The Palm Oil

Oil palm, Elaeis guineensis, was introduced to Malaya in 1870 from West Africa. This hardy crop starts bearing fruit within 2 1/2 to 3 years and keeps bearing fruit for up to 25 years, making it the longest yielding crop in the world.

The fleshy outer layer produces crude palm oil and the seed yields palm kernel oil.

Palm oil is used in a variety of industries from the commercial manufacturing of food and beauty products to the manufacturing of non-food products.

Wednesday, November 24, 2010

British firms mostly support Malaysian palm oil

By HANIM ADNAN
nem@thestar.com.my 

But the country urged to step up promotional efforts

LONDON: Top British retailers and food manufacturers are mostly supportive of local palm oil but they want Malaysia to step up its promotional efforts and communication strategies to heighten the awareness among British end-consumers of the sustainable credentials of the commodity.

This was unveiled during a dialogue session between Britain's palm oil retailers/end-users and the Malaysian palm oil delegation headed by Plantation Industries and Commodities Minister Tan Sri Bernard Dompok at the Malaysian High Commission in London on Friday.

While the interest in palm oil usage is good in Britain, the Malaysian delegation comprising the chiefs of the Malaysian Palm Oil Council (MPOC), Malaysian Palm Oil Board (MPOB) and Malaysian Palm Oil Association (MPOA) was told there were still many misconceptions about palm oil among British consumers.

Many consumers are heavily influenced by the anti-palm oil campaigns of NGOs, which had extensively been playing up environmental issues such as the killing of orang utans, biodiversity and rainforest destruction, and impact on global climate change, said J. Sainsbury Plc branding director Judith Batchelar.

Sainsbury is one of Britain's top three grocery retailers.

Batchelar said: We seem to be getting more emails (from our customers) questioning the qualities of palm oil and its sustainability issues compared with other vegetable oils sold in the market.

Tesco Plc corporate responsibility director Ruth Girardet concurred, saying the retail chain was also constantly pressured by the Western media and NGOs (or non-governmental organisations) on looming issues concerning palm oil.

As a retailer, we share the equal responsibility to explain to our customers about palm oil. We need to know that our suppliers adhere to the Roundtable on Sustainable Palm Oil (RSPO) certification.

In fact, Tesco is committed to using only certified sustainable palm oil by 2015, Girardet said.

Nestle UK Ltd corporate communications director Ian Rayson, meanwhile, said Malaysia must adopt a pro-active communication approach when countering the various allegations and misinformation about palm oil.

Malaysia should be telling a tomorrow's story. It is in danger of putting a defensive stance by continously comparing palm oil with our local crops like rapeseed and sunflower oils.
While palm oil may be the most efficient oil in terms of production, we (Europe) however cannot plant palm oil simply because of the unsuitable climate.

Rayson said Malaysia should focus on a more positive theme, like how palm oil could feed the world. It is also important for Malaysia to state its commitment where 58% of its land area is forest cover.

Europe's biggest biscuit maker United Biscuits (UK) Ltd, meanwhile, has targeted that by the end of 2011, all its palm oil is certified as sustainable and delivered through supply chains that are fully segregated from non-certified palm oil.

Its fats and oils director Dr Simon Roulston said: We will use only RSPO segregated, sustainable palm oil so that we can be sure the palm oil in our products is the oil from the sustainable plantations.

Currently, we have reached 70% usage of RSPO segregated palm oil.

And while Matheson & Co senior director Simon Keswick questioned the credibility of the RSPO certification, MPOC chairman Datuk Lee Yeow Chor said Malaysia supported the RSPO as it was the world's first certification programme for palm oil where companies had to adhere to its 24 strict principles and criteria.

MPOC is working with a new media company to come up with blogs, contests and short video clips to promote palm oil in Europe as part of efforts to counter the negative publicity over palm oil.

He suggested that British retailers and end-users of palm oil work together with MPOC to spread the good message on palm oil.

