She said the industry needs to tackle the interlinked sustainability challenges, particularly relating to environmental, climate change and social issues.
“In order to do that, it will require leadership and I urge the Malaysian government, which has enormous muscle power, to get into this in a big way as it did when it chose palm oil (to be one of the income generators to the economy),” she said during the International Palm Oil Sustainability Conference 2020 (IPOSC 2020) virtual question and answer (Q&A) session today.
Among the challenges she highlighted is the European Union’s (EU) decision to phase out palm oil in transport fuels from 2030, the reduction in biodiversity and the threat of extinction of rare species.
Tsakok, who was one of the panellists during the two-hour Q&A session, noted that the industry should find solutions to increase fresh fruit bunches (FFB) production, despite the climate change that lowers the FFB and other agricultural yields, and address the alleged labour rights violation and land grabs from indigenous communities.
The crop, she noted, has been driving agricultural transformation, inclusive growth and poverty reduction in the country, and it is the most efficient way of satisfying the growing global demand for vegetable oil as it uses one-tenth of the land of its rival crops.
However, its very success makes it controversial, she said.
“Palm oil is new to me as I am from Mauritius and we grow coconut there… so it is fascinating to me to see how powerful palm oil is to Malaysia and how it has helped to eradicate poverty.
“However, as someone who is observing the industry from the outside, I also see that palm oil has ‘two faces’. On one hand, there are many wonderful things that you are doing, and you have, but on the other hand, there are a lot of ugly things too,” she said.
She noted that notable issues include the empowerment of the B40 group in the industry — namely the smallholders, issues of indigenous land, labour rights and deforestation.
Tsakok, who holds a PhD in Economics from Harvard University and a World Bank retiree, noted that despite the challenges, the industry can do better as palm oil is a versatile oil which has a lot to offer to the world.
Meanwhile, another panellist, IOI Corporation Bhd’s Head of Sustainability Dr Surina Ismail said that working with the Government is one of the best ways to manage the challenges faced by the industry.
“All along the supply chain, everybody must play their part in the upstream or the downstream sector.
“We must help and encourage the growers, especially the smallholders, to produce sustainably and get the recognition from big companies locally and abroad,” she said.
Meanwhile, commenting on the Certified Sustainable Palm Oil (CSPO), Roundtable Sustainable Palm Oil strategic stakeholder relations director Salahudin Yaacob said the certification is necessary for big and small players, allowing them to enter more markets.
“Currently, CSPO’s production is low. The Government, consumers and industry stakeholders need to work together to increase awareness on the CSPO.
“We need to enforce the requirement to make sustainable palm oil renowned and this can be achieved by producing only CSPO,” he said.
Two EU representatives, Frans Claassen and Paivi Makkonen said there should be more constructive dialogues between palm oil-producing countries and the EU Government.
They also stressed that having good governance to promote a healthy supply chain in the industry is crucial, as well as ensuring that no human rights are violated.
Closing the discussion, Sime Darby Plantation sustainability head Rashyid Redza Anwarudin said there are still a lot of work that needs to be done to improve the industry.
“We need to ensure the work we do is as inclusive. We have to remember that it’s an important industry in this part of the world. It has contributed in a major way to the social economy and development of the region.
“It has, more importantly, touched the everyday lives of the people,” he said.
The IPOSC 2020 is the Malaysian Palm Oil Council’s biannual conference that highlights the sustainability challenges and opportunities in the Malaysian palm oil industry.
This year’s conference is being hosted on a virtual platform, comprising two modules, in response to the global COVID-19 pandemic.
Module 1 today featured presentations from sustainability experts from the agriculture, research and palm oil sectors who shared their views on the efforts by global agricultural commodities towards achieving sustainability and carbon neutrality.
Module 2, on renewable energy, climate change and food security will take place from Oct 12-20, 2020.
Source : The Edge Markets
Credit: Workers sort bunches of harvested oil palm fruit at the Felda Global Ventures Holdings Bhd. palm oil plant in Besout, Perak.
Photographer: Goh Seng Chong/Bloomberg
KUALA LUMPUR: The local palm oil sector is poised to begin its recovery in the second half (2H) of 2020 following the easing of Covid-19 lockdowns globally.
This would, in turn, improve global demand from major consumers particularly China and India, said Boustead Plantations Bhd chief executive officer Ibrahim Abdul Majid.
The upstream oil palm plantation company predicted that stockpiles will dwindle in anticipation of better demand for edible oil in the global food supply chain.
“For the short-term, the sector is expected to remain impacted, we continue to adopt a longer-term view given the nature of our industry,” Ibrahim told the New Straits Times.
He is also optimistic for the year ahead given the crude palm oil (CPO) export tax exemption aimed at managing Malaysia’s stock level, which has to a certain extent lifted prices.
Ibrahim said Indian buyers had resumed purchasing Malaysian palm oil after a four-month gap following a diplomatic row, with buying spurred by a fall in domestic inventories and discounted prices.
“Even though the short-term prospects for the plantation sector are weak given the current environment, we are optimistic that prospects will improve as the world sees a gradual recovery,” he added.
Ibrahim said Malaysia Palm Oil Council’s (MPOC) had forecast CPO prices to hit a peak of RM2,594 per tonne in 2H, and this would improve Boustead Plantations’ bottom line.
“We expect to see enhanced fresh fruit bunches (FFB) production in 2020, due to the full-year consolidation of production from Tawai estates.
“At the same time, harvesters’ productivity which is addressed via our Transformation Programme is also expected to have a positive impact on FFB production,” he said.
Ibrahim said the company expected its average CPO price for 2020 to be in the range of RM2,400 to RM2,500, benefitting from the palm oil export tax exemption from July until December this year under the National Economic Recovery Plan and significant recovery in global palm oil demand from May.
“Demand is expected to be a key factor in determining prospects for CPO in 2020 and 2021.”
He added that the lingering effects of the Covid-19 crisis were likely to curtail disposable income particularly in relation to food in developing countries.
This, in turn, may curb the prospective uptrend in world consumption of oils and fats.
“We expect the large demand losses stemming from the lockdowns in the first-half of 2020 to be recouped by next year.
“Overall, this forecast is based on the assumption that the Covid-19 pandemic comes under reasonable control soon.”
Ibrahim, however, said if the pandemic did not come under control, this would put another round of downward pressure on all major commodities
Credit: NST By Ayisy Yusof – July 27, 2020 @ 8:22am