In the media: China Daily on Market Diversification in Southeast Asia

Is the Southeast Asian Market cushioned from harsh US tariffs through diversification?

Editor’s Note: On May 28, the U.S. Court of International Trade ruled that the global tariffs imposed by Trump are illegal. However, many of the sector-specific tariffs like those on Southeast Asian agricultural exports remain in effect even as trade negotiations continue in the on-off Trump Tariff saga.

Segi Enam Advisors principal Khor Yu Leng was cited by China Daily on 5 May 2025 for her views on market diversification among ASEAN countries, following the impact of high US tariffs on the Southeast Asian market.

On 2 April, the US imposed a baseline 10% tariff on all its trading partners, along with additional, country-specific tariffs. Among those hit hard were countries in Southeast Asia. For example, Indonesia, the world’s biggest coffee exporter, was hit with a 32% tariff, even though the US is one of its key markets. Thailand the second largest was hit with a 32% while Cambodia 49%. Meanwhile, Vietnam, which is considered more vulnerable due to its strong reliance on the US and the likelihood of future tariffs, was slapped with a 46% tariff.

In response, countries in the ASEAN region continue the negotiations with the US, but they’re also actively working to protect their respective economies by diversifying their export markets and improving export competitiveness.

Planters and traders in Indonesia, for instance, remain optimistic as they turn to other key markets like Singapore, South Korea, and the Middle East. Governments in the region are also stepping up support. In Malaysia, Prime Minister Anwar Ibrahim announced a 1 billion ringgit (about $235 million) relief fund to help small and medium-sized businesses affected by the tariffs. Meanwhile, Thailand is hosting a global rice summit from May 25 to 27, led by its Commerce Ministry. The goal is to promote Thai rice exports and secure purchase orders worth over 2 billion baht (around $61 million).

Yu Leng’s comments below touched on the diversification of markets among ASEAN countries following the impact of the US tariffs.

Khor Yu Leng, director of Singapore-based consultancy Segi Enam Advisors noted that the US tariffs are of great concern in ASEAN countries as exporters have a similar range of agricultural products, including rice, palm oil, and fruits. She said Vietnam and Thailand seem more vulnerable, with relatively higher US tariffs and heavier dependence on niche markets and products, including jasmine rice.

Reach us at khorreports[at]gmail.com

Improving Malaysia’s Ecological Fiscal Transfers: Key Takeaways from Macaranga Media's Webinar

On 23 April 2024, Samantha Ho (Eco Business), Surin Suksuwan and Teckwyn Lim, moderated by Yao-Hua Law of Macaranga Media, gathered to discuss Malaysia’s Ecological Fiscal Transfer (EFT) policy, a federal initiative aimed at incentivizing state governments to conserve forests and protected areas. The webinar shed light on the program’s challenges, transparency gaps, and potential improvements. Here were the key takeaways:
1. Limited Funds Disbursed, Lack of Transparency

Since its introduction in 2019, the federal government has allocated RM800 million under the EFT scheme. However:

• Less than 5% of the funds have been disbursed.

• In some years, the amounts given to state governments were lower than publicly stated.

• The Ministry of Natural Resources and Environmental Sustainability (NRES) did not disburse funds in certain years, raising questions about oversight.

While some projects—such as Tasik Chini’s conservation and an artificial reef in Kelantan—were highlighted, most states provided little detail on how funds were used. Johor was the most transparent but only shared data from 2021, leaving earlier allocations unaccounted for.

2. Why Does the Federal Government Need States’ Cooperation?

• States control land, while the federal government has international commitments (e.g., protecting 20% of Malaysia’s land).

• Without state cooperation, federal conservation goals (such as maintaining 50% forest cover) may fail—especially as states like Sarawak continue converting forests for agriculture.

• Currently, there is no penalty for states that reduce forest cover, and little compensationfor states like Pahang and Sabah, which already maintain high forest coverage.

3. Ambiguity in Definitions and Monitoring

• The federal government retracted a list of protected areas from MyBIS, claiming it was a temporary delay—but five and a half years later, clarity is still lacking.

