Tuesday, May 24, 2016

Food sector news (update 7): European Agency for Food Safety warns on contaminants in palm oil in its May report, insights into processed food reformulations and sustainability

We've been keeping an eye on the food and processed foods sector, and shall try to post up some on some interesting trends or shifts here. Note the billion dollar snacks! Some reckon Hot Pockets and its spin-offs are a $2 billion business. By comparison, Unilever's Magnum is over EUR 1 billion in annual sales.

Also check, Khor Reports' Food Watch http://khorreports-palmoil.blogspot.my/p/khor-reports-food-watch.html

31 Jan 2017: EU food safety body to look again at palm oil health risks

EU food safety body to look again at palm oil health risks, Jan 27, 2017 -- Barilla, Italy's largest producer of baked goods, eliminated palm oil after EFSA's opinion, but Nutella maker Ferrero mounted an advertising campaign to defend its use. EFSA scientists will take into account a report the World Health Organization (WHO) and the U.N. Food and Agriculture Organization (FAO) published in November....http://www.reuters.com/article/us-health-palmoil-eu-idUSKBN15B1YP

24 May 2016: European Agency for Food Safety warns on contaminants in palm oil in its May report, insights into processed food reformulations and sustainability

Editor's notes: 

  • The measure against palm oil shown in the EFSA report is much higher than any I've seen on the same issue from the industry. At a recent talk on food safety at MPOB several weeks ago, the differential was shown was much closer, about 3x (also having improved over time). There is a clear need to reconcile such a wide range of indicated measures on the 3MCPD issue. It would also be good to find out what the real story is on trace contaminants in processed oils and fats. Are there also other trace contaminants arising form the chemical (including hexane) processing of soybean and other oils? Palm oil is different in being physically (rather than chemically) processed, and it clearly needs to address the EFSA position.
  • Russia has removed the palm oil tax idea on concerns about raising prices.

For palm oil, the moment of truth has arrived written by Marta Strinati May 17, 2016... On May 3, the European Agency for Food Safety (EFSA) published a substantial report warning that the contaminants in palm oil are cancerous and genotoxic, meaning it causes damage to DNA that can be transmitted to children. For one of those toxins, 3-mpcd, the EFSA set a threshold of 0.38 micrograms per kilogram of body weight, a dosage which, today, has been largely exceeded by the population, especially by children, teens and even infants. According to EFSA’s opinion, the food industry made a last attempt to misinform, claiming that the processing contaminants have also been found in other refined vegetable oils. But the report is clear: Palm oil contains six to 10 times more.... Big Food has known for 12 years that the palm oil used in food carries with it toxic and cancerous contaminants. Documents from the authorities and multinational food producers clearly show that the risks connected to consumption of low-quality vegetable fat were known. Those parties discussed possible solutions, but never offered up a remedy....But the rainforests are far away, and saturated fats aren’t very scary. Knowing that a food eaten so much by children contains substances that cause cancer has set, again, the spotlight on the battle against palm oil.... http://ilmanifesto.global/for-palm-oil-the-moment-of-truth-has-arrived/

Big brands are pushing up on reformulations - Nestle reports for 2014 6,973 products with reduced sodium, sugars, trans-fat, total fat, calories or artificial colourings (up from 3,317 and 4,221 number of products changed in 2012 and 2013). Reducing sugar and fat in ready-to-drink products (product example: 54% total sugar reduction, 45% total fat reduction, 25% more protein), substitute partially hydrogenated oil with high oleic soybean oil (product example, 45% SFA reduced, 25,800 tonnes oil substituted and 9,900 tonnes trans fat removed), full fat ice cream case study (new mix recipe: -28% fat, increased protein content, no starch), instant noodle case study (15% sodium reduction whilst improving taste, 50% SFA reduction through pre-drying and oil blend optimization), micronutrients (example, biofortification of maize, cassava, what etc). 

Source: Nestle presentation, December 2015

18 April 2016: Food safety issues in veg oils, Russia mulls tax on sugar and palm oil?

Editor's note: In AmBank news update, "Putin said that Russia should consider labelling palm oil products. As an alternative, Russia may consider an excise duty on palm oil products." A reader who checked with Russia trade specialists said that is not true. At an annual televised call-in, a question on putting cigarette-style health warning on palm oil products, Mr Putin replied that it not clear that palm oil is quite as bad as tobacco.