While many European consumers insist on RSPO certified palm oil, MPOA chief executive officer Datuk Mamat Salleh noted that the offtake for the premium oil was still not good.

Dompok, in summing up the dialogue session, said palm oil had become a victim of its own success. However, Malaysia will continue to put a clear message across that palm oil is a sustainable crop.

 

Malaysian Palm Oil  

Environmental Management in the Malaysian Palm Oil IndustryThe potential usage of oil palm biomass for the production of energy: With Sampling and Malaysian Case StudiesIndustrial Technology Development in Malaysia: Industry and Firm Studies (Routledge Studies in the Growth Economies of Asia) 

Friday, November 19, 2010

Positive Developments Despite Anti-palm Oil Lobby

This news analysis is written by national newswire Berita Nasional Malaysia (Bernama) editor-in-chief Dato' Yong Soo Heong.
KUALA LUMPUR, May 5 (Bernama) -- Malaysia's palm oil industry is worth about RM50 billion annually and chances are that revenue may even touch RM60 billion this year, if current prices remain steady until the end of the year.

That crude palm oil is being sold at RM2,550 a tonne is certainly good news for planters, smallholders and all those associated with the industry.

But then there are detractors. It has been reported that the European Union (EU), through its environmental ministries and commissions, has been involved in funding up to 70 per cent of the operating budgets of environmental NGOs in efforts to paint a not-so-rosy picture about palm oil.

And these NGOs have been viciously campaigning against palm oil imports into the EU, especially for biofuels, says Tan Sri Dr Yusof Basiron, chief executive of the Malaysian Palm Oil Council, who regards this as a "senseless and immoral attack on exported commodities such as palm oil produced by developing countries."


Writing in his blog, he said, such funding implicates the EU for creating barriers to trade for agricultural products from developing countries. "Unlike the EU, developing countries do not have access to financial resources to fight such government funded vicious campaigns. The eventual outcome will be untold miseries where poor farmers in developing countries lose their source of income as their export commodities are unable to enter the EU market," he said.


This is something which palm oil-producing countries will have to seriously address if the livelihood of their planters and farmers is to be safeguarded. Almost a million people are directly employed by the palm oil industry in Malaysia.


Interestingly, a campaign by Friends of the Earth to pressure the European Commission (EC) to rule "a tree plantation is not a forest" that restricts the recognition of palm oil as a renewable biofuel in the EU may have failed.


According to a newsletter titled "Palm Oil - Green Development Campaign" produced by Washington-based pro-development NGO World Growth, this means that the EC may classify oil palm plantations as forests, which would therefore meet the sustainability criteria of the EU's Renewable Energy Directive.


Under the directive, land which used to contain primary forest prior to 2008 but no longer does, cannot be used for biofuel feedstock to meet the EU's 10 per cent target. It has been reported that the draft guidelines define a "forested area" as "areas where trees have reached, or can reach, at least heights of five metres, making up a crown cover of more than 30 per cent". They would normally include forest, forest plantations and other tree plantations such as palm oil.


"The EC's position would therefore recognise that the important property of tropical forests for climate change policy is the high sequestering capacity of tropical foliage, tall wooded plants and multi-decade crop rotation. Short rotation coppice [the practice of repeatedly cutting young tree stems down] may qualify if it fulfils the height and canopy cover criteria," the newsletter stated.


It would seem that the EC has recognised the environmental benefits of palm oil as highly energy efficient, high yield and economically beneficial biofuel as the oil palm trees sequester or remove more carbon dioxide than other biofuel crops.


Another development that has put palm oil in positive light is research from Wageningen University in the Netherlands which shows that "palm oil is the most efficient energy crop." The university's finding is a rejection of environmental NGOs and the anti-palm oil lobbyists who consistently claim that palm oil is unsustainable.


Its research found that palm oil, sugar cane and sweet sorghum are currently the most sustainable energy crops. These commodities also produce "far smaller quantities of greenhouse gases than fossil fuels". The university's analysis considered nine different energy crops against nine different sustainability criteria with palm oil coming out on top while biofuel from maize from the United States and wheat from Europe scored far lower.