• Without clear definitions, it’s difficult to determine what qualifies as a protected forest or how much forest cover exists.

• No strict monitoring ensures funds are used for conservation. Some states reportedly spent EFT money on roads and other non-conservation projects. However, some panellists agreed that for EFTs to work, state governments should have freedom to choose as to what they define as constituting ‘conservation’.

4. Should EFTs Be Tied to Conservation Outcomes?

• Teckwyn argued that EFTs should increase protected areas and maintain forest cover, not just fund existing state activities.

• Surin suggested that states failing to protect forests should lose funding, turning EFTs into a performance-based incentive.

• Samantha emphasized transparency—even if funds aren’t spent on conservation, the public deserves to know how they’re used.

5. Rethinking EFTs: Opportunity Cost, Not Just Conservation Funds

• Since federal transfers to states are constitutionally mandated, EFTs could be structured as compensation for lost economic opportunities (e.g., logging or mining bans).

• Surin proposed: “If you have X amount of forests, you get X amount of money.”

• Others questioned whether framing EFTs as “conservation funds” is effective—perhaps they should be seen as payments for ecosystem services.

Conclusion
Malaysia’s EFT policy has the powerful potential to safeguard Malaysia’s natural heritage as well as being a legitimate tool to back up the Malaysian government’s pledge of maintaining 50% forest cover. Notwithstanding, the general consensus was concern over the lack of transparency at how public funds were being spent.

Part 1 of Macaranga Media’s coverage of EFTs can be found here. Part 2 may be found here.
MyBIS’ list of protected areas may be found here.

Reach us at khorreports[at]gmail.com

SCMP Interview: Malaysia pushes for premium palm oil in China as overall imports decline

Segi Enam Advisors principal Khor Yu Leng was cited by South China Morning Post (16 March), for her views on China’s declining demand in importing Malaysian palm oil. Once the top importer of Malaysian palm oil, China has now been ceded by India. According to the Malaysian Palm Oil Board, China imported 1.76 million tonnes of Malaysian palm oil in 2022, representing 11.2% of Malaysia’s exports of the commodity, but that fell to 1.47 million tonnes (9.7%) in 2023 and 1.39 million tonnes (8.2%) last year.

Yu Leng’s comments, as quoted by South China Morning Post, are as below. She opined that Chinese consumers are now after oils perceived to be healthier and referenced the demand for value-added products.

Chinese consumers now have enough money to demand foods made with oils that are considered to be healthier, said Khor Yu Leng, a political economist at Singapore-based Segi Enam Advisors. Much of it can be refined domestically, she added.

Rapeseed oil is common now and may be sourced from China, she said, while much of the vast amounts of soybean China imports each year goes to making oil.

“There is still a middle-income trap for palm oil because there’s a perception that it’s not as healthy,” she said. Specialty, health-focused palm oil is a “niche” industry now, she added, but it is morphing into a new norm.

“There’s been talk that there’s more demand for value-added products,” Khor said. “Everyone’s trying to produce some now.”

…

To help shore up the industry, Malaysia secured more than RM230 million (US$51.8 million) worth of palm oil trade deals in July when the country’s deputy plantation and commodities minister, Chan Foong Hin, visited China.

They included an e-commerce deal to help sell palm oil as health products in China, Bernama, Malaysia’s national news agency, reported, while another deal targeted the expansion of vitamin-rich red palm oil use in Chinese animal feed.

Another aimed to expand Malaysian refinery Able Perfect’s Chinese “presence” in refined palm oil and palm shortening to about RM200 million, Bernama quoted the deputy minister saying.

“This looks better than past MOUs, since [it’s] apparently specific on new and value-added products,” Khor said.