Vladimir Putin: $2bn linked to Panama Papers was spent on expensive classical instruments - and what else we learnt from Russian President's phone-in by Roland Oliphant, moscow  14 APRIL 2016; .... Intermission II: Cows, sanctions and unhealthy palm oil: Another intermission, this time to a cattle farm. The farmers have two questions: first, what happened if Western sanctions against Russia are cancelled, and consequently Russia's retaliatory embargo on Western food. That measure has been a boon for Russian farmers, allowing them to squeeze into sectors, including cheese, that had been dominated by foreign imports..... The second question is a request to put cigarette-style health warnings on palm oil products. Mr Putin says he doubts sanctions will be cancelled soon, but that "other support" may be considered for farmers when they are. And it is not clear that palm oil is quite as bad as tobacco, he adds. http://www.telegraph.co.uk/news/2016/04/14/vladimir-putins-phone-in-with-russia/

Russian Government to Introduce Tax on Sugar and Palm Oil The Moscow Times Feb. 05 2016; ... The list of goods subject to the new tax include palm oil and sugary drinks. The list may also include electronic cigarettes, potato chips and other products with high levels of fat and sugar, two unidentified federal officials told Vedomosti. The idea was supported by Russian President Vladimir Putin, both officials said..... According to an unidentified representative of the Ministry of Economic Development, the issue is already being developed. “We have the instructions from the government on this subject and in the near future (within a few weeks) will present suggestions and calculations,” he was quoted by the newspaper as saying. The representative pointed out the new measure is aimed not only at bringing money into the federal budget but also at reducing the consumption of products with high levels of sugar and fat.... http://www.themoscowtimes.com/business/article/russian-government-to-introduce-tax-on-sugar-and-palm-oil/558796.html

At MPOB PAC Forum, 14 April 2016, a presentation by Prof Dr Aishah on food safety issues, and a useful slide on edible crud oil risk matrix - pesticids, PAH, mineral oil, dioxins and PCBs and heavy metal (lead):

22 June 2015: India  PepsiCo to cut down salt, sugar content in packaged foods and FSSAI setting up an expert committee to regulate salt, sugar and fat in foods

PepsiCo to cut down salt, sugar content in packaged foods By Ratna Bhushan, ET Bureau | 22 Jun, 2015; NEW DELHI: PepsiCo has stepped up work on reducing salt and sugar in the beverages and snacks it sells in India amid growing public concern over high levels of some ingredients in packaged
foods available in stores.  The US-headquartered food and beverage giant is likely to roll out the refined products ahead of schedule, executives aware of the development said. Last week, the Food Safety & Standards Authority of India (FSSAI) had said that it is setting up an expert committee to regulate salt, sugar and fat in foods ..

28 May 2015:  The rising distrust of Big Food (largest 25 companies saw their control slip from a combined 49.4% share in 2009 to 45.1% share in 2014) and the beef-leather consumption divergence

Big Food's Big Problem: Consumers Don't Trust Brands - Industry Giants Shift Strategy To Win Back Health-Focused Americans By E.J. Schultz.   Published on May 25, 2015;
This rather unappetizing statement was tucked into a request for proposals recently sent to ad agencies: "Most of our food supply comes from factory farms, is dependent on GMOs and chemicals, and is not sustainably grown or raised." The inflammatory language sounds like the typical musings of a fiery activist ready to take on Big Food. But it actually came from the Kashi brand owned by industry giant Kellogg Co. The brand is seeking ideas to "re-establish our identity in the natural foods movement." The RFP, which was recently obtained by Ad Age, is a small but telling example of how the food industry has been shaken from its core, forced to reinvent itself in the face of shifting consumer demands. Families once reliably heaped their plates with products such as Stove Top stuffing from Kraft Foods, Hamburger Helper from General Mills and Kellogg cereals, along with similar products from other processed food titans. But now those consumers are increasingly migrating to smaller, upstart brands that are often perceived as healthier and more authentic.....The rapidly shifting tastes have forced executives into taking some dramatic steps. They are racing to reformulate iconic products like Kraft's Mac and Cheese, while acquiring smaller brands in hopes of reinventing themselves to appeal to today's finicky consumers. But their search for growth comes amid intense pressure to cut costs as bottom-line focused private equity firms such as 3G Capital lurk.
Some $18 billion in sales have shifted from large to small companies from 2009 to 2014 across all consumer packaged good categories, according to report by Boston Consulting Group and IRI. Credit Suisse recently isolated the changes in market share among food and beverage companies and found that the largest 25 companies saw their control slip from a combined 49.4% share in 2009 to 45.1% share in 2014. Their "dominance of the core U.S. market seems to be slowly eroding," Credit Suisse stated in a report..... http://adage.com/article/cmo-strategy/big-food-falters-marketers-responding/298747/

Your Salad Lunches Are Killing American Leather - Diets and droughts have made cattle hide more expensive, creating a leather shoelace crisis May 27, 2015 by James Tarmy; “Two years ago the hides cost me $50, and that didn’t seem so bad. But now they’re $112,” Howlett sighs. “Twelve bucks starts to feel like a pretty raunchy deal.” As a middleman between cattle ranchers and shoe sellers, Howlett has limited ability to pass along her rising costs. Auburn’s sales have begun to decline, to $19 million in 2014 from $20 million the year before, and net profit has been cut in half.
Leather has always been a byproduct of the meat industry, and as Americans’ beef consumption grew over the 20th century, the leather industry grew with it. The past three decades, though, have seen a decline of about 28 percent in Americans’ appetite for beef, and the supply of hides has dwindled accordingly. At the same time, drought in the Midwest has pushed up feed prices. The result is that America has fewer and more expensive cows. Meanwhile, the world’s consumers still want leather goods.... http://www.bloomberg.com/news/features/2015-05-27/your-salad-lunches-are-killing-american-leather?cmpid=BBD052715

