Business

Friday June 22, 2012

RSPO certification for smallholders

By HANIM ADNAN
nem@thestar.com.my


Group plans mechanism to channel part of its revenue

KUALA LUMPUR: The Roundtable on Sustainable Palm Oil (RSPO) grouping is putting in place a mechanism to channel a portion of its revenue towards the certification of oil palm estates owned by independent smallholders in key markets such as Indonesia, Thailand and West Africa.

The RSPO had also set aside 300,000 euros to encourage smallholders to certify their plantations, said RSPO secretary-general Darrel Webber.

“This is to equip independent smallholders with better access to the international buyers in markets like Europe, the United States and even India, which are increasingly demanding for CSPO (certified sustainable palm oil) instead of the non-certified ones,” he said at a briefing yesterday.

The first batch involving about 5,000ha of oil palm estates belonging to independent smallholders from Thailand would undergo the certification process this year, said Webber.

Globally, independent smallholders contributed the largest to the total crude palm oil (CPO) production.

Globally, independent smallholders contributed the largest to the total crude palm oil (CPO) production. — AFP

In Thailand, independent smallholders contribute 70% of the country's total CPO production, while in Africa the figure stands at 80% and Malaysia and Indonesia, 40% each.

At present, RSPO has successfully certified several estates belonging to “schemed” smallholders managed by Felda Group in Malaysia.

In terms of CSPO production, Webber pointed out that Thailand was actively pushing to get the RSPO certification while India, which is a well-known big buyer of CPO, was currently opening new areas for oil palm plantations, showing strong interest to seek for RSPO certification.

He also expects total CSPO production under the RSPO framework to reach seven million tonnes by year-end compared with 5.6 million tonnes recorded last year.

Up till end-May, the CSPO production hit 6.4 million tonnes, covering a total production area of 1.3 million ha.

Indonesia currently tops as the largest CSPO producer followed by Malaysia and Papua New Guinea.

Company-wise, Sime Darby Bhd is the world's single-largest CSPO producer.

On the uptake of CSPO, Webber said: “There is this situation where many international buyers wanted to buy CSPO but does not know where to source them, while the CSPO producers and growers do not know who to sell to.

“The CSPO is still considered a niche product rather than a commodity, and I suggest CSPO producers to be more savvy in the promotion and marketing of the product to the key consuming markets.”

While it will be impossible for a 100% uptake in the CSPO due to logistic reasons, he said: “The CSPO uptake has increase steadily over the years from a mere 3% in 2008 to 50% in 2011, and now still growing.”

Currently, there were many national initiatives such as the Dutch Task Force, the Belgian Alliance and a few more from Germany and Britain making formal pledges to commit to RSPO's CSPO.

In another development, Webber said the group was in the midst of reviewing its fundamental principles and criteria (P&C), after five years since the RSPO certification begun.

“We want to make our P&C more effective and robust based on the significant ground experience of what works and what may not be pragmatic,” he added.

For Malaysia, he said the country had achieved significant milestones as the second-largest RSPO membership by country after Britain, contributing 45% to the total volume of global CSPO, making up 36% of certified grower companies worldwide. Almost 50% of the mills certified are from Malaysia.

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