"Green" palm oil sales expected to pick up

Aloysius Bhui, PlanetArk 27 Nov 08;

JAKARTA - Palm oil producers in Indonesia, Malaysia and Papua New Guinea may sell 1 million tonnes of "sustainable" palm oil next year, up ten-fold on 2008 although still only a tiny fraction of global sales, officials said.

Under fire from green groups and some Western consumers, the palm oil industry established the Round Table on Sustainable Palm Oil (RSPO) in 2004 to develop an ethical certification system, including commitments to preserve rainforests and wildlife.

RSPO palm oil sales have been slower than initially envisaged and if next year's target is reached would still represent only 2.6 percent of the total output of Indonesia and Malaysia, the world's top two producers.

"With just one and a half months left, sales of sustainable palm oil this year will not be as big as the certified output capacity," said Derom Bangun, a vice chairman of the RSPO.

The first sale of the certified products is due to hit the market this month 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.

A host of products on an average supermarket's shelves contain palm oil, ranging from margarines and biscuits to lipsticks, shampoo and detergents.

The issue of "green" palm remains contentious and some conservation groups argue that the current voluntary rules are ineffective in protecting the environment.

At an RSPO meeting last week, Agriculture Minister Anton Apriyantono defended Indonesia's drive to expand palm plantations despite calls from some green groups for a moratorium.

"The government has its own program of preserving our forests; we aim to keep 60 percent of our forests in addition to allocated protected forests," the minister was quoted by the Jakarta Post as saying in a statement at the conference in Bali.

Greenpeace said in a statement that RSPO was failing to take action against members who continued to destroy swathes of Indonesia's peatlands and forests.

"Sustainable palm oil continues to be a farce while RSPO stands exposed as a weak and ineffectual industry body," said Bustar Maitar, Greenpeace Southeast Asia Forest Campaigner.

Three planters -- Sime Darby Plantations Bhd and United Plantations of Malaysia, and New Britain Palm Oil Ltd of Papua New Guinea -- have so far been approved by the RSPO.

The three's combined certified sustainable palm oil output is 631,257 tonnes a year but they only started selling this month.

Additional output next year is expected to come from other companies to be certified, with at least four Indonesian companies -- PT Musim Mas, PT Phindoli, PT London Sumatra, and PT Sime Indo Agro having being audited and awaiting certification, said Desi Kusumadewi, a spokeswoman for RSPO Indonesia.

"We hope that in very near future, PT Musim Mas will get the certification. That will increase the output of sustainable palm oil," Kusumadewi said.

She said other Indonesian planters were expected to apply for certification next year, including PT Asian Agri.

Malaysia and Indonesia, home to more than 4 percent of the world's rainforests, produce nearly 85 percent of total palm oil.

According to Hamburg-based oilseeds analysts Oil World's forecast, Indonesia and Malaysia's combined crude palm oil output may be 36.89 million tonnes this year and 38.4 million in 2009.

(Editing by Ed Davies)