Reach us at khorreports[at]gmail.com

SCMP Interview: Indonesia’s triumph over palm oil ‘win’ over EU before the WTO but demand and market access issues could sour hopes

Segi Enam Advisors principal Khor Yu Leng was cited by South China Morning Post (25 Jan), for her views on Indonesia’s palm-oil biofuel ambitions following the WTO’s decision. The decision, issued on 10 January 2025, ultimately upheld the EU’s ability to take environmental and climate-based action under its Renewable Energy Directive and affirmed the EU’s classification of palm-oil based biofuel as ‘high risk’ due to its links with deforestation. Notwithstanding, the organisation also criticised the EU’s procedures for lacking transparency and for insufficiently reviewing data to justify its ‘high risk’ designation, rendering them inconsistent with WTO rules. Indonesia, the world’s leading palm oil producer, has since framed the WTO’s criticism of the bloc’s procedures as a “win” in its ongoing battle against EU restrictions on its palm-oil biofuel ambitions. The EU has since stated that it will ‘take the necessary steps to respect its WTO obligations’. 

Yu Leng’s comments, as quoted by South China Morning Post, are as below. She referenced Malaysia’s 2021 dispute, in which Malaysia brought a WTO claim against the EU over the latter’s classification of palm oil and palm crop-based biofuels as being at ‘high risk’ of indirect land-use change and argued the measures were discriminatory. In 2024, the WTO upheld the measures taken by the EU, as well as affirming certain related French measures. 

Khor Yu Leng, a political economist at Singapore-based Segi Enam Advisors, noted that the ruling echoed Malaysia’s earlier dispute with the EU. “The EU broad policy was upheld, again, but its procedures were faulted,” she said, describing it as “deja vu”....

… Indonesia and Malaysia together produce more than 85 per cent of the world’s palm oil and have been at the forefront of the push for palm oil-based biofuel. Both have sought to leverage their palm oil reserves as a renewable energy source by blending the commodity with ordinary fossil-fuel diesel.

But palm oil biofuel faces an uphill battle. Despite ambitious targets – Indonesia plans to increase its biodiesel blend to 40 per cent this year and up to 50 per cent by 2029 – the global market for palm oil-based biodiesel remains thin, Khor said.

“For a thinly traded palm product, there has been a surprising amount of ink and political capital spent on it,” she said, noting that even neighbouring Southeast Asian countries are prioritising electrification over biodiesel.

“Despite giddy hopes over 10 years ago, there’s just not much trade in this product. Both Malaysia and Indonesia cannot even get neighbouring countries to provide policy support for this.”

Retrospective: Floods in Thai rubber areas, China Daily Interview

by Khor Yu Leng, yuleng@segi-enam.com

News Alert: Since 28 January 2025, heavy rainfall in Malaysia’s Borneo has caused severe flooding, displacing thousands. Sarawak has over 12,000 evacuees, with Bintulu the hardest-hit district, while Sabah reports over 5,000 evacuees, mainly in Kota Marudu, Pitas, and Lahad Datu. Although conditions improved in early February, NADMA warns that thousands remain in relief centers, and on 5 February, Sarawak issued a red alert for potential floods in 26 districts. A Sarawak politician described the flooding in Bintulu, Miri, and Kuching as among the worst, with some floods and landslides everywhere else in the state. (See 30 January weather warnings from Google and Met Malaysia below).

Note: In related news, Bintulu MP Tiong King Sing blames ‘devastating’ floods on failure to see through Sungai Sibiew deepening | Malay Mail and Sarawak braces for king tide amid eased flood situation | Borneo Post Online

On 3 Dec 2024, Khor Yu Leng shared these comments to Prime Sarmiento at China Daily, who was reviewing the problem of the southern Thai floods: 

Khor Yu Leng, director of Singapore-based consultancy Segi Enam Advisors, said climate change is influencing global rainfall variability and cyclonic patterns, leading to an increase in monsoon-related flooding.

Khor, a veteran commodities trade analyst, said the current flooding in southern Thailand and northern Malaysia was worsened by high population density in flood-prone areas, vulnerable river systems, coastal exposure, and inadequate flood defenses.

Our detailed analysis behind our comments given to China Daily is as follows.

Though the full impact of the floods of end November-early December 2024 has yet to be fully comprehended at this juncture, it is already apparent that non-core production regions in Thailand were affected notwithstanding that the total farm output or GDP impact remains to be seen.

