Asian palm oil rms race to replant Palm Oil Industry Contributes US$5.29 Billion in Forex
10 Malaysia wants palm oil hubs in Egypt, Saudi Arabia: deputy PM
11 Biz group asks PBBM to review tax-free importation of palm oil
12 Colombia's palm oil producers eye SAF market
13 Latin America emerging as hot spot for more climate-friendly jet fuel
15 Despite reported positive trend, palm oil industry still struggling
17 Experts seek increased investment to halt Oil palm importation
18 The unbridled importation of palm oil
19 20 22 24 27 29 30
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Jakarta (ANTARA)-Chairperson of the Indonesian Palm Oil Association (Gapki) Eddy Martono has revealed that the domestic palm oil industry contributed US$5.29 billion in foreign exchange in the period from January to February this year.
"Palm oil exports in Indonesia's trade balance have a positive contribution, as of February this year, it was still US$5.29 billion. This causes our trade balance to be positive, ” he said at a media gathering held in Jakarta on Friday.
The value of exports increased from US$2.60 billion in January to US$2.68 billion in February, he added.
This increase was mainly due to an increase in the exports of re ned palm oil from 2.121 million tons in January to 2.254 million tons in February (the price of re ned products was higher than the price of CPO raw materials), Martono said.
According to Gapki, domestic consumption gradually increased to 20.9 million tons in 2022 from 18.4
million tons in 2021. Consumption in 2020 and 2019 was recorded at 17.35 million tons and16.7 million tons respectively.
"If we look at production in the last four years, the trend has been stagnant, while from the consumption graph, it has actually increased, " he explained.
He said he believes that an increase in consumption will occur in 2023 because of the mandatory B35 program, which is expected to boost consumption by up to 3 million tons.
To achieve this target, he asked the government to carry out the people's oil palm rejuvenation (PSR) program without delay.
Gapki also recorded a downward trend in export volume of 2.91 million tons in February 2023, while in January, it was recorded at 2.94 million tons.
“This causes our trade balance to be positive”
Jakarta (ANTARA) - The Indonesian Government is supporting the development of technology and human resources at palm processing factories.
For as long as one hundred years, the palm processing technology has remained unchanged, and it has mainly focused on fat production, Director General of Agro Industry at the Industry Ministry Putu Juli Ardika highlighted in a written statement received here on Wednesday.
"Now, the condition has changed. (Palm processing) is no longer only for food, but also for fuel in the future,whether it is for green biodiesel, green jet fuel, green gasoline, which can be adopted right away to replace fossil - based fuel," he informed.
The future generation will live in a world that is greatly powered by fuel generated from palm, such as biofuel, biopolymer, and biomass; therefore, the Industry Ministry is showing great support for the development of palm processing technology, he said.
One such support has involved the amendment of Government Regulation Number 1 on export foreign exchange, he pointed out.
The regulation states that foreign exchange must be available in Indonesia within a certain period of time so that it can be used for technological development and commercialization.
Ardika also outlined other supports, including the establishment of the National Standards (SNI) for crude palm oil and palm cooking oil.
To develop any industry, competent human resources are necessary, he added. To ensure this, the ministry has issued the National Competency Standard of Work for industries such as crude palm oil (CPO), palm cooking oil, oleochemical, and biodiesel. The standard covers expertise ranging from operational to management aspects.
Educational institutions under the ministry have been accredited for issuing certi cation for the professional work standard.
The ministry has requested the National Palm Oil Plantation Fund Management Agency (BPDPKS) to allocate scholarship funding for students attending the ministry's educational institutions to meet the demand for one thousand workers each year in the palm processing industry.
A member of research and development at BPDPKS, Jenny Elisabeth, highlighted the need for palm processing companies to produce crude palm oil that meets the quality standards in order to ensure the competitiveness of the industry.
She delivered the statement during the “Technology & Talent Palm Oil Conference and Exhibition” hosted by the National Association of Plantation Professionals and Practitioners on Tuesday (March 7, 2023).
“Ever-growing market demand for the quality of processed items must be met by palm processing companies by producing high-quality CPO. From the plantation, palm processing, and CPO transport, all (good quality) must be maintained," she said.
“(Palm processing) is no longer only for food, but also for fuel in the future...”
Jakarta (ANTARA) - Indonesia and Malaysia have donated 100 thousand germinated oil palm seedlings to help hundreds of Honduran farmers a ected by the 2020 hurricanes, Coordinating Minister for Economic A airs Airlangga Hartarto has said.
"This initiative shows our commitment to collaboration and solidarity among palm oil- producing countries," he said in a statement released on Monday.
The governments of Indonesia and Malaysia have sent 20 thousand seedlings through the Council of Palm Oil Producing Countries (CPOPC), an intergovernmental organization for palm oil-producing countries.
In addition, Indonesian and Malaysian palm oil business players have donated 62 thousand and 20 thousand seedlings, respectively.
Hartarto said that oil palm has the potential to become an important solution to the threat of a food crisis.
He lauded the stakeholders who helped in preparing the seedlings and ensuring the smooth delivery of the assistance.
Furthermore, he welcomed Honduras as the new member of the CPOPC.
Honduras will be o cially inducted into the organiztion in May 2023. Currently, the country is still an observer country of the CPOPC.
Hartarto emphasized the importance of strengthening cooperation among palm oil-producing countries.
He said he expects the CPOPC to strengthen its contribution to the development of cooperation in the palm oil sector in the future.
"This germinated seedling assistance is a rst step toward better cooperation between palm oil-producing countries," he added.
Meanwhile, the secretary general of CPOPC, Rizal A andi Lukman, said that the assistance will be distributed to 337 farmers in Honduras, according to the Communication and Information Ministry's InfoPublik website.
