Headlines

Consumer response to certified
palm oil products still
weak

Around 700 delegates from more than 35 countries began a two-day conference in Singapore on Wednesday in a continuing campaign to promote certified sustainable palm oil (CSPO) as a trademark for green consumer products.

Most large palm oil companies from the world’s largest producers, Indonesia and Malaysia, giant consumer products companies such as Nestle and Unilever, retail giants Wal-Mart and Carrefour, and environmental NGOs attended the 10th Roundtable on Sustainable Palm Oil (RSPO) to keep themselves appraised of the best practices in sustainable palm oil development.

RSPO is a non-profit association that unites stakeholders from six sectors of the palm oil industry — palm oil producers, processors and traders, retailers, banks and investors, environmental or nature conservation NGOs and social or developmental NGOs — to develop and implement global standards for sustainable palm oil.

But the momentum of the green consumer campaign could be in danger of slacking off due to the weak consumer response to CSPO products and the negligible price differences between certified and uncertified sustainable products.

“It’s not in consumers’ minds yet,” said Julian Walker Palin, head of corporate sustainability at Wal-Mart Stores Inc.

But Palin asserted that Wal-Mart had committed to dealing only in CSPO products by 2015 because the green consumer movement for socially, economically and environmentally sustainable products could no longer be stopped. Giant consumer group Unilever and Nestle also made a similar commitment.

“It needs a long education process to increase consumer awareness,” concurred Joko Arif, the sustainability manager of Carrefour Indonesia, which last July launched the sales of RSPO–certified cooking oil supplied by the North Sumatra-based Musim Mas Group.

Arif said all 84 Carrefour outlets in Indonesia had been selling Musim Mas-produced cooking oil bearing the RSPO trademark and the consumer response, though still rather lukewarm, was increasing.

RSPO Indonesia director Desi Kusumadewi said 21 national and foreign palm oil companies in Indonesia, with a combined capacity of 3.8 million tons, had been RSPO-certified, but that represented only about 17 percent of the country’s total capacity of 25 million tons.

The achievement is much poorer globally because only about 7.7 million tons, or 14 percent of global production, have been RSPO certified, and of that total only about 58 percent has been taken up by the market.

Several company executives here are concerned that if the producers of certified palm oil do not see a significant growth in market demand and gain a significant premium price, they would not increase supplies.

If the RSPO brand is not strong enough or if it fails to convey the necessary assurances to the market, it would then be like a cleaner that fails to clean, said Yohannes Samosir, the research chief at PT Bakrie Sumatra Plantations. Palm oil is one of the world’s most traded and versatile agricultural commodities, used worldwide as edible vegetable oil, industrial lubricant, raw material in cosmetic and skin care products and feedstock for biofuel production.

But growing global demand for palm oil and the ensuing cropland expansion has been blamed for a wide range of environmental ills, including tropical deforestation, peatland degradation, biodiversity loss and CO2 emissions.

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