‘Green’ Palm Oil Planters Struggle to Find Buyers

JAKARTA: Palm oil planters in the world’s top

two producers Indonesia and Malaysia are struggling to find buyers for

their eco-friendly palm oil, an industry official said today,

threatening to slow momentum.

Under fire from green groups and some Western consumers, the palm oil

industry established the Roundtable on Sustainable Palm Oil (RSPO) in

2004 to develop an ethical certification system that includes

commitments to preserve rainforests and wildlife.

“As for

demand, the volume that is currently available versus the offtake, there

is a mismatch,” Vengeta Rao, secretary general of the RSPO, said on the

sidelines of a palm oil conference.

He said the industry had

so far sold only 15,000 tonnes of certified greed palm oil since the

first shipment last November while output might have reached around

600,000 tonnes.

“As volume starts to increase, demand tends

to lag behind,” said Rao, adding the current gap between demand and

output was not desirable and demand needed to be stepped up.

“So users will be asked to show their commitment to use green palm

oil,” he said.

He said the mills that have been certified had

the capacity to produce 1.5 million tonnes of palm oil annually now.

“Keep in mind that 1.5 million tonnes was suddenly available. Users

may have already had earlier buying commitments. They cannot cancel and

decide I am going to buy certified palm oil. So there is a lag,” he

said.

The first sale of the certified products hit the market

last November with a shipment from Malaysia to Rotterdam.

The 500-tonne shipment was produced by United Plantations, with Unilever

and Britain’s third-largest grocer J. Sainsbury among the buyers.

The issue of green palm remains contentious and some conservation

groups argue that the current voluntary rules are not effective in

protecting the environment.

Rao said some producers with

integrated operations had been using green palm for internal production

of byproducts, while others had sold it jointly with non-certified palm.

He said every six months there would be additional supply of 500,000

tonnes of green palm, meaning 3 million tonnes could be available by

2010.

“If demand does not pick up or come close to

production, the momentum will slow down. Companies will still seek

certification but the urgency to do so will ease,” he said, adding RSPO

needed to assess which side was not fulfilling its commitments.

Source : Business Times

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