate for the labeling of palm oil to discourage its use in food in Australia. With the new minority government, the threat of such negative labeling to be approved will be significantly raised because of the influence of the green MPs in the coalition. Trying to block the flow of palm oil into Australia for food applications through legislative means may seem to be a small issue to the zoos which are partly funded by the state governments. However, palm oil is a major agricultural produce of Malaysia and Indonesia. Trade in palm oil is an important source of revenue for these countries and their farmers.

Australia should know the importance of promoting trade in agricultural products. Annually, Australian farmers exports RM389 million (2009)worth of live animals and meat to Malaysia in addition to the exports of huge amount of cereals. Malaysian farmers in exchange export (a lower amount) RM 306 million worth of palm oil to Australia. For many decades, governments and farmers from both countries have worked hard to establish a healthy growth in trade for their agricultural commodities, but this is now being jeopardized by campaigns carried out by Zoos Victoria and their cronies which could wreck the two-way friendly trade of agricultural products of both countries. Even if the zoos and their cronies are successful in persuading the Australian government to pass the discriminative labeling legislation proposal through parliament, and curtailing RM 306 million worth of palm oil from being freely used in food products in Australia, it is unlikely that orang utans will benefit from this exercise. Have they for a moment stopped to ponder that the oil palm farmers could very well ask their government to retaliate and Malaysia may have to look elsewhere for the supply of beef and live animals worth RM 389 million? It is also likely that Indonesian oil palm farmers will ask their government to join the retaliation and further damage could be inflicted to the beef and live animal trade as Indonesia is a bigger importer of beef from Australia as compared to Malaysia. Governments know better than to allow such a situation to occur as it affects their trade and government relations. Certainly, the Australian beef farmers Associations would not allow trade to degenerate and Zoos Victoria will be held accountable for such predicaments.

There are options to consider for the serious conservationists at Zoos Victoria . Orang utans sanctuaries are commonly found in the states of Sabah and Sarawak. Projects related to orang utan conservation can be proposed under the auspices of the Malaysian Palm Oil Wildlife Conservation Fund (MPOWCF) for consideration. All that needs to be done is to write in to MPOC with a comprehensive project proposal.

Alternatively, Zoos Victoria should focus on the conservation of the many endangered animal species in Australia because of habitat loss. For example, the Koala bears population is reducing rapidly, down to about 40,000 and the Cassowary birds are fast disappearing with a population estimated to be less than 1000 throughout Australia. The Cassowary birds would be far more interesting as a study option as compared to the orang utans. If you were to disturb their young, they can defend themselves by giving you a frontal kick which can be fatal! However, if the genes responsible for the big size of the Cassowary birds are transferred to chickens, the world could potentially have more meat supply. But if the Zoos in Australia are busy in their self-appointed role to campaign for our orang utans (which are already well cared for), and neglect to conserve their own Cassowary birds and allow them to go extinct, the world may miss a golden opportunity to improve on the poultry industry.

CPO price expected to do better in longer term

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CRUDE palm oil (CPO) price is likely to trade around RM2,500 a tonne, but could do better in the next few months, Malaysian Palm Oil Council (MPOC) chairman Datuk Lee Yeow Chor said.

"Cargo surveyors' reports show that January exports are 20 per cent higher than in December. With the recent floods in Sabah, output is affected and the multiplier effect on palm oil prices can be significant. "Therefore, prices are not likely to slide further and should find strong support at RM2,400 per tonne," he told reporters at an MPOC seminar in Subang Jaya, Selangor, yesterday.

"We're now entering the low seasonal output months of February and March. As stock levels deplete, it is foreseeable that prices could trade at a higher band of between RM2,500 and RM2,700 per tonne towards the middle of the year."

Yesterday, the third month benchmark palm oil futures traded on the Bursa Malaysia Derivatives market inched RM7 higher to close at RM2,452 a tonne.

Teoh Gim Meng, citing recent high stock levels published by the Malaysian Palm Oil Board, had a bearish outlook on palm oil prices in the short term.

A trader, analyst and broker with CIMB Group, Teoh said: "Last year saw a demand-driven market. But now, we see ample supply of vegetable oils in the global market. Argentina, Paraguay, Brazil and the US are experiencing record output of soyaoil.