He said the seedlings will be planted on 510 hectares of the 4,988 hectares of oil palm plantations damaged by the Eta and Iota hurricanes on November 20, 2020.
Currently, Indonesia and Malaysia are the only member countries of the CPOPC.
In addition to Honduras, Colombia, Ghana, and Papua New Guinea are observer countries of the organization.
KUALA LUMPUR -- Malaysia plans to expand palm oil exports into Middle East and African markets by creating new export hubs in Egypt and Saudi Arabia, Malaysian Deputy Prime Minister Fadillah Yusof said in an interview with Nikkei Asia.
Fadillah, who is also Minister of Commodities and Plantation Industries, said his ministry and the Malaysian Palm Oil Council (MPOC) are trying to push further into emerging markets, which have recently seen their re-exports of the oil rise. Malaysia is the world's second-largest exporter of palm oil after Indonesia. Its top importers include India, China and the Philippines.
"There are a few strategies that we are looking at. Firstly, exploring new markets and at the same time strengthening relations with all the countries that are close to us as far as markets are concerned," the deputy prime minister told Nikkei.
Fadillah spoke with the Egyptian ambassador to Malaysia, who said that Egypt is "keen" on being the regional hub for palm oil distribution. "They want to import more from us and they want Egypt to be the hub so they can spread it out to Africa."
"The same goes for the markets in the Middle East. Saudi Arabia, for example, is also interested [in being a hub] like Qatar."
Malaysia's palm oil exports to the Middle East increased 32% last year and those to North Africa 51%.
Michalis Rokas, the EU ambassador to Malaysia, met Fadillah last week and reassured him that the regulation will not a ect Malaysia's palm oil exports from existing agricultural land or burden small growers holding Malaysia Sustainable Palm Oil certi cation with extra costs.
According to a recent Financial Times' report, Britain would eliminate import tari s on palm oil from Malaysia once the European nation and the Comprehensive and Progressive Agreement for Trans-Paci c Partnership reach an agreement on Britain's entry to the bloc.
Fadillah told Nikkei that the government is committed to ensuring sustainable palm oil plantations while adhering to international standards aimed at protecting the environment. "We want our forest coverage to be not less than 50% in Malaysia," he said. "Forest coverage stands at about 54% in Malaysia. For palm oil, [land allocated to plantations] is 6.5 million acres," with only about 5.8 million acres currently being used.
Malaysia and Indonesia last year announced that the two countries will send a delegation to Brussels to discuss the impact of the EU regulation. Fadillah said that both will focus on explaining their position to the EU on sustainability mechanisms and programs for limiting deforestation.
He added that the two countries need the EU to understand that small farmers comprise sizable indigenous groups who rotate crops and let some land remain fallow. Fadillah hopes the EU will consider exempting small palm oil farmers from the regulation.
Fadillah thinks China is also interested in increasing imports. "Palm oil is a stable commodity that will contribute immensely to Malaysia's GDP, although the world is facing several crises and disruption to the global supply chain," Fadillah said.
The deputy prime minister's comment on market diversi cation comes as exports to Europe trend down. Malaysia exported 181,379 tonnes of palm oil to the European Union, or 8% of its total, in the January-February period this year -- a decline of 22% from a year earlier, according to the MPOC. The largest dip was in Italy, which decreased its imports 59%, followed by Sweden at 37%.
Malaysia recently accused the EU of hurting small growers with the implementation of the bloc's Deforestation Regulation. The new law is expected to be in force by the end of the year.
In the meantime, Fadillah said that Malaysia plans to strengthen its market position by focusing on exports of downstream and high-value-added products including oleochemicals, specialty fats and health supplements.
Fadillah is a senior leader of Gabungan Parti Sarawak (GPS) , a political party based in Borneo and one that represents the growing in uence of the region in the federal government. After the general election last November, the Pakatan Harapan coalition led by Prime Minister Anwar Ibrahim formed a ruling bloc that includes the GPS and other Borneo-based parties.
"For now, I would say as far as the unity government is concernd, I am con dent that [it] will continue to be stable and strong," Fadilah said.
"Everyone has given their commitment to making sure that this government will stay for the sake of stability and focus on putting Malaysia back on track."
Malaysian Deputy Prime Minister Fadillah Yusof: "Palm oil is a stable commodity which will contribute immensely to Malaysia's GDP." (Photo by Norman Goh) NORMAN GOH, Nikkei sta writerMarch 30, 2023 15:12 JSTMANILA – The Federation of Philippine Industries (FPI) has urged President Ferdinand R. Marcos Jr., who is also the Department of Agriculture (DA) Secretary, to revisit the agency’s policy on tax- and duty - free importation of palm olein to be used as ingredient for animal feeds.
FPI chair Jesus Arranza told reporters Tuesday that some of the imported palm olein that are tax- and duty-free were allegedly used for other purposes other than compounding of animal feeds.
“The DA should also revisit this policy of allowing zero VAT (value-added tax) and duty - free importations of palm olein as this is clearly hurting the local coconut and palm oil farmers and producers,” he said.
Arranza said the DA should have e ective monitoring on where these palm olein imports were actually utilized.
“We need a reportorial requirement and checking to see if the volume that they import were actually used for animal feeds," he added.
Arranza said that even with the past incidents of African swine fever, imports of palm olein for compounding of animal feeds still increased.
He said the Bureau of Animal Industry, which issues the certi cation for tax- and duty-free palm olein for animal feeds, should also be responsible for monitoring where these imported products were utilized.
Arranza said that since FPI brought up this issue, imports of palm olein have slowed down which caused local prices to increase and even higher than the price of coconut oil.