However, we can preliminarily look at rubber price as a market indicator and what kind of consequences one can expect. Reports on the ground say as follows: “Southern provinces, subsiding now”’; “I don’t think it’s bad as they make it, but if there are to be handouts then perhaps they build it up to be more major”.

Context of November-December 2024 flooding in Southern Thailand 

Southern Thailand grappled with severe flooding following torrential rainfall driven by the north-east monsoon. The north-east monsoon typically runs from November to March whereby winds from the north-east picks up moisture from the Gulf of Thailand to later deposit it as heavy rain across the gulf islands and parts of Thailand’s southern peninsula. 

Southern Thailand typically experiences high rainfall annually around November-December, but November-December 2024 saw the region experience rainfall at levels significantly above average, affecting five provinces: Songkhla, Satun, Pattani, Yala, Narathiwat.

The above-average rainfall of end-2024 resulted in significant flooding in five provinces, affecting 136,000 households, claiming 29 lives and causing significant damage particularly to rubber plantations, with losses estimated at 20bn baht (~USD $550m). The estimated area impact spans an estimated 800,000 hectares.

Map of affected regions, southern Thailand

These areas experienced extensive damage, with over 5 million rai (approximately 2 million acres) of rubber plantations impacted. The Rubber Authority of Thailand (RAT) indicated that farmers will be unable to tap their rubber trees for another six weeks, exacerbating the financial losses due to the current latex price of 65 baht per kilogram (~USD $1.8).

Causes of floods in the region

Meteorology experts have identified several key factors contributing to the recent flooding to the region that spans South Thailand and to North Malaysia, too. The analysis reveals a combination of climatic conditions, seasonal patterns, and geographical vulnerabilities.

1. Heavy Rainfall: Experts note that heavy and prolonged rainfall has been a significant contributor to flooding, particularly in states like Kedah. Rainfall has been exacerbated by low-pressure systems originating from the Kra Isthmus in Thailand, which have led to increased precipitation in the region.

2. Northeast Monsoon: The onset of the northeast monsoon, that typically peaks annually in November and March, brings heavy rains to the east coast of Peninsular Malaysia. In 2024, climatologists warned that the monsoon may lead to more intense rainfall due to an unstable atmosphere associated with La Niña conditions. 

3. High Tides: The combination of heavy rain and high tides has been particularly concerning. Experts predicted that extra high tides occurring between 18 to 20 October may have coincided with heavy rainfall, significantly increasing the risk of flooding in coastal areas. 

4. Geographical Vulnerabilities: Areas like Kedah are prone to flooding due to their topography, where rapid water flow from upstream areas can overwhelm drainage systems, leading to flash floods. This has been observed in districts such as Baling and Kota Setar.

5. Recurrence of Flood Events: Many regions have experienced repeated flooding events, where new downpours follow quickly after waters recede from previous floods. This cycle creates a compounding effect on flood risks. 

6. Climate Change Factors: Experts highlight that climate change is exacerbating extreme weather patterns, making it increasingly difficult to predict rainfall accurately. The interaction between various weather systems, including low-pressure areas and monsoonal flows, has led to unexpected flooding events.

El Niño/Indian Ocean Dipole and typhoon season trends

The current flooding in southern Thailand (and northern Malaysia) is linked to a low-pressure system that formed over the South China Sea. This system moved through the Gulf of Thailand into the Andaman Sea, bringing heavy rains and causing widespread flooding. Notably, this event is apparently not directly tied to a specific typhoon or named storm​.

Scientists seem to agree that climate change is associated with variability of rainfall and cyclonic patterns globally, and excessive monsoon flooding has become frequent in recent years. 

Some warned earlier this year that the monsoon could bring more intense rainfall due to an unstable atmosphere associated with La Niña conditions. However, at present, the relevant climatic metrics show an ENSO-neutral phase, and the Indian Ocean Dipole (IOD) is tending negative. If both were negative (i.e., strong La Niña conditions), it would serve as a stronger indicator of heightened rainfall and storm activity. The northeast monsoon, which peaks between November and March, typically brings heavy rains to the east coast of Peninsular Malaysia and southern Thailand​.