"Prices could slide further and the next support level is at RM2,280 per tonne. If the downtrend persists, it could fall as low as between RM2,100 and RM2,150 per tonne. Don't forget: last year, the RM2,100 level was tested twice." On a longer term of four to six months, Teoh was just as hopeful as Lee that palm oil prices could rise to as high as RM2,700 a tonne.

Palm oil windfall tax to stay, for now

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THE government said the windfall profit tax on oil palm planters stays, dismissing calls for a review of the calculation of the levy."The Cabinet has decided that the windfall tax on palm oil be maintained for now," said Plantation Industries and Commodities Minister Tan Sri Bernard Dompok.

Oil palm planters via millers in Peninsular Malaysia are at the verge of having to pay a windfall tax via millers starting January 1 this year when palm oil futures traded above RM2,500 per tonne. The Malaysian Estate Owners Association (MEOA), which represents small-and medium-sized estates of more than 40ha, appealed to the government to review the current windfall tax formula. This is because the calculation of windfall tax assumes all planters make money when palm oil prices in the physical market surpass RM2,500 per tonne.


MEOA president Boon Weng Siew reportedly said it would be more justified if the windfall tax is on actual profits of audited financial accounts, like corporate tax. "This is because not every planter makes tonnes of money as the profitability of oil palm plantations depends on the age and productivity of the trees. A newly-replanted estate would still be losing money even if palm oil prices surpass RM3,000 per tonne."

Oil palm planters in the peninsular have to pay the windfall tax when palm oil prices go beyond RM2,500 per tonne in the cash market. Planters in Sabah and Sarawak, however, only need to pay the windfall tax if the price crosses RM3,000 per tonne.

In the last three weeks, palm oil prices fell as the US dollar strengthened against ringgit. Yesterday, the third month benchmark crude palm oil price slid a further RM62 to close at RM2,407 per tonne on the Bursa Malaysia Derivatives Market.

Asked if he is comfortable with the current palm oil pricing trading above RM2,000 per tonne, Dompok said, "At RM2,400, RM2,500 and RM2,600 per tonne, there's still a margin. Farmers and plantation owners should be happy. When they're happy, I'm happy."

Oil palm companies should build biomass power plants

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This newsreport was published in Berita Nasional Malaysia (Bernama) website.

SANDAKAN, 14 Jan 2010-- Large oil palm plantation companies are being encouraged to generate electricity using empty fruit bunches (EFB). This is to overcome the shortage of electricity supply in Sabah.

Minister of Energy, Green Technology and Water, Datuk Seri Peter Chin Fah Kui said the effort is important as the use of EFB can help overcome the shortage of electricity, especially on Sabah's east coast.

He said the oil palm industry in the state was among the biggest and surely the EFB from it can be recycled to generate electricity.

"If large plantation companies use EFB as one of the fuel sources to generate electricity for their factories, it will help in efforts to overcome power shortage problem in the state," he told reporters after visiting the Main Intake Substation at Buli Sim-Sim, Sandakan here today. The substation has 20 sets of mobile power generation sets with the ability to produce 20MW of electricity and has been operational since last year.

According to Chin, if necessary, it will be made mandatory for large plantation companies in the country to build biomass power generation plants to process the EFB at their respective factories.

"I will forward the proposal to the Minister of Plantation Industries and Commodities Tan Sri Bernard Dompok, as one of the long-term plans to overcome the shortage of electricity in Sabah," he said.


In Sabah, there are five biomass power generation plants processing the EFB and only three sell electricity to the Sabah State Electricity Board (SESB) under the Renewable Energy Power Production Agreement (REPPA). The three plants are Kina Biopower Sdn Bhd and Seguntor Bioenergy Sdn Bhd, both operating here and the other being, TSH Bioenergy Sdn Bhd in Tawau.

Palm biomass to ease Sabah power shortage

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My colleague, Jaswinder Kaur, reports on the need for the government to specifically incentivise biomass usage to generate renewable energy for the benefit of people living in Sabah.

SABAH produces over 30 per cent of the country's palm oil and should be able to generate renewable energy from the crop's waste, but initiatives to move into this direction must be policy driven.

