Sunday, June 7, 2009

The problem with palm

Mother Nature Network (MNN)

Using palm oil to make biodiesel may cause more trouble than it prevents.

21/04/2009 (Mother Nature Network (MNN)) - As fears of global warming continue to rise with gas prices, both corporations and environmentalists are looking into alternative fuel sources. Now, businesses abroad plan to make biodiesel from palm oil, a substance found in common household items like cookies, shampoo, and margarine. Toyota Motor Corp. announced in May that it will partner with Japan’s Nippon Oil Corp. to develop biodiesel from palm oil, and the Malaysian government approved 54 projects this year alone to create B100, a biodiesel based from 100 percent palm oil, the country’s main export.

But while biofuels are cleaner-burning and produce fewer greenhouse gas emissions than regular fuel, some environmentalists believe the costs of palm oil-based biodiesel may outweigh the benefits.

The problem in Malaysia and Indonesia, where more than 80 percent of the world’s palm oil is produced, is that in most cases, rainforest areas are completely cleared to create oil palm plantations. According to a 2005 Friends of the Earth report, oil palm plantations have been responsible for about 87 percent of the rainforest deforestation in Malaysia.

Not only does this practice wreak havoc on the countries’ megafauna (such as orangutans, Sumatran rhinos and tigers, Asian elephants, gibbons, and tapirs), it also causes significant pollution. The United Nations’ Food and Agriculture Organization estimates that 25 to 30 percent of the greenhouse gases released into the atmosphere each year (about 1.6 billion tons) comes from deforestation.

“When you turn a product into a world commodity, you get corporations involved,” says Tim Keating, executive director of Rainforest Relief. “Originally palm oil was collected by hand, but once you get corporations involved, you end up having forest clearing and mass plantations.”

Corporations first clear the land for its lucrative timber. Then they burn everything that’s left on the land, such as shrubs, stumps, and peat soil, which can smolder for three to four months before it’s finally extinguished, says Michelle Desilets, director of the Borneo Orangutan Survival Foundation, UK. Tree-felling combined with the burning creates a haze above the forest and releases tons of carbon dioxide into the atmosphere, contributing to the same global warming that biofuels are supposed to reduce.

Since Indonesian and Malaysian rainforests are some of the most diverse ecosystems on the planet, clearing these areas poses serious threat to countless species of plants and animals. Right now palm oil is mostly used in food products. But if the demand for palm oil-based biodiesel increases, the oil palm business will certainly expand, creating more deforestation and species destruction.

But despite the huge environmental impact palm oil-based biodiesel has, businesses interested in bottom-line dollars see a market for it.

“Palm oil is the cheapest source for biofuel, and, as we know, in the marketplace the cheapest wins,” said Shannon Coughlin, program director for Rainforest Action Network, in an e-mail.

Leland Tong, an advisor to the National Biodiesel Board, says though palm oil is not grown domestically and will not lessen dependence on foreign fuel sources, it does offer some perks as far as biofuels go. It has a higher freezing point than regular fuel alone; it’s renewable; and it’s similar in efficiency to other biofuel sources such as soybean oil.

Rainforest advocates suggest some more environmentally responsible alternatives to making biodiesel from palm oil. Desilets asserts that if there must be palm oil plantations, then they should be planted on already degraded land (such as rainforest that has been logged, but not cleared) to protect other high-conservation areas. Keating insists that the only solution is to lessen our dependence on fuel. And Coughlin suggests making ethanol from agricultural waste and switchgrass so that no land has to be cleared. But all agree that the current method of producing palm oil-based biodiesel is not the answer to our energy needs.

“We know that an increased market for palm oil imports will accelerate rather than stop climate change,” said Coughlin in an e-mail. “It’s crazy. We need to break the addiction rather than keep feeding it.”