Attending the ASEAN Economic Opinion Leaders Conference: Insights for 2025

We recently attended the ASEAN Economic Opinion Leaders Conference: Outlook for 2025, held at MITI, Kuala Lumpur, from 8-9 January, 2025. The event brought together key industry leaders, policymakers, and economists to discuss the region's future under Malaysia's ASEAN Chairmanship.

Across two days, we joined insightful sessions, including:

1. The Digital Economy and Green Economy - ASEAN’s Future Engines of Growth: Yeoh Keong Hann (YTL Power) emphasized the importance of balancing domestic advantages in renewable energy with equitable distribution across ASEAN. He proposed ideas like connecting regional power grids to facilitate energy trading. Firdaus Hisham (UEM) highlighted the need to harmonize regulations to attract investments and accelerate large-scale green initiatives.

2. World Bank’s Economic Outlook for ASEAN: Manu Bashkaran (Centennial Asia Advisors) and Aakash Mohpal (World Bank) provided a comprehensive view of post-pandemic economic recovery. They stressed empowering SMEs as critical drivers of innovation and job creation while addressing geopolitical risks, such as shifts in global trade patterns and increasing transport costs.

3. Reinforcing Regional Economic Integration for a Resilient ASEAN: Satvinder Singh (ASEAN Secretariat) and Nazir Razak (ASEAN-BAC Malaysia) explored innovative solutions like the idea of an ASEAN business entity to facilitate seamless operations across borders. They also discussed revisiting older initiatives, such as customs integration, to strengthen regional supply chains.

These dialogues underscored ASEAN's resilience and potential, with a focus on sustainable growth, innovation, and regional collaboration. The conference set an optimistic tone for Malaysia’s role in leading ASEAN into 2025 and beyond.

Panel Discussion, ‘Reinforcing Regional Economic Integration for a Resilient ASEAN’

With Chee Hau (Ministry of International Trade and Industry)

Palmtrack: UCO & tallow in the world of palm oil

Editor's Note: this article first appeared on PalmTrack, 17 December 2024. Subscribe to PalmTrack here to get the latest posts!

UCO (used cooking oil) and tallow (rendered animal fat) are two key materials used to produce biofuels like biodiesel and renewable diesel. They both come from waste products, making them sustainable alternatives to conventional feedstocks. From our May 2024 review on Singapore, you can see details from our findings, in the chart below.

UCO is simply waste oil left over from cooking and frying food. Think of the used oil from restaurants or even your kitchen—it’s collected and repurposed instead of being thrown away. In Southeast Asia and beyond palm cooking oil is a major source of UCO. The global palm oil consumption is around 75–80 million tons per year recently, with a significant portion used in cooking. If 20–30% of this were converted into UCO, it could yield 15–24 million tons of UCO annually? But there’s many reasons why the volume is not that high (read about context and issues below).

Indonesia, Malaysia and Singapore are key countries in the trade and processing of palm oil. How does UCO and tallow feature in their trade? Let’s check out the import and export statistics.

Our key findings:

• About 400k tonnes of degras from Indonesia, from domestic sources. Imports are low to negligible.

• Over 1 million tonnes of UCO plus tallow from Malaysia, as a transhipment hub,

  backed by about the same amount of imports, that is up until 2021. The divergence of UCO exports (uptrend) and UCO imports (collapse) in 2022 and 2023 is surprising? The gap of exports and imports is surely not from domestic sources. This needs much explanation. (We’ll have to ask around!)

• Singapore has been sucking in about 1.7 million tonnes annually, of UCO and tallow recently! The renewable diesel/SAF plant of Neste in Singapore has a capacity of over 2 million tonnes. We would love to report on the exports of these products, but even the EU has problems tracking this. (Quantum reported, Oct 2024: The EU is expected to introduce an HS code for sustainable aviation fuel (SAF) in the near future. The purpose of this code is to increase the visibility of trade flows and address concerns that SAF could be used to avoid anti-dumping duties on Chinese HVO.)