Currently, there are not enough incentives for oil palm players to consider renewable energy as part of their business plans, said state government-owned POIC Sabah Sdn Bhd chief executive officer Dr Pang Teck Wai.

"The introduction of a biomass policy, driven by environmental concerns, is the way forward. There is no doubt we can generate renewable energy from palm oil mill effluent and empty fruit bunches, but it needs to be policy driven," he said in a statement yesterday.

Pang was commenting on Malaysian Palm Oil Board's suggestion of palm oil millers helping to ease Sabah's power shortage if the government provides better incentives for installation of methane gas capture facility to generate electricity at their mills.

Of the 410 palm oil mills in Malaysia, 117 are in Sabah. Mills emit methane from retention ponds after oil extraction. Methane or biogas can be trapped from the mill sludge to fuel steam turbines and generate power.

Pang said little of the oil palm biomass is being used for commercial purposes as selling empty fruit bunches is not a major part of a mill's income, and neither is there a serious enforcement of law to compel them to dispose of the bunches, a major contributor of methane gas.

He cited the example of Eco Biomass Energy Sdn Bhd, a South Korean investor at the Lahad Datu Palm Oil Industrial Cluster that is facing difficulties in getting biomass for its proposed biomass power plant. Two years have passed and the company is still unable to secure sufficient long term supply of empty fruit bunches, despite Sabah producing almost a third of the nation's palm oil.


The POIC Lahad Datu industrial park needs Eco Biomass Energy's plant to produce power, which can be supplied to a myriad of palm oil-related industries. Pang said a biomass policy will spell out government incentives and strict environmental requirements for the production of renewable energy.

"For example, the estimated RM6 million needed for mills to install biogas-capture structure - unless there are incentives or legislative requirement or both, not many mills will bother to capture methane from their palm oil mill effluent," he said.

According to Pang, there are only four power plants in Sabah that are powered entirely on empty fruit bunches, either raw or in fibre form, with two 10-MW facilities in Sandakan, one 7.5-megawatt plant at Felda Sabahat, Lahad Datu, and one 14-megawatt plant owned by public-listed TSH Resources in Tawau.

However, he said none of these were running at full capacity, either because of inconsistent biomass supply, or technological drawbacks, especially in the build-up of clinker in the boilers, which apparently was a problem unique to empty fruit bunches-burning.

Palm oil millers can help solve Sabah power shortage

Posted by Flora Sawita Labels: , , , , , ,

SABAH'S power shortage can be mitigated if the government provides better incentives for palm oil millers to generate renewable energy. There are 410 palm oil mills in the country, of which 117 are in Sabah. Mills emit methane from retention ponds after oil extraction.

"Estate owners can trap methane from the mill sludge to fuel up steam turbines and generate electricity, a renewable source of clean energy," said Malaysian Palm Oil Board (MPOB) chairman Datuk Sabri Ahmad.

"This is one of the cleaner alternatives for Sabah, instead of installing coal-fired power plants. Biomass and biogas technology is available now," he told Business Times in an interview in Petaling Jaya, Selangor.

"What we need is some financial assistance. Millers need around RM6 million to install methane gas trapping and steam turbine generators," he said.

From January 2010, the Ministry of Energy, Green Technology and Water pledged to facilitate RM1.5 billion worth of cheap loans via local banks for the provision and usage of green technologies. "Relatively cheap loans is a good start but matching grants can make a difference in solving Sabah's power shortage," he added.

Currently, utility giant Tenaga Nasional Bhd via its "Small Renewable Energy Programme" is offering to buy renewable energy at only 21sen/KWh. Another stumbling block is the lack of connectivity between neighbouring mills to the national grid. "If the government were to fund the hook-up and raise the price to 30sen/KWh, we can quickly realise this initiative among palm oil millers to benefit neighbouring rural communities," Sabri said.

A good role model is TSH Resources Bhd. Since 2005, it has been turning dirty methane gas emitted by its mills to clean energy. TSH's mills generate 14 megawatts (MW), of which they sell 10MW back to Sabah Electricity Sdn Bhd and keep 4MW for its own use.

