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.
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
“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
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
“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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