Malaysia. The 20-year trend for Malaysia's exports of UCO, degras, and tallow indicates that this segment emerged in the early 2000s, albeit with low export volumes. Exports experienced slight spikes in 2006 and 2013, followed by a strong upward trajectory starting in 2015. Malaysia's imports of UCO, degras, and tallow have mostly matched exports, highlighting its role for transshipment. However, Malaysian imports of UCO diverged from this trend, showing a significant upward climb from 2017 onwards, peaking at approximately 690,000 tons in 2021, then declining substantially. This drop is surprising as Malaysia has a relatively low supply of domestic UCO. What's going on? Is another HS code in play for these imports?

Indonesia. In general, imports are minimal and remain consistently so throughout a twenty-year period. Indonesia is an exporter of domestic waste oils. The trend for exports of UCO, degras, and tallow in the early 2000s was low. UCO exports had a sharp rise 2006 to 2008, followed by modest growth until 2015 when a strong upward trajectory emerged with a peak in 2021 followed by 200,000 tonnes exports annually most recently. Degras exports showed low-steady activity before surging in 2023. Might this reach 200kt a year?

Singapore. Export volumes have remained low overall, with some uptick between 2007-2009 and 2011-2013 which seem to be matched by imports, but less so for tallow. Since 2015, UCO imports have really surged, reaching over 1.2 million tonnes a year in 2023. Tallow imports spiked 2016-2019, stabilising around 500,000 tonnes annually since 2020 with a slight downward trend. Refer to our notes on Neste, which is a major processor of these raw materials into value-added products - renewable diesel and SAF, and our graphic at the top of this article.

Context and issues

Why use UCO in biofuels? It’s sustainable. UCO doesn’t compete with food crops since it’s essentially a waste product. It’s cost-effective. Repurposing UCO is cheaper than producing virgin oils. It’s good for the environment. Recycling it reduces landfill waste and lowers greenhouse gas emissions. UCO is processed through methods like transesterification (to make biodiesel) or hydroprocessing (to create renewable diesel). These biofuels can then power vehicles as eco-friendly alternatives to fossil fuels.

Tallow comes from rendered animal fat, a byproduct of the meat industry. It’s mostly derived from beef or mutton fat, but other animal fats can be used too. Tallow is valuable in biofuels as it reduces waste. Tallow turns animal byproducts into something useful. It’s energy-rich. Packed with lipids, tallow is highly efficient for biofuel production. It supports a circular economy. It’s a great way to reuse materials that would otherwise be discarded. Similar to UCO, tallow is transformed into biodiesel or renewable diesel using advanced chemical processes.

Q: How do UCO and tallow compare to other feedstocks?
A, Both have a lower carbon intensity than conventional feedstocks like palm oil or soybean oil, making them more environmentally friendly. Plus, governments often incentivize their use through renewable energy policies and standards.

Q: Are there challenges?
A. Definitely! These include:

• Limited supply: Collecting UCO efficiently can be tricky, and the supply depends on how much waste is generated.

• High demand: As more industries rely on UCO and tallow, competition for these resources is growing.

• Processing hurdles: Both require proper filtering and treatment to remove impurities before they’re converted into biofuels.

Bottom line: UCO and tallow are game-changers for sustainable energy. They reduce waste, lower emissions, and contribute to global renewable energy goals. Plus, everyone is keen on their role in the circular economy.

UCO is a great option for sustainable biofuels, but it comes with its share of controversies. These include: 

• Fraud: Some UCO gets reused in food (like “gutter oil”), which is unsafe. There’s also fraud, where virgin oil is mixed in to claim subsidies.

• Traceability: It’s hard to confirm UCO is genuinely waste, especially in global supply chains. Exporting UCO can also deprive local communities of a valuable resource.

• Environment: Collecting and shipping UCO has a carbon footprint, and some fear rising demand might lead to creating waste oil intentionally.

• Economics: UCO has other uses, like making soap or animal feed. Prioritizing biofuels could disrupt these markets or raise costs.

