Tuesday, 20 May 2008

Certified Non-Rain Forest Palm Oil Set For Germany

Certified Non-Rain Forest Palm Oil Set For Germany

GERMANY: May 20, 2008

BERLIN - The first consignments of palm oil, certified as produced using farming which has not involve destroying tropical rain forests, will arrive in Germany in the second half of this year, the German edible oil industry association OVID said on Monday.

But palm oil certified under the programme Round Table for Sustainable Palm Oil (RSPO) could be up to 10 percent more expensive than non-certified oil, OVID Chairman Wilhelm Thywissen told a press conference.
However, it was not yet possible to make an accurate forecast of the price difference.

Asian and South American countries have been criticised by environmentalists for expanding palm oil production by cutting down tropical rain forests, in a controversy which has also been felt by industrial palm oil buyers in Europe and elsewhere.

"We are vehemently against tropical rain forests being destroyed in producing countries for cultivation of oilseeds," Thywissen said.
The European Union is discussing a programme to prevent palm oil produced on former rainforest land being used for EU biofuels production, but the RSPO would apply to both food and biofuel industries, he said.
The RSPO was established in 2004 on the initiative of environmental pressure group World Wildlife Fund, bringing palm oil industry and consumers together.

Juergen Keil, from the German unit of giant US commodity group Cargill, said the first consignments of certified palm oil for Germany this year were likely to come from Asia, probably Malaysia, Indonesia or Papua New Guinea.

Cargill, among the world's largest vegetable oil and oilseeds traders, was working to certify its own Asian palm oil plantations and was encouraging its supplies to participate, he said.

He would not comment on the likely volumes of certified palm oil likely to arrive, but said he hoped they would be significant.

Along with the costs of certification, certified palm oil would face substantial additional expense such as being transported and stored separately from other palm oil.

Some observers have doubts whether Germany's food processing industry will be willing to pay more for such certified products at a time when the country's giant discount supermarket chains are involved in an intense price war to attract customers into their shops.

But OVID Chief Executive Petra Sprick said the association believed there will be considerable interest in the palm oil even at a time of intense retail price pressure.

A major European processor, Unilever has already publicly stated it would use it, and she hoped others would follow.

When the certified oil is actually available, food processors would also be able to label their products as using ingredients only produced from sustainable farming.

"We firmly believe that these products will receive increased consumer demand," said Keil. "We believe a momentum will be generated which will create a transformation of the global supply system."

The palm oil initiative follows another voluntary agreement, the Round Table on Responsible Soy, which the oilseeds industry claims has put a virtual stop to destruction of tropical rain forest in Brazil for soybean cultivation.

(Editing by Ben Tan)
Story by Michael Hogan