Cutback on palm oil exports to India likely

By HANIM ADNAN

India may reimpose import duties on vegetable oils, analysts said

PETALING JAYA: Malaysia’s palm oil exports to India will likely register a cutback in the second half of this year due to India’s huge edible oils reserves and a possible re-imposition of import duties on vegetable oils, analysts said.

India had scrapped import duties on vegetable oils in April last year to keep prices at bay after inflation soared and oilseeds production declined.

Analysts said the latest development in the world’s second-largest edible oil consumer after China could disrupt the current healthy flow of local palm oil exports to India, especially during January to April.

“All will depend on the degree of the import tax re-imposition on palm oil. I believe if it is just 5% or 10% (import duty), it will still be manageable.

“However, if it goes beyond 20% on top of the current crude palm oil (CPO) price of RM2,600 per tonne, then exports in the coming months will definitely come down,” said CIMB Investment Bank Bhd analyst Ivy Ng.

Prior to India’s zero import duties regime, palm oil had been slapped with a 20% import duty.

According to the Malaysian Palm Oil Board (MPOB), local palm oil exports to India surged to 970,000 tonnes in 2008 compared with 511,167 tonnes in 2007.

Indian vegetable oil importers were seen increasing their uptakes over the past seven months, far beyond their normal requirement.

“This has resulted in huge edible oils reserves for end-May estimated at 1.7 million tonnes, exceeding the normal level of 1.1 million tonnes,” said an analyst with a foreign-based research house.

Last month, India was believed to have purchased over 800,000 tonnes of cooking oil, of which the bulk of about 700,000 tonnes were refined palm oil and CPO.

The analyst said: “This confirms our view that India’s astounding 76% edible oil import surge in the first four months this year has been for stockpiling rather than for consumption.”

He said Indian importers were busy stocking up on both crude and refined edible oils on fears that the recently-elected government in New Delhi would levy export and import taxes in the upcoming budget to be presented in parliament next month.

“If these taxes are imposed, the price of the commodity will increase more than the levy,” he added.

Meanwhile, a market observer said the export slowdown had started with the local palm oil shipment to India down to 121,000 tonnes in May from 163,000 tonnes in April.

MPOB is expected to release the latest May figures on palm oil export, production and inventory early next week.

Thursday, June 4, 2009

Malaysian palm oil output forecast cut

Oil Trading19/05/2009 (Business Times, India), Hamburg - Malaysian October 2008/September 2009 palm oil output is likely to reach only 17.8 million tonnes Hamburg-based oilseeds analysts Oil World forecast yesterday.

This was down from its previous estimate of 18.0 million tonnes.

The cut was made following surprisingly low Malaysian output in April, Oil World said. But Malaysian output would still be up on the 17.5 million tonnes produced in 2007/08.

Malaysia and Indonesian are the world’s leading palm oil exporters.

“We still expect Malaysian production to surpass the year-ago level in coming months but the increase anticipated for the full season is sharply below average at only one per cent,” it said.

“The sharp seasonal growth of production next quarter should allow a recovery of Malaysian palm oil stocks from the current low level to roughly 1.6 million tonnes by end-September, still down sharply from 1.95 million tonnes the year before.”

Malaysian April palm oil stocks were estimated on May 11 at 1.29 million tonnes by the country’s palm oil board.

Oil World’s October/September 2008/09 Indonesian palm oil production estimate remains unchanged at 20.2 to 20.3 million tonnes, up seven per cent on the season but again below the growth seen in recent years.

“World demand for palm oil continues to grow sharply this season, despite the production slowdown in Malaysia and Indonesia,” it said. “We forecast an increase in world consumption by 3.9 million tonnes this season, partly to compensate for the pronounced decline in soyoil supplies and use.” - Reuters


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Government 'greatly concerned' by palm oil production

19/05/2009 (The Independent) - The Government has joined calls for Britain’s best-selling household groceries to use sustainable palm oil.