"There is no closure yet on this issue. We opened it and we have to close it fairly, expeditiously, and ferret out all illicit acts attendant to this issue otherwise, there'll be room for other interpretations, and I thank the President for giving importance to my plea," he added. (PNA)
Federation of Philippine Industries chairman Jesus Lim ArranzaThe country — Latin America's largest palm oil producer — is set to produce around 1.8 mn t/yr of palm oil in 2023, but it could boost production to around 2.5 mn t/yr by 2028 if the SAF market proves to be economically pro table for palm oil producers, Nicolas Perez Marulanda told Argus on the sidelines of IV International Conference on Biofuels in Cali, Colombia.
"What is exported today, which is 2pc of the total production, that bulk could be available for the new SAF market," Marulanda said. "But SAF needs to prove that it is more attractive [for palm oil] than exports. From what we have been hearing, the prices for the raw material for SAF are very interesting."
The ISCC, a global sustainability certi cation system, is developing a study nanced by the World Bank to demonstrate Colombia's palm oil production is done sustainably, without deforestation.
The study, set to conclude in October, could pave the way for approval of palm oil's use for SAF under the International Civil Aviation Organization (ICAO).
Colombia's palm oil is produced in a sustainable manner generating more than 200,000 formal jobs. It does not rely on a migrant labor force, employ children or contribute to deforestation, he added.
Colombia has 600,000 hectares dedicated to palm oil but planting higher yielding crops, improving fertilization and implementing better agricultural practices could increase production in the same footprint. Colombia could boost productivity from 3.5t/per hectare today to 5t/hectares in ve years.
Colombia's state-controlled oil company Ecopetrol and biodiesel re ner Bio D have said they would likely use palm husks — a residual of palm oil production — to produce SAF.
In Colombia, about 400,000t /yr of palm oil output already goes to produce biodiesel, which has a mandated 10pc blend into conventional diesel.
Some 430,000t /yr of palm oil is exported and the balance covers domestic consumption.
By Diana DelgadoClarifies Bio D's potential use of palm husks for SAF.
Colombia, the world's fourth-largest palm oil producer, could increase output of the agricultural product by almost 40pc by 2028 to feed a growing sustainable aviation fuel (SAF) market, the head of the Colombian federation of palm oil growers (Fedepalma) said.
TONTREAL/BOGOTA Dec 16 (Reuters) - Latin America is drawing early investment for jet fuel produced from materials like forest residues and palm oil as emissionconscious airlines scour emerging markets for less-polluting fuel to power ights, industry executives say.
While most sustainable aviation fuel, or SAF, is produced in the United States, Europe, and Singapore, Latin America is emerging as a budding market. That demand is driving early investments and reviving debate over palm oil,which has faced boycotts in southeast Asia over labor concerns and environmental grievances.
The push comes as industry faces fresh pressure to curb pollution, with the United Nation's aviation agency targeting net zero emissions by 2050 and negotiators scrambling to reach an agreement on Monday at a Montreal summit to protect nature.
While SAF is not currently produced in Latin America, Honeywell's (HON.O) Performance Materials and Technologies (PMT) unit is talking to companies about 12 proposed SAF projects in the region valued in the billions of dollars, up from three projects in 2018, an executive told Reuters.
"We have two that we are going to announce ... in 2023," said Jose Fernandes, the region's president for Honeywell PMT, which supports companies in converting vegetable oil and fats into SAF. "Latin America right now is really a hot spot for Honeywell."
The U.S. company is working with Brazilian biodiesel producer ECB Group on an $800 million to $1 billion plant in Paraguay featuring SAF expected to be operational in 2025.
Production of SAF, which can reduce emissions by up to 80% from conventional fuel, is used in an up to 50-50 blend with kerosene and remains scarce. It should hit 300 million liters in 2022 according to airline trade group IATA, but that is less than 1% of total fuel consumed by carriers.
In the near term, the industry sees SAF hitting 10% of the total by 2030, and the 2050 net zero emissions target relies on SAF accounting for 65%, which would require 450 billion litres annually.
That has spurred a race to boost SAF production for aviation, which accounts for 2% to 3% of global emissions. With supply now limited mainly to U.S. and European hubs, some travelers are making bulk purchases, while airlines seek new SAF sources in the developing world where tra c is growing more quickly than mature markets.
"In order to be successful, SAF needs to be available across the globe," Juan Carlos Salazar, secretary general of the International Civil Aviation Organization (ICAO) said.
Under ICAO's CORSIA deal, most airlines will also limit their rising emissions from international ights, either by purchasing o sets or using SAF, driving demand for the fuel.
Chile's LATAM Airlines (LTM.SN), for one, says it favors fuel from South America to meet a pledge of using 5% of SAF in its operations by 2030.
Producing and distributing SAF in regions with fastergrowing tra c like Latin America is key to meeting industry targets, said Landon Loomis, Latin America president for U.S. planemaker Boeing (BA.N).
Brazil, the world's second-largest producer of biofuels,has more than enough feedstock such as sugar cane, palm oil and urban waste to cover its jet fuel needs annually, Loomis said.
Brazil also has the technology to produce SAF, which is harder to make than biofuels for cars, an o cial at the country's aviation regulator said. However, it lacks investment and government policy, which is still under review.
"Even if we are not moving as a government, there is movement and interest of the private sector, that is already creating demand,” said Marcela Braga Anselmi, a department chief at Brazil's National Civil Aviation Agency (ANAC).
The Export - Import Bank of the United States is interested in "underwriting and closing bankable projects that source renewable feedstocks" for SAF and renewable diesel, particularly in regions like Africa and Latin America, a spokesperson said.
