Not Many Are Buying Sustainable Certified Palm Oil

WHILE it has been drummed into the ears of oil palm planters to be producers of sustainable certified palm oil (CSPO), the findings of the maiden WWF Palm Oil Buyers’ Scorecard on the assessment of palm oil purchasing practices among major European companies were indeed a big disappointment to palm oil producers.

Of the 59 European manufacturers and retailers assessed by the scorecard, only 10 companies such as Unilever, Sainsbury’s, Marks & Spencer, The Body Shop, L’Oreal, Asda and Coop Switzerland have shown strong commitment in purchasing the CSPO. Some have even indicated the target of 100% use of CSPO by 2015.

As of last month, only 19%, or 195,000 tonnes of the one million tonnes of CSPO in the market, had been taken up by European companies.

The result is quite a setback for many palm oil producers in Malaysia and Indonesia, which have painstakingly gone through the highly capitalised and rigorous time-taxing certification process under the strict Roundtable on Sustainable Palm Oil (RSPO) grouping that supports CSPO.

Some quarters have even indicated the lukewarm response from European buyers could complicate the progress of RSPO’s certification among planters who are serious about producing eco-friendly palm oil abiding to the earlier demands of Western consumers and NGOs.

The rationale given for the hard-to-sell CSPO was due to the global crisis whereby consumers prefer to buy non-CSPO which is cheaper than CSPO ones.

The price of premium CSPO had dropped significantly to about US$8 per tonne early this month from US$50 early this year as European buyers, including RSPO consuming members, failed to make full commitment to purchase the premium fuel.

Ideally, given its “sustainable” tagline, the CSPO premium should stay at US$30 to US$50 per tonne compared with the current wholesale CPO price of about US$645 per tonne.

So how will CSPO fare going forward? According to WWF, which is also a member of RSPO, many companies in Europe had also started to become aware of CSPO with some seen putting in place the right policies and practices for the usage of CSPO and also still had yet to commit by purchasing the premium oil.

While the quantities used may still be small in the coming months, perhaps RSPO – which comprises multi-stakeholders namely producers, retailers, NGOs and bankers – can somewhat play a bigger role in promoting the use of CSPO.

RSPO may have put in place mandating its non-producer members to publicly report their CSPO procurements. However, it was reported that some of RSPO’s own members had not even been sourcing for the CSPO.

Isn’t it ironic as even within the same RSPO grouping, there are members who are not keen to champion the cause of their producing members’ efforts in making crude palm oil sustainable?

Malaysia, for example, has about 157,000ha of oil palm plantations that are RSPO-certified producing about one million tonnes of CSPO annually. While big oil palm planters continue to get RSPO certified, there is also a similar move to get smallholders’ operations in Malaysia and Indonesia to be RSPO-certified.

Will there be an influx of CSPO to the world market should the lacklustre demand for CSPO continue to persist?

Source : The Star by Hanim Adnan

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