19 April 2015: Fight for $15 minimum wage and unionization may raise fast food prices; zero food price inflation may trigger supermarket price war and more according to Citi Research, Majority of Australia sold packaged foods found to be unhealthy, Coles fined A$2.5 m for 'fresh' bread claims

Burger King Founder Says Higher Wages Could Kill Off ‘Dollar Menus’ by Nolan Feeney @NolanFeeney   April 15, 2015  “I see a lot of $10 hamburgers arriving on the scene,” David Edgerton says. Burger King co-founder David Edgerton says fast food workers pushing for higher wages could spell the end of the “dollar menu,” and usher in an era of higher-quality, more expensive convenience restaurants. Edgerton, 87, spoke to TIME on Wednesday as fast-food workers around the world staged protests and strikes—some at Burger King locations—as a part of the “Fight for $15” campaign, which calls for a $15 per hour minimum wage and the right to unionize. “What’s going to happen, really, is you’re going to see less and less of the quick and dirty kind of places,” said Edgerton, who founded the fast food giant with James McLamore in 1954 and now serves on the board of Avantcare, a company that makes nutritional products to help treat addiction. “You’re not going to be able to run these places [paying workers] $15 an hour or whatever it will be.”... http://time.com/3823384/burger-king-founder-minimum-wage-mcdonalds-protests/?xid=newsletter-brief

Next blow for Woolies, Coles: zero food price inflation Apr 15 2015| BRISBANE TIMES| Stalled prices for goods such as wheat, sugar and dairy are likely to cost Australia's supermarket giants more than a price war, according to Citi Research.... http://www.afr.com/markets/commodities/agriculture/next-blow-for-woolies-coles-zero-food-price-inflation-20150414-1mkh5e

Majority of packaged foods found to be unhealthy Down Under 13 April 2015 http://mobile.foodnavigator-asia.com/Markets/Majority-of-packaged-foods-found-to-be-unhealthy-Down-Under/?utm_source=newsletter_daily&utm_medium=email&utm_campaign=14-Apr-2015&c=g5U1F%2FHXoYolJTQnOm2tj2KnTMZZv3qc#.VTMgcJ2wqTN
Coles fined A$2.5 m for 'fresh' bread claims 10 April 2015 http://mobile.foodnavigator-asia.com/Policy/Coles-fresh-bread-claims-Fined-A-2.5m/?utm_source=newsletter_daily&utm_medium=email&utm_campaign=14-Apr-2015&c=g5U1F%2FHXoYoCEJZoZiNQwvxcC%2Bf8IObS#.VTMgbZ2wqTN

14 March 2015: Ferrero plans first factory in China

Ferrero plans first factory in 'strategic' Chinese market 11-Mar-2015; Mars holds a 39% value share of the Chinese chocolate market, but lost some ground in 2014 to Ferrero and Hershey, both of which grew their share to 12%, according to Euromonitor International.... Local news reports claim the Xiaoshan factory will produce 30,000 metric tons of chocolate and candies annually... According to Euromonitor, Ferrero has doubled chocolate sales in China over the past five years ot reach $190m in retail value sales in 2013...the firm currently manufactures toys for its Kinder brand in China, but products are imported from outside the country. Ferrero operates 20 plants worldwide including ones in India, Russia and Australia...Euromonitor expects a further $1bn of sales in chocolate confectionary in the next five years, representing a compound annual growth rate of 7%... Euromonitor recently wrote: ".. seasonal products and a culture of gift giving are prevalent in the Chinese market, which makes it a particularly conducive market for both Lindt and Ferrero.... "

16 February 2015: Ferrero patriarch - "the richest candy man on the planet" - dies at age 89; Milka-Cola premium milk beverage

World’s Richest Candy Maker and Nutella Founder Died on Valentine’s Day by Maya Rhodan @m_rhodan   1:15 PM ET; Owner of Italian chocolate company Ferrero dies at age 89. Michele Ferrero was the patriarch of the Ferrero family, whose company spawned Ferrero Rocher chocolates
Ferrero’s father created what would later be widely known as Nutella during World War II when cocoa was in short supply. He used hazelnuts to stretch the little chocolate he had. Years later, Nutella is among one of the most beloved treats in Italy and across the world. Forbes described Michele as the “richest candy man on the planet.”.... http://time.com/3710479/michele-ferrero/