Projects are springing up. Brazilian state - run oil company Petrobras (PETR4.SA) plans to produce renewable diesel and SAF, starting in 2028, while Brazilian ethanol producer Raizen (RAIZ4.SA) will produce SAF for planemaker Embraer (EMBR3.SA). And Vibra Energia (VBBR3.SA) is working with Brasil BioFuels (BBF) to produce palm oil-based jet fuel in 2025.
Some companies in neighboring Colombia, the largest palm producer in the Americas according to local industry group Fedepalma, are also looking at making jet fuel from the crop.
But cases of child labor and deforestation in palm oil market countries in southeast Asia have made it hard to win global support for the fuel, said Fedepalma President Nicolas Perez.
Faced with that perception, Colombian biofuels producer BioD is choosing to produce SAF with waste instead of palm oil, which it uses for domestic consumption, said spokesperson Carolina Betancourt. It is looking to raise $700 million to $1 billion in investment to open a SAF re nery by 2027.
Separately, Colombian palm oil producer Daabon is in talks for an estimated $1 billion project to make 500,000 tonnes of SAF a year from palm oil, using green hydrogen. The fuel would need to be eligible for airline use under ICAO's CORSIA deal, said project consultant Pedro Ruano.
Colombia, supported by the World Bank, is also undertaking a study to show its palm oil is not linked to deforestation and a suitable option for SAF, said Fedepalma's Perez.
"We believe that SAF production in Colombia ... would mean an opportunity to contribute to the energy transition and cleaner aviation, which has also generated a new pole of development for Colombia."
with less than a year to the 2024 target for Nigeria to attain selfsu ciency in palm oil, it is becoming unrealistic for a country, which once occupied the vantage position as the leading exporter of the produce to return to that enviable position it relinquished, going by the current production capacity.
Even stakeholders in the industry have expressed reservations that the projection is a mere political statement, academic and unrealistic, considering factors surrounding oil palm development in the country.
The Governor of the Central Bank of Nigeria (CBN), Godwin Eme ele, who made the policy statement in 2019, at a stakeholders’ meeting on the Palm Oil Value Chain, in Abuja, pointed towards the possibility of making the country self-su cient in palm oil between 2022 and 2024 and ultimately overtake Thailand and Columbia to become the third largest producer.
He promised support for improved production of palm oil to meet not only the needs of the domestic market, but to also increase exports to improve Forex earnings.
Currently, Nigeria occupies the fth position in the league of palm oil producing countries, with 1.5 per cent or 1.03 million metric tonnes of the world’s total output, according to the United States Department of Agriculture (USDA).
Nigeria was overthrown as the world’s largest palm oil producer by Malaysia and Indonesia in 1966. From its vantage position as the leading exporter of the produce, the country is now a net importer, depending largely on other countries to meet the huge sup ly gap over the years.
Currently, Nigeria is the largest consumer of the produce in the continent, consuming approximately 2.5 million metric tonnes yearly, while domestic production stands at less than 1.3 million metric tonnes,leaving a de cit of over 1.2 million metric tonnes, according to the President of the National Palm Oil Produce Association of Nigeria (NPPAN), Alphonsus Inyang.
“Some statistics will say we are consuming over three million metric tonnes, but all we know is that oil palm import is hovering between $500 to $600m yearly,” Inyang told The Guardian.
If the current signal concerning the domestic production capacity is anything to go by, there are indications that the narration seems to be changing as the country’s palm oil production is on the rise owing to the backward integration policy.
Investigations revealed that most top palm producers, who started by re ning, are now investing and developing large plantations, taking advantage of backward integration policy.
According to the former executive secretary, Plantation Owners Forum of Nigeria (POFON), Fatai Afolabi, existing players in the industry have also doubled their plantations and increase production by100 per cent when compared with their status ve years ago.
What gives hope to fresh expectations was a report that the country’s crude palm oil imports from Malaysia–the second top grower of the crop have declined by 34.7 per cent, as local production rises on increased investments.
According to data from the Malaysian Palm oil Council (MPOC), Nigeria’s crude palm oil (CPO) import from Malaysia declined from 262,065 metric tonnes in the rst nine months in 2021 to 171,011 metric tonnes in the same period in 2022.
The immediate past National President of NPPAN, Henry Olatujoye, who con rmed the positive trend to The Guardian, said the current state of the industry is positive.
He attributed the development to the advent of Federal Government’s policy geared at reversing the country’s economy from heavy reliance on oil export to non-oil.
“Nigeria has seen the need to grow more plantations. Currently, the rate at which forests are being converted to oil palm plantations has grown astronomically and I can say authoritatively we have added up to another 100,000 hectares to the forest conversion to plantation, most especially in Edo and Ondo states.
“Ondo has given out close to 75,000 hectares of deforested area for plantation development in its Red Gold policy. Edo State has equally done the same, about 50,000 hectares of land has been released for plantation development. So, by and large, the rate at which plantation is being developed in Nigeria is high and that will increase the oil palm production. So, if we get our data correctly, we will be moving to two million tonnes of oil palm production in Nigeria soon.”
Aside Edo and Ondo States, palm oil is found predominantly in southern Nigeria, especially Rivers, Cross River, Akwa Ibom , Imo, Anambra, Ebonyi, Abia, Enugu, Ebonyi, Delta and Savanna Belt states, among others.
It also exists in the wet parts of North Central Nigeria, in areas like Southern Kaduna, Kogi, Kwara, Benue, Niger, Plateau, Taraba and Nasarawa, as well as the Federal Capital Territory.
But while much has not been heard from the northern states, their southern counterparts, especially the Southeast governors and stakeholders have stepped up their games, to make the produce their source of revenue and a dominant player in foreign exchange earnings.
For instance, in Ebonyi State, the farmers, millers and processors from the 13 palm oil producing local councils have intensi ed e orts at boosting palm processing activities ranging from nursery, plantation, oil milling, marketing and other related palm value chains.