The Environment Secretary Hilary Benn said the Government was “greatly concerned” by the impact of palm oil production in South-east Asia, where it causes extensive deforestation and threatens the survival of the orangutan and other rare animals.

Producers chop down forests in Sumatra and Borneo to plant high-yielding oil palms whose oil is poured into food, soaps and skin creams.

World Wildlife Fund (World Organizations)As the Independent disclosed earlier this month palm oil is in, or suspected to be in, 43 of the UK’s 100 best-selling grocery brands, including Cadbury Dairy Milk, Mr Kipling cakes and Dove soap.

It is often labelled as “vegetable fat” or “vegetable oil,” making it difficult for the public to exercise choice.

In his first intervention in the palm oil debate, Mr Benn told the Independent: “The UK Government is greatly concerned by the potential environmental impacts of unrestrained palm oil production, regardless of end use, and I want to see sustainability standards adopted to help halt damaging practices.”

The Cabinet minister added: “I am pleased that some UK businesses have already made commitments to using only sustainably-sourced palm oil and would strongly encourage others to do the same.”

His comments were welcomed by the World Wildlife Fund and will intensify pressure on food and household products firms to change their buying policies.

Last week WWF announced it would start scoring companies on whether they were matching their public commitments on sustainability with purchases of certified sustainable palm oil.

Saving the Oceans: Endorsed by the World Wildlife FundAlmost four per cent of global palm oil production has been certified sustainable by the Roundtable on Sustainable Palm Oil (Rspo) on the grounds that they have not been sited on recent rainforest land, limit pesticide use and treat workers well.

However since the first Rspo-certified supplies arrived in Europe in November, businesses have bought only 1 per cent of the amount available, 15,000 out of the 1.3m tonnes available. Unilever, which set up the Rspo with WWF in 2002, and Sainsbury’s are two companies which have bought the oil, which is about 15 per cent more expensive than normal supplies.

“This sluggish demand from palm oil buyers, such as supermarkets, food and cosmetic manufacturers, could undermine the success of sustainability efforts and threatens the remaining natural tropical forests of Southeast Asia as well as other forests where oil palm is set to expand, such as the Amazon,” saidDavid McLaughlin, WWF vice president of agriculture.

Global 200 World Wildlife Fund: Places That Must Survive (Journeys Through the World and Nature)Ginny Ng, WWF’s senior program officer for Borneo and Sumatra, urged companies to act quickly. She warned: “The tropical forests of Borneo and Sumatra are being cleared at such a rapid pace that the carbon emissions from this deforestation are greater than the industrial emissions of some developed countries.

“The orangutans, elephants, tigers and rhinos on these islands don’t stand a chance of survival if their forests aren’t protected. Creating a demand for sustainably grown palm oil is essential to their survival.”

WWF urged companies to make public commitments that they would use 100 per cent Rspo-certified palm oil by 2015.

Although most companies say they want to move to source palm oil sustainably, only a few have named a date when they will switch to an Rspo-only supply. Premier Foods says it will do so by 2011, United Biscuits by 2012, Sainsbury’s by 2014, and Unilever, Northern Foods, Kraft and

Tesco all say they will do so by 2015.

Terrestrial Ecoregions of the Indo-Pacific: A Conservation Assessment (World Wildlife Fund Ecoregion Assessments)Companies that have not set a date include Kellogg’s, Cadbury, Heinz, Mars, Nestle, Procter & Gamble, Reckitt Benckiser, Morrisons, Co-operative Group, Marks & Spencer, and Waitrose.

The Food and Drink Federation, which represents food manufacturers, said its members were fully aware of the need for palm oil to be from more sustainable sources and its “leading members” were actively participating in the Rspo.

“We hope other companies will follow this lead,” the FDF told the Independent.

“FDF fully supports the aims and the multi-stakeholder approach of the RSPO to bring more sustainable palm oil to the market. But the UK is only a small player in the complex global market for palm oil, importing approximately 1 per cent of the world’s annual crop”.