Food & Agriculture Update: ASEAN Prepares For El Nino

• The World Meteorological Association (WMO) and other weather forecasting organizations are reaching a consensus that a significant El-Nino event wil likely begin this summer. This periodic warming of the Eastern Pacific Ocean often disrupts global atmospheric circulation, bringing extreme weather patterns to much of the world, but especially to tropical areas. In Southeast Asia, such events are commonly associated with prolonged periods of drought and severe tropical storms, which can have devastating impacts upon maritime nations like Vietnam. In order to prepare for food supply disruptions, Indonesia is setting aside over $173 million in order to boost its stockpiles of rice, sugar, palm oil, and cocoa. Malaysia is considering a temporary ban on fish exports, while making contingency plans for areas without adequate irrigation systems; the latter being a problem that also confronts the Philippines. While coping with an event with region-wide impacts like El-Nino would seem to be a raison d'etre for a regional organization like ASEAN, whether the regional bloc will be able to do so in a concerted fashion remains to be seen.
   
• Coffee stockpiles in Vietnam are down to 390,000 metric tons, which is less than half of what they were just two months ago. As Vietnam is now the world's second-largest coffee exporter, its low stockpiles are driving up coffee prices, especially for Robusta beans, prices for which are already up 24% over one year ago. Prices for high-quality Arabica beans are also soaring due to a prolonged drought in Brazil, which just barely surpasses Vietnam in terms of coffee exports. And as weather conditions in Brazil are expected to remain poor due to the expected El-Nino event, Vietnam appears poised to increase exports, which are already up 39% over a year ago. Many experts agree that Vietnam would benefit if it could produce more of its own Arabica beans, which are favored by major companies like Starbuck's. Currently, Robusta beans account for over 95% of Vietnam's coffee production.

SE Asia palm oil problems could hit consumers worldwide The Nation 12th May 2014
Southeast Asia's booming palm oil industry is facing a double blow from a recent drought and a possible El Nino weather phenomenon later this year, with analysts warning a production shortfall could spark a jump in consumer goods prices. From biscuits to shampoo and make-up, the oil has become a key ingredient in numerous products found on supermarket shelves across the globe, fuelling rapid growth of the industry in the world’s top two producers, Indonesia and Malaysia. But a drought in January and February in the countries, which provide some 85 per cent of the world’s palm oil and are home to vast plantations where swathes of rainforest used to stand, has raised the prospect of a drop in production later this year. Dry weather does not have an immediate effect on the fruit, which needs to be deprived of water for some months before any impact is noticeable.

BWPT to invest $112.5m Jakarta Post 13th May 2014
Publicly listed plantation firm BW Plantation (BWPT) says it will start the construction of its fifth palm oil processing facility in the fourth quarter of this year, with total investment estimated to reach US$112.5 million. BWPT corporate secretary Kelik Irwantono told a press conference on Wednesday that the palm oil processing facility in Central Kalimantan was expected to start producing 45 tons of palm oil per hour by the third quarter of 2015. According to Kelik, the construction of a palm oil facility usually costs around $2.5 million per 10 tons of palm oil it produces every hour. At present, the company is still discussing which plan to take to fund the construction project. “But looking at our current account and profitability, we might source the fund from our internal cash,” he said. The company’s total capacity currently stands at 210 tons per hour, with its newest facility kicking off operations earlier this month.

Indonesia strengthens food safety amid El Nino risk Vietnam+ 9th May 2014
The Indonesian Government has put aside 2 trillion rupiah (173.18 million USD) to ensure food safety, as part of efforts to prepare for the potential recurrence of weather phenomenon El Nino that is expected to hit the country in June or July. Of the total, a bout 1 trillion rupiah will be used to boost rice stockpiles at state-owned logistics firm Bulog from 400,000 tonnes to 1.7 million tonnes, Coordinating Economic Minister of Indonesia Hatta Rajasa said. The Indonesian government has recently allowed Bulog to import 328,000 tonnes of white sugar for household consumption to meet a shortage of 340,000 tonnes, according to Indonesian Agriculture Minister Suswono.