• Greenwashing: UCO is limited, and critics worry its “sustainability” is exaggerated, shifting focus from reducing fossil fuel use.

Key controversies: (i) China's Gutter Oil Scandal: Reports of UCO being repurposed for human consumption have highlighted safety risks and the need for stricter regulations. (ii) EU Imports: The European Union’s heavy reliance on UCO imports for biofuels has faced criticism for its environmental costs and the potential for fraud in tracing the source of UCO.

Tallow has its own controversies. These include:

• Ethics. Animal Welfare: Since tallow is derived from animal fat, its use raises ethical concerns for vegans and those opposing industrial livestock practices.Dependence on Meat Industry: Critics argue that relying on tallow for biofuels indirectly supports large-scale meat production, which has significant environmental and ethical issues.

• Environment. Deforestation Links: Increased demand for meat (and thus tallow) may contribute to deforestation for grazing land. Carbon Emissions: Although tallow-based biofuels have a smaller carbon footprint than fossil fuels, livestock farming produces significant methane emissions, offsetting some of the benefits.

• Economics and supply. Competing Uses: Tallow is also used in products like soap, cosmetics, and animal feed. Diverting it to biofuels could drive up costs for these industries. Limited Availability: As a byproduct of meat processing, tallow supply is finite and cannot scale easily to meet growing biofuel demand.

• Culture. Religious and Dietary Restrictions: In some cultures, the use of animal-derived products, including tallow, is controversial or unacceptable.

Special Report: Rainfall and Floods in Peninsular Malaysia

Since 29 November, the East Coast of Peninsular Malaysia has been inundated with floodwaters to such an extent that the Deputy Prime Minister issued a statement describing the flood situation in Kelantan and Terengganu (Peninsular Malaysia) as being worse than the severe floods of 2014. Rainfall has also flooded parts of Kedah, with water from Sungai Anak Bukit entering the official residence of the Kedah Menteri Besar and reaching up to 0.5 meters in the kitchen quarters. 

The flood death toll from northern Malaysia and southern Thailand has risen to nine with 140,896 people displaced in Malaysia and 640,000 households affected in southern Thailand, as of the time of writing. The Chana district of Songkhla province has reportedly suffered the worst floods in 50 years, triggered by three days of heavy rain in the southern region. A heavy rain warning remains in effect, with heavy to very heavy rains that may cause flash floods and overflows until early December, according to the Thai Meteorological Department.

Indeed, Met Malaysia’s Long Term Weather Outlook had predicted that November had above average anomalies in Perlis and Kedah. Rainfall for Terengganu and parts of Kelantan was predicted to be wetter, receiving >60% (about 600mm) of rainfall.  We had covered this in our Weather Update on 20 November 2024, however we note that Sabah has been downgraded from an anomaly risk. 

On 27 November, Malaysia Met issued warnings for Kelantan, Terengganu and parts of Pahang were set to receive dangerous levels of rainfall. 

On 30 November, Malaysian Met issued warnings that continuous heavy rain at danger levels is expected to occur in Kelantan, especially in Tumpat, Pasir Mas, Kota Baru, Jeli, Tanah Merah, Bachok, Machang, Pasir Puteh and Kuala Krai.

Besut, Setiu, Kuala Nerus, Hulu Terengganu, Kuala Terengganu and Marang in Terengganu are also forecasted to experience continuous heavy rain during the same period.

For December, however, Met Malaysia has predicted above average anomalies for parts of Kelantan, Terengganu, Perak, Kedah, Perlis and Sabah. Rainfall for the East Coast (Kelantan, Terengganu, Pahang) is expected to exceed >60% (about 600mm) above normal levels.

On-the-ground reports from agricultural groups in Kelantan, such as the Kelantan Farmers Association (PESAK)), indicate that 26,000ha of paddy fields have been submerged in flood waters. Some of these fields were only recently sown with seeds a few weeks ago. The sowing process for January 2025 had reportedly been already delayed due to earlier water supply issues with many farmers already unable to plant paddy for three consecutive seasons.