Reports have it that other states in the region are also toeing that line, especially now that majority of the states are looking away from total reliance on allocation from the Federal Government.
But despite this positive trend in the sector, the price of the commodity has risen astronomically, to the extent that several households are currently nding it di cult to a ord it.
Based on The Guardian market survey in Lagos, Ogun, Oyo and Osun states, the price of a litre of palm oil is currently higher than a litre of Premium Motor Spirit (PMS). While a litre of PMS is between N184 and N350, a litre of plam oil hovers around N1, 160 and N1, 200.
At the popular Ile-Epo Market, Oke-Odo, Agege, Lagos, a bottle of 75cl is now between N1, 000 and N1, 200 as against N400 and N500 in 2018. Also, a ve-litre gallon currently sells for between N5, 800 and N6, 600 against its previous price of N2, 500 and N3, 000. It was the same price tag at Mile 12, Agege, Ojuwoye and Oja Oba markets.
In Ogun State, from Ifo, Arigbajo, Itori, Wasinmi, Lafenwa to Kuto markets, a bottle is currently pegged at N1, 000, while a gallon is between N5, 800 and N6, 000, same as in markets in Oyo and Osun states.
The Lead, IDH NISCOPS Oil Palm Programme Nigeria, Dr. Chris Okafor, who said the balance between the demand and supply is responsible for the price hike, noted that the huge gap between supply and demand is a big issue, adding that as long as demand outweighs supply, there will be need for it to still re ect on price.
On his part, Olatujoye also attributed the development to supply de cit, aggravated by population explosion, as well as increase in industrial utilisation. “Palm oil has always been higher in price when compared to petroleum products; this is because of population, which leads to increase in industrial utilisation and consumption.
“Looking at the Ukraine-Russian war and the COVID-19 pandemic era, which distorted the supply chain of so many commodities and dropped the value of naira to dollar, it is clear why we have price increase. What we are enjoying today is home advantage, which is not sustainable.
“If production increases, de nitely price will go down. As at now, it is not like that, there is disparity between population and consumption. Right now, production is low, consumption is high. De nitely supply will be low and that will increase the price of the product.”
To Inyang, the cost of the essential commodity is high because palm oil is highly needed in the country for domestic consumption and industrial use.
“There’s no Unilever without palm oil, there can never be noodles without palm oil – there are over 10 brands of noodles in the country today, palm oil forms more than 45 per cent of raw materials that is needed for the noodles industry.
“Everybody needs palm oil including the President, but when it comes to making policy about the produce, it sounds to them like one village commodity, but they consume it every day. No chocolate can be on the shelf without palm oil, even the make ups, all these companies are being supplied from Indonesia, Malaysia and Columbia, the gap is there, about 50 per cent is being imported into the country.”
To forcefully bridge the de cit gap, The Guardian research showed that some palm oil dealers have resorted to adulteration. The adulterated oil is reportedly cheaper. It was learnt that the culprits have taken to diluting original palm oil with substances to maximise pro t, at the expense of health of unsuspecting buyers.
As gathered, when the colourant is mixed with water and added to original palm oil, it increases its redness, creating the impression that it is better in quality than other oil in the market. It was further learnt that the demand for the ‘killer oil’ is increasing due to its rich colour and attractiveness, as buyers prefer it to the original oil.
The former NPPAN president said at least 60 per cent of the palm oil in markets across the country is adulterated.
“The adulteration of palm oil is still persistent all over Nigeria. They have even gone beyond mixing magenta – a deep red- like dye, with the palm oil to improve its coloration. People have now improved by mixing chemicals and pouring it into the palm oil to look more oily.
“There are some levels of adulteration whereby people mix sludge–an industrial oil use in making soap. It’s not made for consumption but people still mix it and blend it with palm oil to increase their volume. So, if you don’t know, you’ll just buy it and start to eat. So, the level of its adoption and usage currently is very high.”
In 2017, the Nigeria Security and Civil Defence Corps (NCDSC) arrested some palm oil suppliers in Potiskum and Jos, Yobe and Plateau states, respectively, for allegedly adulterating palm oil with dye. Their arrests led to more revelations and the con scation of samples, which after lab tests conducted by the National Agency for Food Drug Administration and Control (NAFDAC), showed traces of high acid, high saponi cation and high relative density.
Then,the state’s coordinator of NAFDAC,Lawal Musa Dadingelma, con rmed that the adulterated palm oil samples tested contained dye , which is capable of causing cancer when deposited in human body.
Continuing, Olatujoye said: “You know in every business environment, there is always the dark side of it. The only thing we can do is to create more awareness among consumers and do more training for people to understand that when looking for high-grade palm oil, these are the parameters.
“Firstly, one of the parameters is to look at the bottle, if it’s a pet bottle, once you shake it very well and allow it to settle, if it’s a good palm oil, it will have a free ow down without stains of residue on the body, but if it’s fake, you’ll see some patches on the bottle, showing that it’s actually a bad palm oil. So, we need to increase awareness, training and retraining of people and then get more information across to consumers for them to understand how to discover fake and good palm oil.”
They experts spoke against the backdrop of report published last week that Nigeria imported N299.6 billion of palm oil from 2017 to 2022.
The publication which relied on quarterly reports by the National Bureau of Statistics indicates that ‘Palm Crude Oil’ is often among the top ve imported agricultural products into the country.
Prof. Adetunji Iyiola, a fellow at the National Agriculture and Extension Research Liaison Service, described the importation of oil palm by an agrarian country like Nigeria, as an anomaly.
Iyiola said experts need to develop new strategies to boost local oil palm production in the country.
