Thursday, 24 July 2008

RSPO accreditation for four firms?


RSPO accreditation for four firms?

by Jose Barrock The Edge, Malaysia

KUALA LUMPUR: Four Malaysia-based plantation companies — IOI Corp Bhd, United Plantations Bhd, Kulim (M) Bhd and Sime Darby Bhd — are likely to secure the Roundtable for Sustainable Palm Oil (RSPO) certification in the next few weeks, industry sources said.

Another planter likely to get the accreditation from RSPO is Indonesia-based PT Musim Mas.

The RSPO certification is important to palm oil exporters because it opens up the European market to them. Buyers of crude palm oil (CPO) in Europe generally shy away from companies that do not practise environment-friendly planting and production.

They find it easier to justify the purchase of CPO and other palm products from companies endorsed by the RSPO.

The certification confirms that a company adheres to sustainable practices in the planting of oil palm and production of palm oil.

The RSPO was initiated about four years ago to promote the growth and use of the commodity in a sustainable manner through cooperation and open dialogue with stakeholders in plantation companies. Members of the RSPO include oil palm growers, processors and traders.

“Perhaps companies which have the accreditation could even charge more for their CPO in the near future. At present there is no distinction (between companies that have the RSPO certificate and those that don’t) but in due course it (the accreditation) will be a plus point, and possibly result in more business,” an industry stalwart said.

At press time, it is not clear what is the status of the other Malaysian companies such as Kuala Lumpur Kepong Bhd and PPB Oil Palms Bhd which had applied for the certification, but it is unlikely to adversely impact their business, at least in the near term.

Plantation companies such as Sime Darby, IOI Corp and KL Kepong have been raking in stellar earnings from strong CPO prices.

CPO hit an all-time high of RM4,200 per tonne in early March. The price has tapered off since then and is currently at about RM3,090 per tonne.
Sime Darby closed yesterday at RM8.10, up 25 sen, while IOI Corp inched up five sen to RM5.60. United Plantations and Kulim ended the day at RM11.50 and RM7.95, respectively.