Got Coke? Soda maker starts selling 'premium milk' by Associated Press February 3, 2015, 4:02 PM
Coca-Cola is coming out with premium milk that has more protein and less sugar than regular milk. And it's betting people will pay twice as much for it..... The national rollout of Fairlife over the next several weeks marks Coke's entry into the milk case in the U.S. and is one way that the world's biggest beverage maker is diversifying its offerings as Americans continue turning away from soft drinks.... It also comes as people increasingly seek out some type of functional boost from their foods and drinks, whether it's more fiber, antioxidants or protein. That has left the door open for Coke to step into the milk category, where the differences between options remain relatively minimal and consumption has been declining for decades.... "It's basically the premiumization of milk," Sandy Douglas, president of Coca-Cola North America, said at an analyst conference in November. If developed properly, Douglas said, it is the type of product that "rains money.".... Fairlife, which Coca-Cola formed in partnership with dairy cooperative Select Milk Producers in 2012, says its milk goes through a filtration process that's akin to the way that skim milk is made. Filters are used to separate the various components in milk. Then more of the favorable components are added, while the less desirable ones are kept out. The result is a drink that Fairlife says is lactose free and has 50% more protein, 30% more calcium and 50% less sugar than regular milk.... The same process is used make Fairlife's Core Power, a drink marketed to athletes that has even more protein and calcium than Fairlife milk..... http://www.latimes.com/business/la-fi-coke-milk-20150203-story.html

11 February 2015: PepsiCo and Coca-Cola show North Am growth to offset ROW slowdown; news links on food sector giants - Coke, Pepsi, McD, Unilever, General Mills, Mondelez/Kraft, Nestle... headlines on USD impact, earnings drag on demand in recent months

 PepsiCo’s Fourth-Quarter Profit Tops Analysts’ Estimates 'By' Duane Stanford 8:11 PM AWST  February 11, 2015 (Bloomberg) -- PepsiCo Inc., whose stable of brands includes beverages and the Frito-Lay snack division, posted fourth-quarter profit that topped analysts’ estimates even as currency headwinds eroded sales.... PepsiCo generated organic sales growth of 5 percent last quarter, helped by gains at its snack and beverage businesses. While currency fluctuations turned that increase into a 1 percent drop, the results showed overlying strength at the company. It also pledged to return $8.5 billion to $9 billion to shareholders through dividends and share buybacks in 2015..... PepsiCo right now has a lot of momentum,” Chief Financial Officer Hugh Johnston said in an interview. The company has increased U.S. sales by $1 billion, lifted by new products such as Naked Juice Kale Blazer and Mountain Dew Kickstart, Johnston said..... New products now account for 9 percent of sales, compared with 7 percent earlier years ago, a sign the company’s innovation push is paying off.
Chief Executive Officer Indra Nooyi also has forged a truce with activist investor Nelson Peltz’s Trian Fund Management LP, who had insisted she split the company’s snack and beverage businesses.....  Coca-Cola also beat estimates with its fourth-quarter results on Tuesday, saying that North American growth was helping offset a slowdown in the rest of the world..... That’s the case with PepsiCo too, Johnston said..... Overall, currency will reduce earnings growth by 7 percent this year, PepsiCo said. The company expects organic sales growth in the mid-single digits.... http://www.bloomberg.com/news/articles/2015-02-11/pepsico-profit-tops-estimates-after-growth-offsets-currency-woes

Unilever Profit Rises Despite China Sales Slump - Consumer-Goods Group Reports 6.8% Rise in Full-Year Net Profit on a 2.7% Fall in Revenue, By  Peter Evans; LONDON—Unilever PLC said weakening demand in emerging markets, especially China, has showed no sign of firming up this year even as the consumer-goods group reported a rise in profit in 2014... “There are still huge amounts of uncertainty in the world,” Jean-Marc Huët, Unilever’s chief financial officer, said Tuesday. “We’re not going to be too bullish at this time.”... http://www.wsj.com/articles/unilever-profit-rises-despite-china-sales-slump-1421739275

Coke Says 2015 Will Be a ‘Challening Year’ - WSJ

55% - The decline in Coca-Cola’s fourth-quarter profit, which was pulled down by weakening foreign currencies and one-time charges. The company warned that overseas business conditions could worsen this year. .. http://tk.wsjemail.com/track?type=click&enid=ZWFzPTEmbXNpZD0xJmF1aWQ9Jm1haWxpbmdpZD01NjkyNDMxJm1lc3NhZ2VpZD04Njg5MDAmZGF0YWJhc2VpZD02ODIwMDAmc2VyaWFsPTE2OTY1MzQ1JmVtYWlsaWQ9eXVsZW5na0BnbWFpbC5jb20mdXNlcmlkPXl1bGVuZ2tAZ21haWwuY29tJnRhcmdldGlkPSZmbD0mZXh0cmE9TXVsdGl2YXJpYXRlSWQ9JiYm&&&1012011142&&&http://www.wsj.com/articles/coke-says-2015-will-be-a-transition-year-1423572751?mod=djem10point

Pepsi Traders Brace for Dollar Impact on Overseas Sales: Options  Earnings -  Feb 10, 2015; 
rating on the stock, said by telephone Feb. 5. “Pepsi in particular has large exposure to volatility in Russia.” PepsiCo Earnings Analysts forecast PepsiCo on Wednesday will say fourth-quarter net...