“The strategy to boost the oil palm sector is to go back to the basics.
“What we need is to make a new habit of investing in oil palm production in Nigeria. It is a very lucrative business.
“We should also invest more in the local processing of oil palm.
“Within the space of four to ve years, an investment in oil palm would have begun yielding returns; therefore, we need to go back to the basics.
“We have money bags that should invest in the sector, we should see cultivating oil palm as a long-term investment and should include the entire value chain from production, to processing and export.
“We should not import palm oil as a nation, we have a very fertile land for oil palm production from Benin to Osun to Ondo we have good palm that can grow well,” Iyiola told NAN.’’
According to him, oil palm can be grown and sustained in all the South-South states of the country.
He called on the government to invest in agriculture extension especially in oil palm cultivation.
“The farmers need to be equipped with information on oil cultivation to boost local production.
They said this in separate interviews with the News Agency of Nigeria on Tuesday in Lagos.
“Government should also aid the local processing of oil palm, the entire value chain should be boosted for the funds we waste in palm oil importation to be invested back into the economy,’’ he said.
On his part, Mr Akin Alabi, co-founder Corporate Farmers International, said extra e ort must be done in the production, processing and marketing of the produce.
Alabi said that the country needs to tackle the issues around production and processing of the commodity to grow the sector.
“In terms of production, we do not have premium seeds. Our research institutes need to work hard in the development of premium seeds around the entire oil palm value chain.
“The seeds we have currently are not the standard seeds we require to boost the sector’s production locally compared to other countries such as Malaysia and other Asian countries.
“Also, we have another problem in terms of production; we do not have enough oil palm producers.
“We have clusters of oil palm producers in the South-East, South-South and South-West.
“We need oil palm producers in large scale to produce palm oil because our land is fertile enough for the produce,” he said.
He noted that Nigeria was yet to tap into the entire value chain of oil palm production.
“Another issue is the local processing of oil palm. As a country, we have not properly tapped into the entire value chain of oil palm production.
“We still rely on local production methods for our domestic consumption.
“We must go beyond oil palm production for consumption to industrial use.
“When we can get this right then we will be able to expand wealth creation across the oil palm value chain,” Alabi said.
Agriculture experts have called for more investment in oil palm production to enhance the growth and development of the sector.
The recent report that Nigeria imported palm oil worth N300 billion in six years is appalling and unacceptable. It is even scandalous and unthinkable that Nigeria, which used to be the highest exporter of palm oil in the 1960s, is now heavily dependent on imported palm oil.
According to a new report, Nigeria’s palm oil imports in the past six years stood as follows: 2017, N21.2billion; 2018, N32.2 billion; 2019, N19billion; 2020, N22billion; 2021, N134.7 billiion; and 2022, N70.2 billion. This translates to N299.6billion.
A barrel of palm oil sells for $600 at the international market. Nigeria gets most of its supply of palm oil from Malaysia, India, China and Cameroon. According to the National Bureau of Statistics (NBS), palm oil ranks among the top ve agricultural products imported into the country in spite of the fact that it was one of the items excluded from forex list in June 2015.
In 2017, Nigeria imported 302,000 metric tons of palm oil, according to the Governor of the Central Bank of Nigeria (CBN) , Mr. Godwin Eme ele. It is paradoxical that Malaysia which collected its oil palm seedlings from Nigeria in the 1960s is now exporting the product to Nigeria. It is a sad commentary on the utter neglect of agriculture in the country by successive administrations. The discovery of crude oil and the oil boom era of the 1970s should be blamed for our abandonment of agriculture in pursuant of oil money and white collar jobs.
Unfortunately, the story has drastically changed to the extent that we now import palm oil and some other agricultural products we used to be world highest exporters.
As a developing nation, we must retrace our steps and change the ugly narrative. We must go back to the land and prioritise agriculture and move towards agro- business. Palm tree from which palm oil is extracted for both industrial and domestic use is a native of West Africa. But it grows more liberally in Nigeria than any other country in the region. It is highly prominent in the South East, South South and parts of South West and North Central.
States within the palm oil belt should invest so much on the cash crop as a way of boosting their internally generated revenues. They can, once again, make Nigeria the highest exporter of palm oil in the world. Nigeria can earn more money
from palm oil, cassava, groundnuts, cocoa and other agricultural products than crude oil.
Before the discovery of crude oil in commercial quantities, agriculture was the mainstay of Nigeria’s economy. During the First Republic, agriculture was the major foreign exchange earner for the country and the highest employer of labour at over 70 per cent.
The Northern Region was known for its groundnut pyramid among other crops of economic importance. The Eastern Region depended so much on its palm oil produce, cassava and cashew nuts, while the Western Region leveraged so much on cocoa. Following the creation of the Mid-West Region in 1963, it depended on rubber plantation. Nigeria was among the highest world producers of groundnuts, palm produce, cocoa and rubber.
Nigeria, without oil crusade, should aim at developing our agricultural resources which are sustainable. It is not late for so many Nigerian states to develop their agriculture and earn foreign exchange in return. This is perhaps the signi cance of the advice of former President, Chief Olusegun Obasanjo, to Governor Charles Chukwuma Soludo to invest in agro - business during the marking of his one year in o ce. The former president urged Soludo to prioritise four key areas in agriculture such as cassava, palm oil, poultry and aquatic farming. Obasanjo’s advice is also applicable to many other states in the country. The country can as well pro t from the advice of the former leader by developing its agriculture, especially agro-business.
While urging states within the oil palm belt to develop the cash crop as a way of stopping the unnecessary importation of palm oil into the country, the Federal Government has a vital role to play towards the development of our agriculture as a business enterprise.