Cargill’s CPO output Jakarta Post 7th May 2014
Crude palm oil (CPO) production of Singapore-based PT Cargill Tropical Palm fell 10 percent in the first quarter of this year compared with the same period a year ago. Cargill president director Anthony Yeow said bad weather and the company’s aging palm trees, which are about 25 years old, have disrupted productivity. In the first three months of this year, Cargill only produced 70,000 tons CPO. “A drop in production is unavoidable because of the impact of weather. Other than that, we also don’t have new trees,” Anthony said on Tuesday, as quoted by Kontan.co.id.

Coffee Consumption in Indonesia Seen Climbing to Record in 2016 Businessweek 7th May 2014
Coffee consumption in Indonesia, the third-biggest grower of the robusta variety, may jump 33 percent to a record in the next two years as population and income increase in Southeast Asia’s largest economy. Demand will probably rise to 400,000 metric tons in 2016 from an estimated 300,000 tons this year and 260,000 tons in 2013, Irfan Anwar, chairman of the Association of Indonesian Coffee Exporters and Industries, told reporters at a conference in Jakarta today. Output may total about 700,000 tons in 2014 from 650,000 to 7000,000 tons estimated for last year, he said. Rising domestic consumption may reduce supplies from Indonesia, where robusta accounts for about 80 percent of the output, and help a surge in prices of the beans used by Nestle SA (NESN) in instant drinks. Futures of the more expensive arabica variety, brewed by specialty companies including Starbucks Corp., advanced in New York to a two-year high in March as drought threatened crops in Brazil, the top supplier. Robusta traded in London has jumped 28 percent this year.

Possible halt of fish export and adjustment on start of padi season in view of dry spell The Star 13th May 2014
The Government is considering the possibility of stopping fish export and adjusting the start of the padi season in view of the expected prolonged dry spell caused by the El Nino. Agriculture and Agro-based Industry Minister Datuk Seri Ismail Sabri Yaakob said with the padi planting process usually taking place in June, a decision whether to delay it would have to be made soon. “We have asked the Farmers’ Association Board to convene a meeting to look into this. We are not too worried about areas under Kada (Kemubu Agricultural Development Authority) and Mada (Muda Agricultural Development Authority) as both have enough irrigation. “It is the other areas that require water to be channelled in from elsewhere that we need to have a pre-emptive measure to ensure the farmers would not be badly affected,” he said at a press conference yesterday.

Harvest rainwater, users urged The Star 7th May 2014
As the biggest users of treated water, domestic consumers should harvest rainwater to help maintain dam levels, said Association of Water Energy Research president S. Piarapakaran. Based on 2012 statistics, he said 61.7% of the treated water supply in Malaysia was used by domestic consumers. “If consumers can harvest rainwater to partially supplement their usage of treated water, it could bring about a big impact in preventing water shortages,” he said when contacted yesterday.

Fish producers face export fall Myanmar Times 13th May 2014
Fishery exports have failed to pick up so far this year after falling by more than expected last fiscal year, experts say.

P78-m Cordillera crops ruined Manila Standard 13th May 2014
Drought, pests and a tornado combined forces to destroyed at least P78 million worth of corn planted in three provinces of the Cordillera Region, officials said. Domingo Bakilan, Kalinga provincial agriculturist, reported that the El Niño phenomenon has severely affected the summer variety of corn planted in more than 1,500 hectares in Kalinga and about 1,000 hectares in Mountain Province. “The affected corn-producing areas in Kalinga are Tabuk City, Rizal, Tanudan and Pinukpuk,” he said. Paracelis town in Mountain Province bore the brunt of the drought. But reports from remote areas in other towns were still being monitored. A tornado struck Apayao over the weekend and destroyed more than 22 hectares of corn plantations in the towns of Luna, Pudtol and Sta. Marcela. In Ifugao, hopper infestation as a result of the drought damaged corn in more than 3.5 hectares in Alfonso Lista with estimated value of P69.3 million.

