Your 10 Questions about Malaysian palm oil

Tan Sri Yusof Basiron Malaysian Palm Oil Council CEO answers ...
The Star 13 Mar 10;

What does the Malaysian Palm Oil Council (MPOC) do? – PG Sheng, Batu Pahat

MPOC was formed in 1990 to carry out market development and promotional activities for Malaysian palm oil globally. We have nine regional offices abroad – in Shanghai, Mumbai, Lahore, Dhaka, Istanbul, Cairo, Brussels, Durban and Washington DC – to support, promote and venture into new markets for the industry. It is funded by a cess of RM2 per tonne levied on palm oil produced.

What did the MPOC achieve in 2009? – Bulbir Singh, Seremban

Some of the most successful activities for the past year include holding lively debates in Europe with members of the European Parliament, with the support of international think-tanks; engaging with political and regulatory audiences in the US; hosting frank roundtable discussions with NGOs; and running European Parliament and media field trips to Malaysia. On the marketing front, the Palm Oil Trade Fair and Seminar (POTS) has become our signature event and a platform for the palm oil trade to deliberate and discuss the latest trends and changes in the market. Corporate social responsibility programmes are carried out through the Malaysian Palm Oil Wildlife Conservation Fund set up by the council. While the main aim is to facilitate conservation education and programmes on endangered species, the green fund has been successfully used to address and manage various other biodiversity conservation efforts in the country.

Our strategy is to ensure that policymakers, downstream users and consumers understand the facts about palm oil. Our task is to create adequate demand for palm oil to ensure price stability. Since a steady price level reflects a well-developed demand, the MPOC’s success is reflected through the remunerative prices enjoyed by palm oil producers in recent times.

Most of the palm oil mills in Malaysia are not ‘green’ as their effluent is not treated using green technology. What will the MPOC do when the European Union (EU) countries enforce the rule which will result in them buying palm oil from ‘non-green’ palm oil mills at discounted prices? – KL Low, Petaling Jaya

Processing is only one step in the palm oil production chain. Palm oil is ‘greener’ than other vegetable oils because it consumes less energy and produces more energy.

There are other major sustainability benefits in the palm oil processing chain. Palm oil effluent and empty fruit bunches have been used as fertiliser, while kernel shells have been used in the construction industry. It is also not correct to say methane is not captured during milling. There are many palm oil mills that are fitted with effluent and methane capture. These in turn are used to produce electricity and compost. There is always room for improvement, and capturing methane is one way.

We are not aware of such an EU rule. However, an EU development that does bother us is the proposal to restrict biofuel imports from developing countries so as to favour biofuel produced in the EU, which is more expensive and far less sustainable. This looks like just another trade barrier to cheaper and better products from the developing world.

You have been very vocal in defending the oil palm industry against allegations that it harms the environment. But it seems to have no effect. Clearing jungle for food is perfectly all right. How do you intend to carry on from here? – Seah, Kuala Lumpur

Conversion of forests and jungles to expand production of staple foods has been a traditional way of meeting the global demand for food. There is legitimate concern over the protection of biodiversity of the jungles and natural forests. This is achieved by setting aside properly designed areas for conservation. It is not necessary to conserve all jungle. Parties to the United Nations Convention on Biodiversity decided many years ago that 10% of the world’s forests needed to be reserved to preserve forest biodiversity. In Malaysia, more than 50% of the country has been set aside for that purpose – the average in Europe is 25% – in a commitment we made at the 1992 Rio Earth Summit. Palm oil is not produced on this land but on the additional 25% set aside for agriculture.

The remaining area can and should be used to produce food for both Malaysia and the rest of the world, as well to create jobs for Malaysians and to reduce poverty. Land earmarked for agricultural development will be used to expand palm oil production in Malaysia, but it will not be the only way to increase production. Improved practices mean that, over time, the amount of palm oil from each hectare of land will certainly increase.

As I have spent many years in R&D for the oil palm industry, I am a firm believer in the science of palm oil. I will continue to use my knowledge of science to argue and provide counter-arguments to support the sustainability of the Malaysian palm oil industry. My views can also be read at my blog (www.ceopalmoil.com).