The rejection of our agricultural products in the international market on account of poor quality and packing can be addressed if the government can provide the needed enablers in that direction. For Nigeria’s agriculture to transform to agro- business, there is urgent need for intervention funds from the CBN to grow palm oil, cassava, ‘uha’ leaves, cashew nuts and others, which are in high demand in the global market.
Producers of palm oil at Ta Dekpor, a farming community in the Afadzato South District of the Volta region, are calling on the government, individuals, and organisations to help them produce on a large scale.
The women said some help in the supply of machines, ready market and working on the deplorable nature of the road would increase and sustain their business and production.
Madam Vivian Akpene Aborvor, a palm oil producer and seller, told the Ghana News Agency (GNA) that lack of machines to pound the palm fruits as well as assist in the oil production a ected large production of oil for the market.
She said the cost of palm fruits also a ected the production adding that the palm oil had to be transported to the market before they were purchased because the deplorable nature of the road prevented buyers from coming to the community.
Madam Aborvor said the cost in transporting the oil to the market was also high because only motorbikes and tricycles could ply the deplorable roads and they charged exorbitant fares.
She said they currently sold a bottle of palm oil for GH 17.00 in the market but GH 15.00 when buyers came to the community.
Madam Aborvor also noted that they had to sell their produce at either Logba or Kpando markets, adding that an available market ready to purchase their products in large quantities would help them.
Mr Prosper Bedu, a farmer, noted that the sale of palm fruits in the community hinged on its availability, which in turn determined the prices at which they were sold to their client.
He said a paint rubber of palm fruits currently cost GH 12.00 but could sometimes cost either GH 10.00 or as low as GH 5.00.
Checks by the GNA revealed that a Centre that was established to help the women in oil palm processing known as the “Comdeks Hatof Womens Oil Processing Centre” had become a white elephant.
Mr Agblewodea Lawson, Acting Headman of the Community, said the Centre was established in 2014 to help in oil palm processing by a non-governmental organisation led by one Samuel who hailed from Akatsi.
He said the said Samuel provided shelter, pots, and other materials to help in the processing with the hope of expanding future productions but unfortunately everything halted, and they also had not heard from him and the NGO.
Mr Agblewodea said they were currently in need of a palm fruit pounding machines, processors as well as other equipment to help the production of palm oil.
KUALA LUMPUR, April 14 (Reuters) - When palm oil prices soared to record highs last year, a Malaysian estate manager surnamed Lim postponed replanting his old, unproductive trees for a third consecutive year to lock in pro ts - a decision he regrets and is scrambling to x.
Across Indonesia and Malaysia, which produce 85% of the world's palm oil, growers are ramping up replanting after a decade of letting estates grow older, an ageing trend that threatens to tighten supply of the commodity that accounts for nearly 60% of global vegetable oil.
Oil palms start losing productivity after 20 years. Besides the cost of replanting, it takes three years for new trees to grow and yield a crop - making that land unproductive in the meantime.
"If I had replanted consistently over the past 10-15 years, my yields and worker productivity could have been better,” said Lim, now rushing to catch up on the backlog by replanting 5% of his 2,300-hectare estate in Perak state this year and up to 20% next year.
"The joy from the high prices was short- lived," said Lim, referring to prices that reached a record 7,268 ringgit ($1,647.33) a tonne last year. Lim wanted to be referred to only by his family name due to business con dentiality, With acreage planted to palm oil mostly static in Indonesia and Malaysia and some palm oil being used to meet biofuel targets, the need is intensifying for higher yields of the commodity used in cooking oil, instant noodles, soaps, cosmetics and other products.
Palm oil prices have fallen some 49% from last year's record, but the tight supply means they are expected to stay above pre-pandemic levels.
Malaysia's FGV Holdings (FGVH.KL), the world's biggest palm oil producer, told Reuters it will expand its pool of replanting contractors and aims to replant 19,549 hectares this year, up from 12,436 hectares in 2022 and just 2,023 hectares in 2021.
Another palm oil giant, Kuala Lumpur Kepong Bhd (KLKK.KL), told Reuters it plans to replant 10,000 hectares this year, up from a lower-than-usual 6,000 hectares in 2022.
In addition to the temptation of high harvest prices, growers were deterred from replanting in recent years by rising costs and a shortage of workers during the pandemic, especially in migrant labour- reliant Malaysia. E orts to address investor concerns on sustainability and labour rights, which saw many growers spend to upgrade housing, also distracted from replanting.
As a result, yields stagnated over the past four years, even as scant new acreage was planted under government caps to prevent deforestation.
Trucks are seen near a palm oil plantation at a village in Sepaku, East Kalimantan province, Indonesia, March 8 2023. REUTERS/Willy Kurniawan
Now, with prices falling and labour woes easing, estate managers like Lim are stepping up replanting to lower the aging pro le of their plantations.
“We are ramping up full speed. We will replant as much as the seedling supplier can supply,” said Lim.
"Palm oil has lost its growth momentum ... Insu cient replantings and management constraints are keeping yields below potential, ” Thomas Mielke, head of Hamburg - based research rm Oil World, told a conference last month.
Annual global output growth is likely to slow to 1.9 million tonnes or less in the current decade, from average annual growth of 2.9 million tonnes in the 10 years to 2020, Mielke said.
World output this year is expected to increase by 2.7% from a year ago to 80.9 million tonnes, Mielke said.
Around 2.32 million hectares or nearly 15% of Indonesia’s oil palms are more than 20 years old, compared to nearly 27% in Malaysia’s total planted area of 5.67 million hectares, according to government data provided to Reuters .
The oldest and least productive trees - those aged 25 or more - account for 4% of total planted acreage in Indonesia and twice that in Malaysia.
