Palm oil: Sustainability criteria and certification to gain prominence post-Covid-19

Palm oil: Sustainability criteria and certification to gain prominence post-Covid-19
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KUALA LUMPUR (May 12): Sustainability criteria will become more important for palm oil in a post Covid-19 world.

Sustainability certification will become more important post-Covid-19 and the Malaysian palm oil industry has to lead the way, said U.R Unnithan, chief executive office at vegetable oil consulting firm Sumwin Global Pte Ltd, in response to a question on the impact of Covid-19 on at the Malaysian Palm Oil Council (MPOC)’s webinar "Mitigating the impact of Covid-19 on the Malaysian Palm Oil Trade" held today. 

“Increasingly post Covid-19, there will be more and more emphasis on sustainability. We cannot run away from it. It is in the best interest of the palm oil industry that we put up the best front as far as sustainability is concerned,” he said. 

Unnithan said consumers post Covid-19 would be more concerned around sustainability, as part of a bigger concern over the environment

Malaysian Palm Oil Association (MPOA) Chief Executive Datuk Mohamad Nageed Wahab pointed out that the Malaysian palm oil industry was already producing a “big chunk” of certified sustainable palm oil (CSPO), but highlighted no one was taking it up. 

“Pre-Covid-19 nobody was taking CSPO up. So we were not affected in terms of the production of CSPO. I do not see any issue in beefing up demand for CSPO,” Nageeb said. 

However, Sime Darby Oils Managing Director Mohd Haris Mohd Arshad highlighted low prices will not incentivise smallholders to go for certification. 

“They [smallholders] will continue to be marginalised and left behind, because for them, they can barely make it in terms of trying to make ends meet. 

"Covid-19 will have an adverse impact on the need to get smallholders to get on the certification bandwagon. Unless we address that, certification will always be a process for those who can afford it,” he said at the event organised by the Malaysian Palm Oil Council. 

He added that the market is looking beyond the Malaysian Sustainable Palm Oil (MSPO) standard or Indonesian Sustainable Palm Oil (ISPO) standard, but now, there is a push for other standards such as  Roundtable on Sustainable Palm Oil (RSPO) certified palm oil as well. 

Attaining such certifications cost money, hence Haris' view that CPO current prices will not incentivise smallholders to pursue certification.

The third month CPO futures closed at RM2,030 per tonne, down 33.24% year to date.

See also:
Palm oil use in oleochemical industry to rise on personal hygiene product demand 

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