The report's author, Sander de Vries, concluded that sustainable sugar canes and oil palms get the most energy per hectare and cause the least environmental damage. De Vries also highlighted a major advantage of the oil palm crop was that, unlike other energy crops, it produces enough residue to power the oil extraction processes.


Another positive development for palm oil took place in the European Parliament recently when Dr Gernot Pehnelt, founder and director of GlobEcon, an independent research and consulting institute based in Germany, released a new study that revealed the prejudiced nature of the EU's Renewable Energy Directive towards foreign biofuels.


The report, entitled "European Policies Towards Palm Oil: Sorting Out Some Facts," demonstrated that the assumptions contained in the directive about the ecological impact of foreign biofuels reflected political and not scientific or economic reality. Pehnelt came to the defence of the rich biodiversity in oil palm plantations, their excellent crown cover that oil palms provide and the yield per hectare advantages of this low-energy and low-fertilizer crop.


"Sadly, many of the claims that foreign biofuels, specifically palm oil, are a threat to the environment are seriously flawed, some even completely unfounded," he said, adding that the side effects of the flawed policies could give rise to political friction and trade disputes to severe economic handicaps for developing countries.


"This new study makes a strong case that the directive discriminates against non-EU producers of biofuels, such as Asian palm oil. Perhaps most importantly, palm oil acts as a substantial driver of economic growth in the developing world, drastically reducing hunger and poverty in regions that actively cultivate this valuable crop.


"It's time for Europe to not only recognise the energy and environment benefits of palm oil, but also the suffering in low-income, tropical countries that palm oil critics continue to perpetuate," said Pehnelt, who has been invited by MPOC to speak on "European policies towards palm oil - setting the record straight" at the International Palm Oil Sustainability Conference in Kota Kinabalu from May 23 to 25.


The MPOC says that the conference will feature the latest developments, breakthroughs and technologies related to the sustainable development of the palm oil industry, with a focus on major issues such as Life Cycle Assessment, carbon footprint, sustainable production, certification and branding, biodiversity conservation and the corporate social responsibility of the palm oil industry.


Over the years, palm oil has emerged to have a huge multiplier effect to the Malaysian economy, supporting some two million livelihoods across many sectors. Additional workforce is also required to run downstream activities as palm oil is a versatile commodity. It is not just palm oil, but also palm kernel oil and palm kernel cake, which have different market and applications. Oil palm biomass and methane can also be used to produce electricity.


Currently, there are 600 million oil palms in Malaysia that could be also harvested and converted into fibre products, including medium density fibre boards as well as pulp and paper. Oil palms are also harvested to make furniture.


"Put all this together, palm oil is a very important and vibrant industry, which makes a lot of money for the country," said MPOC's Yusof. Malaysia has been working very hard to make its palm oil industry environmentally-friendly and socially responsible. Oil palm is only planted on land designated for agricultural production.


Today, Malaysia still maintains 56 per cent of its total land area under forest, thereby keeping its pledge made at the 1992 Rio Summit to keep at least 50 per cent of its land area under forest intact. It is certainly food for thought for the detractors.




Palm Oil Industry

Market Power: Empirical Analysis in the Indonesian Crude Palm Oil IndustryWhat's in it for me?: Working with competitors in the palm-oil industry: To improve environmental sustainability and competitive advantage?The Palm Oil MiracleThe Oil Palm (World Agriculture Series)Commerce and Economic Change in West Africa: The Palm Oil Trade in the Nineteenth Century (African Studies)The Up SagaPalm Oil and Protest: An Economic History of the Ngwa Region, South-Eastern Nigeria, 1800-1980 (African Studies) 
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Sunday, November 14, 2010

Performance of Malaysian Palm Oil Industry on October 2010

SEPTEMBER(r) OCTOBER(p) DIFFERENCE
QUANTITY (%)
PRODUCTION (Tonnes)