Methane is one of the many polluting gas in the environment that contributes to global warming and depletion of the ozone layer. Therefore, trapping methane gas to generate electricity is an environmental-friendly initiative.

Next year the European Union (EU), a major biofuels consumer, will impose a target to only accept biodiesel that can reduce carbon dioxide emissions by at least 35 per cent versus fossil fuel, which risks cutting out palm oil which the EU considers to save only 19 per cent.

Sabri, who have just returned from Brussels, said the European Commission's Joint Research Centre - the scientific body responsible for the scientific and technical aspects of EU policy development - is likely to show higher savings for palm oil. "Having received our latest data gathered from 102 estates in Malaysia, the JRC (scientists) say palm oil could show savings of more than 19 per cent," Sabri said.

Plantation stocks set for uptrend

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Analysts are generally bullish on plantation counters in the short term given the shortage of workers on oil palm estates in Sabah, the country's biggest palm oil producer.

Shares of plantation companies bucked the broader market's fall yesterday after industry officials said that palm oil production could be hit by a serious lack of harvesters in the state.

"The market needs to be aware that labour is a growing problem for oil palm planters today, especially with the massive greenfield development in Indonesia over the last two years," KAF Seagroatt-Campbell Securities Sdn Bhd senior analyst Vince Ng said.

Among vegetable oils, palm oil is the most labour-intensive and productivity is also low. A worker can produce up to 20 tonnes of oil a year compared to up to 600 tonnes for US soyabean and UK rapeseed. It is also difficult to mechanise the harvesting process for palm fruits.

He raised his palm oil price target.

"We've upgraded next year's average palm oil price forecast to RM2,600 a tonne from RM2,400 previously. We have also raised our long-term palm oil price to RM2,200 from RM2,000."

We stay overweight on plantation," Ng said, adding that his top picks included Sime Darby Bhd, PPB Group Bhd, Genting Plantations Bhd, United Plantations Bhd, Hap Seng Plantations Bhd and Kulim Bhd.

Kenanga Investment Bank analyst Liong Chee How acknowledged that labour shortage in the industry was a longstanding structural problem, but over the last 18 months had become more severe.

"In view of the current high palm oil prices, the short-term solution is to offer higher salaries to skilled harvesters," he said. "In the longer term, planters will need to invest in mechanisation and automation wherever possible," he added.

Yesterday, palm oil futures on the Bursa Malaysia Derivatives Market rose the highest in six months to close at RM2,586 a tonne. On the stock market, IOI Corp Bhd, Negeri Sembilan Oil Palms Bhd and Chin Teck Plantations Bhd were among the top gainers.

Worker woes may hit palm oil earnings

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Malaysia could lose billions of ringgit in palm oil export earnings if a serious labour shortage in Sabah continues, industry officials say. The plantation sector in Sabah, Malaysia's most productive palm oil producer, has seen its workforce fall by a fifth recently, Malaysian Palm Oil Association (MPOA) chief executive Datuk Mamat Salleh said.

Checks with plantation companies revealed that more than 10 sizeable oil palm estates in the state did not have enough workers because those who had gone home to Indonesia for the Hari Raya Puasa and Haji holidays did not come back.

The main reason was that estates in Kalimantan were paying the same wages offered in Sabah, Mamat said.

"If foreign workers, comprising half of the 600,000 workforce in the palm oil industry, are reduced by 30 per cent, our country's palm oil export earnings could shrink as much as RM10 billion a year," he told Business Times in an interview.

Sabah produces seven million tonnes of palm oil a year, or 40 per cent of the national output.The palm oil industry earned a record RM65 billion in export earnings last year, thanks to high prices.

Two months ago, East Malaysia Planters' Association (Empa) chairman Othman Walat reportedly said that oil palm planters in Sabah and Sarawak might recruit workers from China, Bangladesh and the Philippines to make up for the shortage of Indonesian workers. However, other industry officials felt that it was easier said than done as other nationals did not prefer working on the estates, while Malaysians were under the mistaken assumption that the job did not pay well.

"But plantations these days are offering productivity-based salaries. A harvester, for instance, can earn between RM1,500 and RM2,000 a month, depending on the quantity and quality of fruit bunches he harvests."A family of three working together can earn up to RM3,000," Othman said.