Ombudsman clears GMA in fertilizer scam PhilStar 9th May 2014
Citing absence of proof, the Office of the Ombudsman has cleared former President and now Pampanga Rep. Gloria Macapagal-Arroyo of involvement in the P728-million fertilizer fund scam. In an eight-page decision signed on May 2 by Ombudsman Conchita Carpio-Morales, the anti-graft agency junked the corruption case filed against the former president. The fertilizer fund was allegedly distributed for election purposes to Arroyo allies, including lawmakers representing districts with no farms or agricultural activities. The Office of the Ombudsman said there is no evidence to show that Arroyo had a hand in the anomaly for which former agriculture secretary Luis “Cito” Lorenzo and former undersecretary Jocelyn “Jocjoc” Bolante were charged with plunder before the Sandiganbayan in June 2011. A Malacañang official said the administration respects the court ruling that dismissed the charges against Arroyo. “We note the May 8, 2014 resolution of the Office of the Ombudsman dismissing the graft complaint against former President Gloria Macapagal-Arroyo. We respect the findings of the Office of the Ombudsman, an independent constitutional body, which has the authority to decide on such cases filed before it,” Presidential Communications Operations Office Secretary Herminio Coloma Jr. said.

This Tiny Scanner Will Tell You Exactly What Is In Your Food Business Insider 7th May 2014
A new Kickstarter has just been funded to create a device about the size of a car clicker to tell you what is in your food. The scanner harnesses the power of physics and chemistry to figure out everything from the sugar content of a given apple to whether or not that drink you left on the bar has been drugged. The device, called SCiO, actually uses a technology similar to the one that helps astronomers figure out the make-up of the stars — called spectroscopy.

Coca-Cola drops free cans to Singapore’s foreign workers Marketing Interactive 7th May 2014
Coca-Cola has partnered the Singapore Kindness Movement and dropped free cans of Coke to foreign workers. Remote controlled drones dropped off to boxes of Coke to more than 2500 workers around Singapore, said Coca-Cola’s agency Ogilvy & Mather Singapore, who was the creative agency behind the campaign. The project had locals writing messages of gratitude to workers at high-rise construction sites around the country and tying it to the cans. 2,734 photos of individuals with their handwritten notes were delivered to as high as 35th story of construction sites to deliver the surprise treat to unsuspecting workers. This was done over the months of March and April.

Govt to auction 670,000 tonnes of rice Bangkok Post 13th May 2014
The Foreign Trade Department will auction off 450,000 tonnes of rice on Wednesday and about 220,000 tonnes on Thursday on the Agricultural Futures Exchange of Thailand (AFET).

Rubber farmers vow city rally Bangkok Post 7th May 2014
Surat thani: Rubber planters have vowed to converge on Bangkok on Wednesday to protest against the government’s plan to sell off its stockpile of 220,000 tonnes on the cheap. The leader of a rubber group...

Luxury taxation on carbonated soft drinks not applauded by customers: surveys Vietnam Net 14th May 2014
Vietnamese consumers believe that fizzy soft drink manufacturers will raise their selling prices if the government imposes a luxury tax on the products. This means that the taxation would put a heavier burden on their scanty budgets.Thoi bao Kinh te Vietnam has quoted its sources as saying that the selling prices of carbonated soft drinks may increase by 10 percent if the Ministry of Finance’s tentative taxation plan become reality. Not only carbonated soft drink manufacturers, but Vietnamese consumers have also lodged their protest against the taxation plan. A survey conducted by Epinion, a Danish market survey firm, on expected Vietnamese consumption behaviors in case the soft drink prices increase, has found that the majority of consumers would give up soft drinks and shift to use other alternatives. Epinion, in its survey, polled 600 consumers between the ages of 15 and 49, who live in the Hanoiand HCM City areas. 43 percent of the polled consumers reportedly have monthly incomes of under VND7.5 million. 80 percent of those polled said they had consumed carbonated drinks within the last three months.

