MPOA calls for halt to new RSPO certification?

“We want to see the current RSPO certified palm oil production of 5.1 million tonnes be fully taken up by Western buyers,” said MPOA vice-chairman Boon Weng Siew. Of the total RSPO-certified palm production, MPOA claimed that only 40% was taken up while the CSPO premium had plunged to only 30 US cents compared with US$50 per tonne in 2008.... Bek-Nielsen...said the world palm oil producers must unite and stressed that “We should not certify any new production units unless demand matches the supply of CSPO. It is time for the end-users to live up to their rethorics.”... An industry member of MPOA said the association might seek for a three-year moratorium to stop Malaysian planters from pursuing their on-going RSPO certification at the RSPO 9th Annual Meeting Roundtable in Sabah next month....“We will strongly push for this agenda,” he said. This is in view of the pledges given by Western food and consumer goods to use only CSPO in their operations by 2015.... reports The Star, 6 Oct 2011, "Malaysian Palm Oil Association won’t quit Roundtable on Sustainable Palm Oil," http://biz.thestar.com.my/news/story.asp?file=/2011/10/6/business/9638574&sec=business.

Khor Reports comment: Hot on the heels of last week's pullout from RSPO by GAPKI, Malaysia's key producer association affirms its membership, but calls for a halt to new certification. There has been a small glut in RSPO CSPO or certified sustainable palm oil, as the enthusiasm of producers for this sustainable product has not yet been met by sufficient buyer interest. Last year, we at Khor Reports speculated in our newsletter #2 that producers might seek to clear the overhang, but we had no idea then what might be the mechanism (download our report and refer to page 6, Option E: https://sites.google.com/site/khorreports2011/palmoil_strat_analysis/khorreport002-palm_oil-rspo_growers-100826.pdf?attredirects=0&d=1). It will be interesting to look out for corporate reactions to the recent moves by GAPKI and MPOA.

For more background, please refer to other postings in this blog, and Khor Yu Leng's article in Lipid Technology, "The oil palm industry bows to NGO campaigns," May 2011, http://onlinelibrary.wiley.com/doi/10.1002/lite.201100106/abstract.

Khor Yu Leng was interviewed for today's The Edge Daily: "Independent agribusiness analyst Khor Yu Leng, who has tracked sustainability certification practises, says oil palm players cannot be blamed for wanting a more level playing field with other types of vegetable oil producers. “RTRS, the standard for sustainable soybean, is more business friendly versus the RSPO, despite their being sister organizations,” she said. She thinks the palm players will move towards having more than one type of certification, to meet different market needs."