There is acute labour shortage in the oil palm plantations. With the dwindling labour supply from neighbouring countries, what should Malaysia do? – M Daniel, Miri

The industry should continue to optimise labour utilisation by increasing the use of mechanised tools. Hand-held motorised harvesting machines are available and can reduce labour requirement by 50% or more. To reduce handling and processing, and labour requirement, future fruit bunches designed through breeding and genetics will have high oil content. As long as Malaysia offers well-paid employment, there are huge labour sources that can be attracted from surrounding countries.

How will the Malaysian palm oil brand differentiate our palm oil from the oil from Indonesia? Do you believe branding will help combat the Western countries’ negative perceptions of palm oil? – Ken Tan, Alor Star

Malaysian palm oil is already sustainably produced. Consumers can easily see this from material on public record and from certification labels such as that provided by the Roundtable on Sustainable Palm Oil (RSPO). Malaysian palm oil is exported to more than 150 countries and has gained brand recognition for its reliable supply, consistent good quality and favourable price.

The anti-palm oil campaign in Europe is not based on knowledge of how Malaysian palm oil is produced. Instead, it is the result of deliberately misleading information circulated by environmental activists groups that are opposed to any use of biofuels in Europe because they believe the substitution of fossil fuels with biofuel will reduce the pressure on producers of fossil fuels to cut back. These activists also oppose biofuels made from rapeseed, sugarcane, soybean and corn grown in other parts of the world. They have attacked palm oil because it is the cheapest and most effective biofuel. They do not care that curbing the oil palm industry would reduce economic growth and endanger jobs in poor countries.

As a scientist, do you believe crude palm oil has what it takes to gain world market acceptance as food and biofuel feedstock? – S. Ramasamy, Kuantan

The steady increase in demand for palm oil demonstrates that it is already proven as a food staple. The world’s population is expanding steadily and standards of living are increasing. Demand for vegetable oil will steadily increase, and we look forward to serving that market. Palm oil is favoured for its proven nutritional and functional attributes and competitive prices. Biofuel based on palm oil has already been demonstrated as an effective fuel. Demand will increase so long as governments create incentives to use biofuels.

I’ve been hearing a lot about this new environment issue, the Water Foot Print (WFP), which is said to be an emerging concern in the US. What is WFP and its impact on Sabah oil palm planters? – Siti Khalid, Kota Kinabalu

The WFP concept is new and not yet fully developed. The idea is that the amount of water consumed and ‘embedded’ in any product should be measured, presumably as way to encourage more sustainable use of water. Use of water can already be measured, and any producer should ensure that water is not wasted. The concept that water might be ‘embedded’ in a product as a result of water being used to grow and process components, and that it can then can be measured, has no technical basis, to my knowledge.

The suggestion that use of water by palm oil in tropical zones should be directly compared with use of water for, say, rapeseed in temperate zones, ignores the fact that there is higher rainfall in the tropics. The tropics are also hotter. Does that mean people there waste natural heat?

Is it true that World Growth, an industry group headed by Alan Oxley, an Australian lecturer and sceptic about climate change, is sponsored by the MPOC to help dispute anti-palm oil allegations? – Ross Tan, Ipoh

I am not aware that World Growth represents any industry. We perceive it to be a pro-development NGO. I believe it is being criticised because it has been producing research that warns against environmental campaigns developed by other Western NGOs, which could increase poverty. I suggest you direct this question to World Growth. To help counter the anti-palm oil allegations made by western NGOs, the MPOC employs a number of PR firms and government relations experts.

How strong is the working relationship between the RSPO and the MPOC, especially in convincing major palm oil buyers from the EU and the US that Malaysian palm oil is sustainably produced? – KS Lee, Johor Baru

The MPOC supports the development of the RSPO as a business-to-business initiative to certify palm oil in meeting the demands of a discerning market. Our industry can be proud to be the first to bring RSPO-certified palm oil to the world market. The MPOC has provided funds to industry associations to attend or hold RSPO meetings to ensure the roundtable moves forward. As sustainable palm oil is already being traded in the global market, in our marketing campaigns, we often offer RSPO-certified palm oil to buyers.

Unfortunately, although the industry has lived up to its side of the bargain in conforming to sustainability requirements, its ‘green’ credentials have yet to excite more buyers.