What McDonald's Problems Say About American Taste  industries -  Jan 30, 2015  
invented the concept of fast food. It promised meals that were inexpensive and convenient, that could be eaten on the go and even with one hand while driving. The food wasn't necessarily healthy...

Unilever Sees No 2015 Improvement; Sales Miss Estimates  Jan 20, 2015; Unilever, whose detergents and deodorants are used by 2 billion consumers daily, said full-year performance will be similar to last year after posting quarterly sales growth that trailed analysts’...

General Mills Falls as Slump Prompts Company to Cut Forecast; General Mills Inc., the maker of Cheerios, Bisquick and Yoplait, fell 3.6 percent after slow growth in emerging markets and a lingering slump at home forced the company to cut its forecast. Earnings...

Mondelez’s Cost Cuts Fuel Profit Gains Amid Sluggish Demand  - Earnings -  Nov 5, 2014  
pressure for cutbacks at the company. Mondelez named Peltz to its board in January after Peltz’s Trian Fund Management LP abandoned a proposal for Mondelez to merge with PepsiCo Inc. to spur growth... http://www.bloomberg.com/news/articles/2014-11-05/mondelez-tops-quarterly-earnings-estimates-increases-forecast

Nestle’s Shocking Miss Puts 5% Growth at Risk: Cox  Asia -  Oct 16, 2014; Jon Cox, head of Swiss equities at Kepler Cheuvreux, examines results from Nestle as nine-month sales failed to meet expectations and looks at the economic factors in Asia and Europe that may...

Nestle Revenue Misses Estimates Amid Price Pressure  Europe -  Oct 16, 2014  
Nestle reported nine-month sales that missed analysts’ estimates as deflationary pressure eroded revenue in Europe, providing a setback for the world’s biggest food company in reaching its full-year... http://www.bloomberg.com/news/videos/2014-10-16/nestle-revenue-misses-estimates-amid-price-pressure

Low Oil Is a Help to Consumers: MacDonald  Oil -  Jan 15, 2015  
Allianz Global Investors CIO Global Equities Lucy MacDonald discusses the consumer goods sector in Asia, India's surprise rate cut, and the strengthening U.S. dollar with Bloomberg's Stephen...

23 October 2014:  MCD regionalism, Hot Pockets  & food stamps

McDonald's Discovers Its Inner Locavore and Learns to Love Regionalism By Venessa Wong, October 22, 2014; "McDonald’s (MCD) is taking a new approach to its menu, and it’s all about you... “Customers want to personalize their meals with locally relevant ingredients,” McDonald’s Chief Executive Don Thompson said on Tuesday, after the fast-food giant again posted disappointing earnings. Starting in January, he said, McDonald’s will simplify the core menu to highlight popular items, cut back on items that don’t sell well, and begin to allow regional groups of franchisees to offer more localized versions of burgers, beverages, and chicken and breakfast items...." http://www.businessweek.com/articles/2014-10-22/mcdonalds-discovers-its-inner-locavore-as-sales-struggles-continue?campaign_id=DN102214

Every Food Trend Goes Against Slumping Hot Pockets, Even Government Spending By Venessa Wong, October 22, 2014; "Just about every major food trend is working against Hot Pockets, and Nestlé (NSN:VX) clearly knows it has a problem brand on its hands.... The company tried to revive its line of microwavable meat pouches last year with a foodie makeover, boasting of “premium cuts of meat” and “real cheese” in the new and improved version. But even these quasi-gourmet touches can’t mask the fact that Hot Pockets are processed food sold at a time when consumers are seeking freshness at the expense of frozen options. A beef recall earlier this year also hit Hot Pockets, putting the product at odds with increasing consumer focus on food safety.... Now executives at Nestlé are pointing to another factor in the long-running Hot Pocket cold streak. A temporary boost in federal food-stamp assistance that was introduced in 2009 was allowed to expire in late 2013. Recipients of the Supplemental Nutrition Assistance Program (SNAP) benefits are ”a big part of the consumption of this particular product,” said Chris Johnson, executive vice president of Nestlé Business Excellence, during a sales call last week.... “For our Hot Pockets brand, it was not surprising to understand the value our products offered to the SNAP consumer,” said Molly Fogarty, Nestlé vice president for government relations, wrote in an e-mail. A two-pack of Hot Pockets costs about $2.50, she said, and the 12-count package, for around $11, is even more economical.... Reductions in the food-stamp program haven’t just affected Hot Pockets. Such large grocers as Wal-Mart Stores (WMT), which gets roughly 4 percent of its revenue from food stamps, have also said the SNAP reductions have hurt their U.S. business...." http://www.businessweek.com/articles/2014-10-22/behind-the-hot-pockets-slump-nestl-battles-every-food-trend#r=lr-sr