Furthermore, the job offers housing, uninterrupted supply of electricity and piped water, medical, schooling and recreation facilities free of charge by the estate owners. These are now enjoyed by the foreign workers.

While, the MPOA understands and fully supports the government policy to employ more locals and enhance mechanised harvesting on the estates, the reality is far from expectations. Mamat said that young locals entering the labour market were just not interested in menial jobs like the harvesting of oil palm fruits.

"We do not want to be too dependent on foreign labour, but do we have any other feasible and practical alternatives?" he questioned.

Michelle’s wild about orangutans

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Actress Datuk Michelle Yeoh’s love for animals helped her form a special bond with orangutans, writes HIZREEN KAMAL.

MALAYSIA’S very own international actress Datuk Michelle Yeoh has always had a fascination for animals. Her father is a great animal lover and her family would always sit in front of the TV to watch documentaries and movies featuring animals.

Having been to Africa to observe wildlife in an open jeep at close range, this 47-year-old former beauty queen is quite comfortable in the company of a pride of lions just a few metres away.

While she returns to Malaysia as much as she can to visit her parents in Ipoh, Perak, she came back for a different reason recently — to film a 50-minute documentary titled Among the Great Apes with Michelle Yeoh, which tells of Malaysia's conservation efforts to protect orangutans which are among the planet’s most endangered primates.

The documentary was filmed at three main locations in Sabah — the Sepilok Orangutan Rehabilitation Centre, Kinabatangan Wildlife Sanctuary and Tabin Wildlife Reserve.

It was during the filming of the documentary that she felt a certain closeness with the primates.

Like most people, her first encounter with apes was at the zoo when she was very young. But filming the documentary opened Yeoh’s eyes to the world of primates as she had spent time being around them. “They are cute but, at the same time, they can be strong too. While there are people who would like to have them as pets, they belong in the wild.”

Yeoh, who is best known for her role in the 1997 James Bond film Tomorrow Never Dies and the multiple Academy Award-winning Chinese action film Crouching Tiger, Hidden Dragon, has never been this close to the apes before, but she has learnt to always be calm in the presence of wildlife. “We have to also understand their movements. Normally, they are not violent,” she said, when asked how she felt being near an ape for the first time.

During the filming, she adopted two baby orangutans — Sen and Michelle. “I choose the ones with the most colourful characters. Sen is quite the little rascal and he loves running around, while Michelle is a little sensitive as she doesn’t like to be scolded,” said Yeoh.

Yeoh is also in the country to shoot period costume martial arts thriller Jian Yu Jiang Wu. She acts opposite Korean heartthrob Jang Woo Sung. However, she hopes to a return to Sabah and visit her “babies”. “Even though I can’t be there physically with them all the time, I try to do my bit to help in any way I can. It is a privilege to help."

“I was fascinated with the idea when it was first pitched to me. I have always wanted to do something like this but never had the opportunity. As an artiste and celebrity, I think we are able to reach out to more people on conservation awareness and efforts to protect primates.

“I want to get down and dirty, and be on the ground with the animals.” While Yeoh may be super-fit, she finds it a feat when she had to climb a tree for one of the scenes. “It was like wall climbing. When we rehearsed to get the hang of it, it was not quite what I thought it was. The person who was teaching me was brilliant as I find it a challenge as I have a fear of heights.”

The filming took two weeks and Yeoh had a wonderful time seeing the wildlife. “We were advised not to be surprised if we could not see many wild animals, as they are shy.”

Yeoh also enjoyed watching Sepilok’s veterinarian Dr Cecilia Boklin and Sabah Wildlife Department chief veterinarian Dr Sen Nathan, who are practically the mother and father to the primates at the rehabilitation centre, try their best to work with the apes before releasing them back to the wild.

“During filming, we saw two orangutans making their journey back into the wild. As the apes went up the trees I can see the emotions in their faces. It was touching, and at the same time you felt a sense of pride.”

Yeoh is hopeful that the documentary will allow viewers to see the beauty of orangutans in the wild. “We need to protect these wonders. If we don’t, orangutans will go extinct.”

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