KLANG, May 28 (Bernama) – Sime Darby Bhd expects demand for certified sustainable palm oil (CSPO) to grow by at least 25 per cent as the European Union’s food labelling rule approaches its 2015 deadline.
Second Senior Vice President and Head, Global Trading and Marketing, Jasni Ahmad said the rule requires food manufacturers to specify the vegetable oil used in their food products.
“This gives a competitive advantage to CSPO as it has certified good agricultural practices with social responsibility and environmental engagement, and can somewhat brush off the negative campaign against palm oil,” he added.
He said demand for CSPO was currently driven by Europe, but only for palm stearin, the solid fraction of palm oil that is widely used in food products, and as such it was a challenge to find a market for palm olein.
Palm stearin represents only 20 per cent of the palm oil volume, while the remaining 80 per cent is palm olein, the liquid form.
He was speaking to reporters yesterday during a familiarisation trip to Carey Island and the Sime Darby Jomalina refinery plant which last year was recognised as a fully segregated producer of CSPO by the Roundtable on Sustainable Palm Oil (RSPO).
Sime Darby is a founding member of the RSPO. Its plantation arm adheres strictly to the RSPO Principles and Criteria which form the basis of certification.
It consists of eight principles and 43 criteria with 138 indicators.
The principles and criteria ensure no primary forest or high conservation value areas are cleared for new plantations, that plantations minimise its environmental footprint and the basic rights of local land owners, farm workers and indigenous people are fully respected.
Jasni said almost 98 per cent of Sime Darby’s palm oil plantation were certified by the RSPO with 100 per cent in Malaysia having already been fully certified.
He added, however, among the challenges faced with CSPO demand is that of the almost 10 million tonnes of annual production capacity in the market, only 52 per cent was purchased through the supply chain.
“The gap between supply and demand for CSPO is due to a number of other challenges.
“Among them is the logistical complexity of the palm oil supply chain, the lack of awareness about how and where industry can find CSPO and its derivatives in individual markets, and low consumer awareness of it in some others.
“China and India being the top consumers are not pushing for it yet. Currently both would go for the cheapest option in the market and not sustainable products,” said Jasni.
Meanwhile, Head of Sime Darby Jomalina, Tan Wee Teck said the refinery which was strategised to be a premium oil producer, had seen demand for its products increase by almost 7.5 per cent this year.
Refineries are an important link in the supply chain between upstream stakeholders (growers and mills) and downstream stakeholders (food manufacturers).
“Jomalina, being a fully segregated producer of CSPO has the edge here in producing the premium product as it has supplies that come from known RSPO certified and designated input resources.
“The SCPO supply comes from 12 segregated mills belonging to Sime Darby Plantation which processed the fresh fruit bunches from 38 certified Sime Darby estates,” Tan said.
He said the palm oil produced by the Sime Darby estates is of high quality as has a very low free fatty acid of below 1.2 per cent compared to the industry standard of not more than five per cent.
Jomalina, the biggest of the three RSPO certified fully segregated refineries in the world, is geared to meet the requirements of downstream stakeholders in the supply of sustainable palm oil refined products.
“With the capacity to process 1300 tonnes daily or 330,000 tonnes annually, we are able to meet demand from customers from Europe (40 per cent) and local (60 percent). The latest contract for a packed product with the RSPO logo, came from the United States,” Tan said.
Source : BERNAMA