CRUDE PALM OIL



P. Malaysia
866,790

895,859

29,069

3.35
Sabah

472,983


507,820


34,837




7.37


Sarawak


223,139


232,881


9,742


4.37
Total
1,562,912

1,636,560

73,648

4.71
PALM KERNEL

395,455

407,378

11,923

3.02
CRUDE PALM KERNEL OIL

167,121

206,933

39,812

23.82
PALM KERNEL CAKE
184,964

229,573

44,609


24.12
STOCK (Tonnes)
CRUDE PALM OIL


P. Malaysia 456,441 472,303 15,862 3.48
Sabah 325,364 351,796 26,432 8.12
Sarawak 147,420 144,166 (3,254) (2.21)
Total 929,225 968,265 39,040 4.20
PROCESSED PALM OIL



P. Malaysia 382,949 437,299 54,350 14.19
Sabah 303,246 305,394 2,148 0.71
Sarawak 94,493 81,882 (12,611) (13.35)
 Total 780,688 824,575 43,887 5.62
TOTAL PALM OIL



P. Malaysia 839,390 909,602 70,212 8.36
Sabah 628,610 657,190 28,580 4.55
Sarawak 241,913 226,048 (15,865) (6.56)
 Total 1,709,913 1,792,840 82,927 4.85
PALM KERNEL 156,286 118,784 (37,502) (24.00)
CRUDE PALM KERNEL OIL 137,204 154,209 17,005 12.39
PROCESSED PALM KERNEL OIL  108,956 124,797 15,841 14.54
TOTAL PALM KERNEL OIL 246,160 279,006 32,846 13.34
PALM KERNEL CAKE 226,248 232,290 6,042 2.67
EXPORT
PALM OIL 1,469,005 1,460,241 (8,764) (0.60)
PALM KERNEL OIL 114,503 88,962 (25,540) (22.31)
PALM KERNEL CAKE 252,749 257,612 4,863 1.92
OLEOCHEMICAL 171,950 177,450 5,500 3.20
BIODIESEL 10,011 0 (10,011) (100.00)
IMPORT (TONNES)(q) Import
CRUDE PALM OIL 85,526 62,476 (23,050) (26.95)
PROCESSED PALM OIL 0 7,819 7,819 0.00
PALM OIL 85,526 70,295 (15,231) (17.81)
TOTAL PALM KERNEL OIL 36,156 30,878 (5,278) (14.60)
PRICE (1% OER) (Local Ex-Mill) )
FFB (AVERAGE RM/TONNE) 29.38 31.44 2.06 7.01




Explanatory Notes:
(p) Preliminary
(q) The import and export figures are based on information extracted from Customs No. 1 and 2 (Rev. 8/89) received up to 10.00 a.m., 10 November 2010. The export date refers to that as authorised by the Customs Department.
(r) The figures for the month of September 2010 are revised by taking into account corrections made by the licensees and from late receipt of Customs No. 1 and 2 (Rev. 8/89) after 11 October 2010.
(s) It refers to the total physical amount of crude and processed palm oil kept at the premises of mills, refineries, bulking installations, and oleochemical plants as at 31 October 2010.



Palm Oil Futures
On the Clean Road Again: Biodiesel and the Future of the Family Farm (Speaker's Corner)Biofuels: Securing the Planets Future Energy Needs (Green Energy and Technology)Power Hungry: The Myths of "Green" Energy and the Real Fuels of the FutureFuture Scenarios: Mapping the Cultural Implications of Peak Oil and Climate Change
Oil Palms and Other Oilseeds of the Amazon (Studies in Economic Botany)Palm Oil and Protest: An Economic History of the Ngwa Region, South-Eastern Nigeria, 1800-1980 (African Studies)What's in it for me?: Working with competitors in the palm-oil industry: To improve environmental sustainability and competitive advantage?Environmental Management in the Malaysian Palm Oil Industry