Personal note: Previous reports have indicated many companies were reluctant to buy palm oil claimed to be from a sustainable source until they were 100% certain of the
oil's pedigree. Who can blame them, when to claim a product, maybe dozens of products, are from a sustainable source only to be exposed later as misleading their customers after a supplier was found to be dishonest. Millions of pounds and company reputations are at stake and I think if we were a CEO of such a company we would want the 100% proof that palm oil is from a truly sustainable source. Passing on the cost of sustainable oil to customers is not an issue - can you imagine how much a premium paid for a barrel of sustainable palm oil might add to a packet of biscuits? Maybe a penny. Look at how much more we all pay for Fair Trade products. The problem at the moment is the integrity of palm oil and its Southeast Asian suppliers.
Tue Oct 27, 2009
By Niluksi Koswanage
KUALA LUMPUR, Oct 28 (Reuters) - Most European palm oil buyers have shunned expensive eco-friendly palm oil, derailing efforts to preserve rainforests, environment group WWF said on Wednesday.
A scorecard by WWF showed only ten of 59 European manufacturers and retailers have sourced palm oil from Southeast Asian producers who do not fell rainforests and destroy wildlife. Among the top ten are Unilever (ULVR.L) and Cadbury (CBRY.L).
As of October, less than a fifth of the 1 million tonnes of palm oil certified as environmentally-friendly has been bought, WWF data showed, although market uptake was on the rise in the last four months.
WWF issued the scorecard a week before the industry-driven Roundtable of Sustainable Palm Oil (RSPO) meets in the Malaysian capital to assess the development of a green standard for top palm suppliers Indonesia and Malaysia.
The world's most traded edible oil is used in products ranging from shampoos to biofuels. The European Union, the top market, buys around 3 million tonnes a year.
"It is time to hold major palm oil users to account for their policies and actions," said Rod Taylor, director of the forests programme at WWF International, in a statement.
"Although many companies have a long way to go, the performances of the top companies in the scorecard signal to the rest of the industry that it is possible to turn commitment into action and transform the market."
The scorecard, which took six months to complete, tracked the companies' purchasing decisions, their willingness to join the RSPO and their own green policies.
HARD TO SELL GREEN PALM OIL
Many European firms have said they faced an uphill task convincing price-sensitive shoppers to buy pricier, eco-friendly palm as the global economy struggles to recover.
The British unit of Swedish oils and fats manufacturer AarhusKarlshamn (AAK.ST) had even mulled discounts for its consignment of palm oil certified under RSPO. [ID:nKLR402481]
Palm oil undergoing an ethical certification process trades at a $10-40 premium to wholesale prices that are currently at $645 a tonne, eroding its discount to rival soyoil.
WWF, a member of the RSPO, said 28 companies had yet to purchase green palm oil in a big way despite putting policies and procurement systems in place. Another 19 have taken little or no steps to curb their use of non-certified palm oil.
European firms' slow uptake of certified palm oil has angered palm producers in Malaysia, who say demands for the industry to become more environmentally friendly are merely a trade barrier in disguise. [ID:nKLR32745]
"There is very little love lost between the producers and consumers on this issue and it could complicate the progress we have made to make palm oil green," said Vengeta Rao, secretary general of the RSPO. (Editing by Michael Urquhart)