Nestle: Inside the Hot Pocket Plant; http://www.youtube.com/watch?v=23Tn1kOlyR8

Factoids: Hot Pockets Nutrition, http://caloriecount.about.com/hot-pockets-nutrition-m1493 
Calories in Pepperoni Pizza, 290 calories with 99 calories from fat; http://en.wikipedia.org/wiki/Hot_Pockets cites this: Hot Pockets were invented by Paul Merage and David Merage in the 1970s. They founded the company Chef America Inc. and began producing Hot Pockets in 1983. In 2002 Chef America was sold to Nestlé, and (as of 2012) Hot Pocket products are "now a $4.5 billion category of frozen sandwiches and snacks."

Sunday, May 22, 2016

Peat (update 3): Norway to develop peatland-friendly agriculture in Indonesia, Haze Can Only Be Overcome Through Peat Soil Management - Dr Lulie Melling, MOEF 50 boreholes, US$67 million in grants for peat lands restoration

26 May 2016: Haze Can Only Be Overcome Through Peat Soil Management - Dr Lulie Melling

Haze Can Only Be Overcome Through Peat Soil Management, Says Expert MEDAN, May 21 (Bernama)...Dr Lulie Melling said the cooperation would also help solve the haze problem which has affected the socio-economy and health of citizens in the region. "One of the most appropriate methods to resolve the problem of peat fires is by compacting the soil using excavators and this will consolidate the peat soil. "Consolidating the soil will increase the soil bulk density and increase the moisture holding capacity of the soil. The moisture content of the peat soil is increased via a better capillary rise of the soil, thus, at the same time, it will moisten the peat to prevent the occurrence of fire," she told Bernama here recently.....  http://www.bernama.com/bernama/v8/newsindex.php?id=1248103#.V0GChQKeIvQ.facebook

12 May 2016: Norway to develop peatland-friendly agriculture in Indonesia, MOEF 50 boreholes, US$67 million in grants for peat lands restoration 

Norway to develop peatland-friendly agriculture in Indonesia, 4 Mei 2016, "Well help Indonesia in mastering how to cultivate plants without drying the peat lands, and how to increase the value added of the plants. There are some plants that can grow without drying the peat, such as sago," Traavik said here on Tuesday.... He added that the Norwegian government will also help to market the commodities produced through peat-friendly agricultural practices.... The Ambassador said in principle, Norway is ready to support all efforts to prevent damage that land and forest fires cause. According to him, the important thing to prevent forest fires, especially in peat lands, is not to let the lands dry up. "If the land becomes dry, then no technology in the world can cope with it. And if it burns, Indonesia will have a very big problem," he explained... During the visit, the ambassador, the agency, as well as the representatives of the Indonesian Ministry of Environment and Forestry inaugurated 50 boreholes which serve to moisten the lands. Earlier, in February 2016, the government of Norway had allocated a grant of US$50 million to help the peat lands restoration program in Indonesia. Meanwhile, the US government has also allocated a grant of $17 million.... http://www.antaranews.com/en/news/104461/norway-to-develop-peatland-friendly-agriculture-in-indonesia

2 March 2016: MPOC paper 'A Historical Perspective of Peat Exploitation in Europe and its Sustainability,'  Indonesia's transmigration and two mega fires, USA $1 billion price tag on methane emission disaster, Sabah socio-political impasse on Kinabatangan environmental corridor project

Editor's note: I will start to prepare my summary paper for the 15th International Peat Congress 2016, 15-19 August, Kuching, Sarawak, Malaysia. The paper is entitled "Haze control and the oil palm farmer – a review of policy options." This builds on earlier work published by The Habibie Center:  Haze Control through the Sustenance of Indonesian Oil Palm Smallholders by Khor Yu Leng, Johan Saravanamuttu and Deborah Augustin. You can find the article by downloading the Nov 2015 newsletter by The Habibie Center by clicking on this link:  http://admin.thcasean.org/assets/uploads/file/2015/11/Thinking_ASEAN_November_2015.compressed.pdf. Referring page: http://www.thcasean.org/publication - newsletters section. Below also a link to how a more litigious society handles an air pollution crisis with climate damage - the case of SoCalGas in the USA. The issue of rural livelihoods also comes to the fore in the reported problem in Sabah about unwillingness of enough local peoples to contribute their land to a Kinabatangan project - state politicians sound neither keen to pay for the land and nor push for compulsory land acquisition. Again the question arises: who pays?