Vietnam's rice growers now rely on risky China: experts Thanh Nien News 14th May 2014
China has remained the largest importer of Vietnamese rice since last year, raising concerns among local traders about price squeezing and sudden contract cancellations, experts say. Meanwhile, Vietnam has lost a significant amount of the global market share to Thailand, leaving it heavily reliant on China which took 60 percent of exports in April, according to the Vietnam Food Association (VFA). China is forecast to remain Vietnam's biggest customer in the coming months due to its increasing demand for the grain. Local traders are boosting their exports northwards, mostly through unofficial cross-border channels as global contracts continue to get gobbled up by Thailand, the association said. “Rice shipments both through official and unofficial channels could help Vietnam boost exports and avoid further price decreases during this tough time,” Tran Thanh Hai, deputy head of the Ministry of Industry and Trade's Export-Import Department, said.

Tire rubber plunging as Vietnam tappers expand world glut Thanh Nien News 13th May 2014
Producers of natural rubber used mostly in tires are creating a global surplus for the fourth straight year, leaving prices mired in a bear market that is the worst of any major commodity. Farmers will expand output faster in 2014 than the gain in demand from surging car sales, creating the biggest glut in at least a decade, the International Rubber Study Group said May 2 in an estimate that was triple its forecast in December. Futures in Tokyo, down 62 percent from a record in 2011 after touching a four-year low last month, may drop 11 percent further to 180 yen a kilogram ($1,761 a metric ton) this year, a survey of 13 analysts by Bloomberg News showed. Lower prices in the $26 billion rubber market are providing an earnings jolt for tire makers including Pirelli & C. SpA and Bridgestone Corp. and squeezing profit for small farmers who “tap” rubber-tree bark and account for about 80 percent of supply. While top producer Thailand is taking steps to curb output as it has during previous slumps, lower-cost growers including Vietnam and Indonesia are still profitable and show no signs of cutting back.

Gov't sets VietGap deadline for tra fish breeders Vietnam News 12th May 2014
Tra fish breeders must adopt Vietnamese Good Agriculture Practices (VietGap) or abide by international certifications suitable to Vietnamese law by the end of next year. This is a condition they must meet if they wish to continue selling tra fish products. Other conditions include that their locations and tra fish growing areas must comply with tra fish development plans approved by provincial People's Committees. The breeders are required to register the fishing areas and estimated size of their catches with local authorised agencies that supervise aqualculture growing activities. The agencies would then certify and grant code numbers for tra fish farms that meet these requirements, including breeding, feeding, providing medicine for fish and monitoring chemical uses.

Coffee sales to slow in Vietnam as reserves drop from record Thanh Nien News 12th May 2014
Coffee sales by growers in Vietnam, the biggest producer of robusta beans used by Nestle SA, may slow after stockpiles slumped 54 percent from an all-time high. Unsold reserves shrank to 390,000 metric tons at the end of April, or about 23 percent of the record 1.7 million-ton crop, according to the median of 10 trader and shipper estimates compiled by Bloomberg. That’s less than 27 percent at the same time last year and the 25 percent average in the past five years, the survey shows. Inventories were 850,000 tons in the week ended March 7, a record for that time of year. Reduced stockpiles in Vietnam may boost robusta prices, which have climbed 24 percent this year, and narrow the gap with the more expensive arabica variety favored by Starbucks Corp. Arabica jumped 66 percent as drought parched crops in Brazil, which accounts for more than a third of world output. In 2011, when frost damage in Brazil sent arabica to a 14-year high, many roasters added the cheaper robusta to their blends to limit the increase in bean costs.

Vietnamese street food sellers face new bureaucracy Thanh Nien News 7th May 2014
Hoa makes yogurt, caramel cream and cake at home in Hanoi. She says she does everything by the book and even has a food safety certificate issued by the ward authorities hanging on her wall. Recently, those same officials told her to attend a training session on food safety that she didn't have time for. “The owner of a pho (beef soup) eatery near my house went but failed to learn anything. Because each person had to pay VND200,000 (US$9.4) at the end of each class, she refused to attend any more sessions,” Tuoi Tre quoted her as saying. Following the new courses, food sellers nationwide will have to pass an exam on food safety according to a controversial government circular that takes effect on May 26.