Govt pushing for 100% sustainably-produced palm oil by 2020, says minister

Primary Industries Minister Teresa Kok, flanked by MPOB chairman Mohd Bakke Salleh, and MPOB deputy director-general Ahmad Parveez Ghulam Kadir on her left at the press conference in Bangi today.

BANGI: Primary Industries Minister Teresa Kok is optimistic Malaysia will be able to achieve 100% sustainable palm oil production by January 2020 despite only 36% of oil palm growers attaining the Malaysian Sustainable Palm Oil (MSPO) certification as of May 31.

“We will still push for it; we have another five months. We are working very hard on the ground.

“This is part of our increased efforts to prove to the world that all the palm oil that we export from Jan 1 are certified sustainable,” she told reporters on the sidelines of the 25th annual technology transfer seminar, organised by the Malaysian Palm Oil Board (MPOB).

The seminar and exhibition seek to promote new technology for downstream and upstream production in the palm oil industry.

“If in the end, we don’t get 100% certification, maybe we’ll get 95%. If not 95%, maybe we’ll get 90% MSPO certification,” she said.

In the Amsterdam Declaration, European Union member states, namely Denmark, France, Germany, Italy, the Netherlands, Norway and the United Kingdom, say they want only fully-sustainable palm oil from 2020.

In 2017, the previous government had set a target to achieve 100% certification following the declaration.

Kok had previously said that the government had promised the international community and buyers that Malaysia will achieve 100% MSPO certification by the end of this year but as of May 31 this year, only 36% of the total 5.85 billion hectares planted with oil palm was declared sustainable.

She said difficulty in locating mid-sized oil palm plantation owners was partly why the government had failed to achieve a higher percentage of MSPO certification.

Elaborating further today, she said the incorrect status of the land used was also a problem for some of the smallholders, especially in East Malaysia.

“Some of them have planted on land that was supposed to be planted with rubber and cocoa.”

She called on state governments to speed up the applications of land title changes by smallholders, adding that she had already presented a paper at a meeting of menteris besar last week.

“I have requested all menteris besar and chief ministers to speed up the approval of applications for changing land status by the smallholders.”

The director of MPOB’s economics and industry development division, Balu Nambiappan.

Meanwhile, Ahmad Parveez Ghulam Kadir, deputy director-general (research and development) at MPOB, and Balu Nambiappan, the director of MPOB’s economics and industry development division, spoke about the lower price of palm oil in the market.

Parveez said the price of palm oil had not increased despite a drop in palm oil stocks last month.

Malaysian stockpiles at the end of May fell 10.3% to 2.45 million tonnes from the previous month, data from MPOB shows.

It was the third straight month that the inventory had declined and it took palm oil stocks to their lowest levels since July 2018.

Parveez attributed the price stagnation partly to Indonesia’s high production of the commodity.

“Many of their new plantings in the past few years are now bearing fruit. Even though they reported producing around 40 million tonnes last year, we think it’s more than that.”

He added that the lower price of soya bean oil was also indirectly affecting the price of palm oil.

“We are doing our best. We hope we can get the price to increase, but the most important thing is to maintain the price so it doesn’t drop any further,” he said.

Balu said Malaysia was trying to work with Indonesia to stabilise prices under the Council of Palm Oil Producing Countries (CPOPC).

He warned that any further price decline would be damaging to both Malaysia and Indonesia.

He said Indonesia produced 44 million tonnes of palm oil compared with Malaysia’s 20 million tonnes.

“We have just finished a mini-peak production period and we are now going on to the second half. By right, after two consecutive years’ of higher production, production should be going down but it’s not happening.

“So I would say the price is slightly lower than what we expected. We expected the price to improve, but it is still holding.”

However, he said, as long as the price stayed above RM2,000 per tonne it would still be good.

Malaysian palm oil is currently priced at US$552.19 (RM2,290) per tonne, down from US$563.20 (RM2,330) last month and down from US$656.50 (RM2,720) one year ago.