Info below on Sarawak hosting IPC 2016 and click here: http://www.ipc2016.com/

MPOC has just published a new paper titled 'A Historical Perspective of Peat Exploitation in Europe and its Sustainability'  at its Journal of Oil Palm, Environment and Health (JOPEH)...In the same period (1990-2008), Malaysia lost about 31,500 hectares, or about 1% of its peatland area. This figure only represents about less than 3% of the total peatland loss in Asia. (The highest peat loss in Asia during this time frame is in Indonesia, which lost about 450,000 hectares)... http://www.jopeh.com.my/

Suharto and Haze BY VERDINAND ROBERTUA 29 Feb 2016; ...As greater numbers of transmigrants went to outer Indonesia in the early to mid-1980s, the forest areas designated for transmigration projects were not adequate and protected forests were cut down. The catastrophic East Kalimantan fire in 1983 which destroyed 3,000,000 hectares of primary and secondary forests is considered as impact of massive sponsored transmigration. In the 3 million hectare area covered by the 1982-1983 fires in Kalimantan, only 11 percent of old-growth forest burned, while over 80 percent of logged areas burned..... The second disaster was the million-hectare peat-swamp project in Central Kalimantan. Beginning in 1995, the Suharto regime embarked on its last and most disastrous megadevelopment project – a scheme to transform peat forests covering more than 1 million hectare in the heart of Kalimantan into a rice-growing region colonized by more than 1,5 million transmigrants from Java. The region in question constitutes a large part of the largest peat-swamp floodplain in western Indonesia and contains some of the oldest and deepest peat deposits on the planet... https://verdinand633.wordpress.com/2016/02/29/suharto-and-haze/

How Do You Stop the Biggest Gas Leak Ever? Inside the efforts to plug SoCalGas’s methane disaster. by Karen Weise  Bloomberg Businessweek Reprints February 10, 2016; ...The leak had been spewing for about two weeks. Southern California Gas Co., the subsidiary of Sempra Energy that owns the facility at Aliso Canyon, had tried and failed to kill it..... Based on Conley’s readings, the state would estimate that in less than a month, Aliso released more than 68 million pounds of methane. Since then, it’s leaked 132 million pounds more, the state says, based on Conley’s subsequent flights... Aliso potentially the largest-ever single release of methane into the atmosphere—at least, the largest ever recorded....Sempra Energy, has said it has more than $1 billion in insurance coverage that it believes will cover many of the current and expected claims....in a worst-case scenario, Sempra could face a bill of as much as $900 million, says Brandon Barnes, an energy litigation analyst for Bloomberg Intelligence. If the leak is stopped by the end of March, the total cost could be about $250 million, he estimates. That includes roughly $115 million to stop the leak and relocate families, $40 million for civil liabilities, and $11 million in state fines. One of the biggest expenses could come from mitigating the climate damage, which the state says it will require. Buying carbon offsets would cost about $92 million, according to Barnes’s calculations.....  http://www.bloomberg.com/news/articles/2016-02-10/how-do-you-stop-the-biggest-gas-leak-ever?cmpid=BBD021016_BIZ

Sabah’s ‘Corridor of Life’ hits snag as landowners say no to acquisition BY JULIA CHAN March 1, 2016; Sabah is facing a major stumbling block in its Kinabatangan “Corridor of Life” wildlife conservation project as landowners in the highly cultivable region are unwilling to give up their plots for conservation purposes....  the state was not keen, however, to use the Land Acquisition Act to compel the landowners to give up or sell their land as they do not want to upset any party. “We want them to be partners in conservation but they won’t be good partners if we force them to sell their land. We want it to be as amicable as possible, through friendly persuasion. “The other option is land acquisition but buying land is not cheap and we hope to avoid this. We feel the best situation is when the people feel they have ownership of the programme, so that they are willing to help and want to contribute to the success of the programme.“We are not giving up. Sooner or later, the owners will see the logic in the corridor,” he said.... http://www.themalaymailonline.com/malaysia/article/sabahs-corridor-of-life-hits-snag-as-landowners-say-no-to-acquisition?sthash.tmltatpM.mjjo#sthash.tmltatpM.tYBOhzKS.dpuf

19 May 2015: Peat classification based on USDA.

Editor's note: Just as we were writing this blog posting we receive courtesy of Dr Param, a copy of his recent presentation:
"ROLE OF UNIFIED PEAT CLASSIFICATION IN THE MSPO CERTIFICATION SCHEME"  Paper presented at the MPOA Forum: Sustainability the MSPO Way  30th April 2015 by Paramananthan, S., Ramadasan, K., Tan, Y.A.

Do contact the authors and/or MPOA for a copy.

Key slides include the following:
  • 12: SUMMARY OF FINDINGS: Malaysian Unified Peat Classification – BETTER characterizes Tropical Peat Soils. Separates fibric / hemic / sapric
  • Recognizes Depth Classes - Topo, Ombro. Recognizes: Presence / absence of wood. Nature of wood: Decomposed, Undecomposed.  Identifies – underlying mineral substratum
  • 14: MSPO vs RSPO: RSPO makes blanket ruling – NO OIL PALM ON PEAT. MSPO must be realistic - Need to eradicate poverty (smallholders) What to do with oil palms already on Peat. Can these areas be replanted.
  • 18: CRITERIA TO BE USED FOR DECISION - TECHNICAL SUITABILITY YIELD ON DIFFERENT PEAT TYPES Example: Peat Characteristics and Its Impact on Yield (Ramesh et al., 2014)

Source: Paramananthan et al. 30 April 2015

Info below on Sarawak hosting IPC 2016 and click here: http://www.ipc2016.com/

14 May 2015: Smaller producers and smallholders drive expansion into marginal areas?

Editor's note: I had an interesting chat with one of the highly respected planters of the Malaysia palm oil sector last night. I was interviewing him for the Felda smallholder case study report (now in completion stage). He expressed the view that it is most likely that most plantable areas will become planted (barring a big discouraging price drop) including forest and peat zones; because of the consumption boom and also the desire for profits and livelihoods.

Just after attending a full day of the Singapore Dialogue hosted by Simon Tay / SIIA where the smallholder word kept popping up again and again, the reasoning is clear. It is widely understood that areas that cannot be planted under pledges made by the largest plantations is likely to be planted by smaller producers and smallholders. That is, unless the big plantation might hold on to the set-aside areas. At the forum there was talk of a new type of land licence that might permit the largest plantations to do this in Indonesia. This seems to be in place for Olam's project in Gabon with its big set-asides. What about elsewhere? The Bunge representative also spoke of a need to make natural capital markets pay i.e. is there a premia or payment to retain forests and peat zones?
Read more here:
Singapore Dialogue (update 1a): SIIA / Simon Tay dialogue in Singapore centered on palm oil sustainability, Indonesia extends moratorium, ASEAN banks under WWF spotlight http://khorreports-palmoil.blogspot.com/2015/05/attended-siia-simon-tay-dialogue-in.html
Peat has become a controversial area for new oil palm development. It has been increasingly declared "no go" ever since the December 2013 Wilmar-TFT-Greenpeace associates deal and the Greenpeace HCS Approach. It seems to be part of the Indonesia Palm Oil Pledge (IPOP). The Sustainable Palm Oil Manifesto's (more centered on Malaysia plantations with some Indonesia cross-over participation with IPOP members too) HCS is looking at it too. The reality is that most big plantations avoid peat anyway as they focus on their land banks in lower development cost zones. Those left to contemplate oil palm on peat are most likely the smaller producers and smallholders living in those areas (with few other options to move away and no better profit / earning generating crop or non-crop livelihood option available).
We understand that there has been substantive work in Malaysia on the different types of peat and its suitability for planting. This topic has been replete with rhetoric but specialists point out that it has been rather too short on scientific data from within the tropical peat zone. On this point, we can look forward to what new empirical work is being done by the Manifesto's HCS. And likewise, scientific data is being discussed by the Tropical Peat Research Laboratory of Sarawak (the work of the irrepresible Dr Lulie Melling has been cited by the very important Intergovernmental Panel on Climate Change/IPCC and many others: http://scholar.google.com/citations?user=dvbFMzYAAAAJ&hl=en). This is no surprise given the surfeit of peat in the East Malaysian state and their facing the prospect of having limited promising alternative economic projects for their peat zone peoples.
So, there will be an important International Peat Congress, 15-19 August 2016 (next year) in Sarawak. Dr Lulie Melling says: "We are going to create a few histories.... The International Union of Soil Science has agreed to support this congress....which means this is a scientific forum in which no one can conveniently disqualify scientific publications.... On top of that we also have lead partners from Indonesia in this Congress."
Links are below.
Dear all,
Greetings from Sarawak. The Malaysian Peat Society (MPS) in partnership with International Peat Society (IPS) will be hosting the 15th International Peat Congress 2016 (15th IPC 2016) for the first time outside of Europe and North America.
The theme of the congress is ‘Peatlands in Harmony– Agriculture, Industry & Nature'. As the theme suggests, this congress will relate to an integrated global perspective for the responsible use of peatlands and the preservation of their unique dynamics and natural biodiversity. The Congress will also provide for researchers, academics and practitioners, an ideal platform to congregate, share information and discuss their scientific results and experiences, with particular reference to peat and peatlands in tropics.
On behalf of the Organizing committee, we hope that you could participate as a participant or present a paper. For paper presentation, we would be very grateful if you could send us the title and an abstract of not more than 300 words.
I believe that this Congress will provide you with a fruitful intellectual experience as well as a memorable visit to Sarawak. We look forward to seeing you on our shores!
Enclosed is the First Announcement.  If you require any further information, please feel free to visit us at www.ipc2016.com.
We look forward to your acceptance and welcoming you in Kuching, Sarawak and your participation in this forthcoming Congress.
Lulie Melling, PhD
Tropical Peat Research Laboratory
Chief Minister's Department)
Lot 6035, Kuching-Kota Samarahan Expressway
94300 Kota Samarahan
Tel : +6082-662491 (0) +6082-662495 (D)
+6082-662497 (Fax)