"There is an ugly ageing trend. We are ageing faster than we are replanting," Malaysia Palm Oil Association chief executive Joseph Tek told Reuters.
While new seed varieties grow faster into trees that produce more oil , are shorter and easier to harvest and may also have better resistance to drought and disease, replanting remains expensive, especially for smallholders and mid - sized estates.
In Malaysia, replanting costs doubled to around $4,500 per hectare after the pandemic in ated prices of fertiliser and labour.
Indonesia is adjusting regulations to make its replanting fund more accessible to farmers as the country aims to replant 180,000 hectares of smallholder farms this year, Rizal said.
However, the threat of El Nino-induced droughts, seed shortages, labour supply disruptions and rising costs for everything from contractors to pesticides may force some planters to wait another year.
In 2017, Indonesia launched a smallholder replanting fund to support the growers who account for over 40% of its palm acreage. Yields for smallholders are 25% lower than for company-run plantations due to aging trees and poor quality seedlings.
The scheme targeted replanting of 2.4 million hectares but only managed to replant around 278,000 hectares by February, partly due to land legality issues.
Indonesian agriculture ministry o cial Muhammad Rizal said that many farmers withdrew their replanting proposals last year to take advantage of high prices.
"When fresh fruit bunch prices rose, this became problematic," he told Reuters.
In neighbouring Malaysia, where oil palms tend to be older, the replanting rate in 2022 slowed to 100,000 hectares from 160,000 hectares replanted in 2020, according to the Malaysian Palm Oil Board.
"We should see a little bit more from the major plantation companies who are more disciplined on replanting, to try and correct the age pro le for the estate," said Ivy Ng, regional head of plantations research at CGS-CIMB Research.
"But it continues to be an expensive investment and requires workers," she said.
Unlike Sumatra and Kalimantan, which have seen excessive development, Papua still o er wide opportunities for new plantations, as long as they are undertaken sustainably that take lessons from past mistakes.
JAKARTA – As oil palm plantations can be a signi cant contributor to rural livelihoods in Indonesia, the government has been capitalizing on this commodity and strengthening Indonesia’s position as the global leader in palm oil production by expanding plantations. As land for new plantation investment has become scarce in Kalimantan and Sumatra, plantation developers are looking east to acquire land in Papua.
The growing interest in developing oil palm plantations in Papua presents potential opportunities, but also challenges.
Plantation development in Papua has opened up isolated areas, stimulated infrastructure development, generated employment and improved workers’ incomes. However, the indigenous communities’ reliance on forests for subsistence and their lack of familiarity with oil palm as a cash crop have proven to be a major barrier to their employment and e ective engagement in this industry.
Moreover, hesitation among companies to implement the nucleus estate and smallholder (NES) scheme has further limited the involvement of local communities, widening inequality and often causing tension over land acquisition processes and resentment over low compensation. The large number of migrant workers brought in to work at plantation estates is also a source of con ict with the local population.
Plantation expansion in Papua, which has been accelerated further and has often been excessive under regional autonomy since Papua is now administratively divided into six provincial administrations, has caused deforestation and other negative environmental impacts, such as poor water quality, air pollution and soil erosion.
Lack of scrutiny by public and mainstream media on Papua development, and the region’s distance from Jakarta’s oversight, could make things go out of control.
Before the damage becomes uncontrollable, the central government should intervene to introduce a holistic sustainable development plan on a par with other regions in Indonesia. Papua, the least developed region on the country, needs a well - tested socioeconomic development program through which palm oil can bring bene ts to the large Papuan population and maintain lasting peace in the region.
According to 2021 data from the World Resource Institute (WRI), Papua’s total landmass is 41.3 million hectares, which includes 36 million hectares of forest area, or 87 percent of the region’s landmass. Papua’s dominant forest area means it is considered as a special region of high forest cover landscape (HFCL), a term coined by the High Carbon Stock Approach (HCSA) for regions with more than 80 percent forest cover.
According to the Agriculture Ministry, there are 29 active palm oil concessions in Papua totaling 225,000 hectares, or 0.5 percent of Papua’s landmass, an insigni cant portion of the national plantation acreage of around 16 million ha. Licensed concession areas total around 1 million ha and would have been larger if no drastic measures were taken in 2021, when the West Papua administration revoked 16 concession permits totaling 340,000 ha.
But since virtually all oil palm plantations in the region are managed by companies, average palm oil production is 20 percent higher than in other parts of Indonesia. This means Papua has one of the highest productivity rates and the best sites for palm oil development in the world.
Papuans need to be given equal opportunity to develop and thrive economically. Its development opportunity can be fully tapped if the local palm oil industry is developed in a sustainable manner, taking into account the region’s unique sociocultural characteristics.
Franki Samperante of Y ayasan Pusaka, a prominent nongovernmental organization in Papua, noted that oil palm development in Papua must be conducted in a way that highly respects customary laws and protects the interest of indigenous Papuans, workers and environmental sustainability. Palm oil development must also mitigate negative social and environmental impacts. He highlighted the need for policy changes to include community-based development programs that prioritized the decisions and livelihood of the Papuan people.
Unlike Sumatra and Kalimantan, which have seen excessive development of oil palm estates, Papua’s rich lands still o er wide opportunities for new plantations, as long as they are undertaken in a sustainable manner that take lessons from past mistakes. The government should therefore see to it
that the upcoming enforcement of the European Union’s deforestation legislation should not be as rigid and tough as in Sumatra and Kalimantan; otherwise, Papua would be left behind even further in development.
The government instead needs to closely oversee the development of a sustainable development platform in Papua as an HFCL to balance the need for conserving the region’s forests without compromising the sustainability goals. The concept of palm oil development in HFCL is not new. The HCSA has been attempting to develop a framework, but it has been neither tested nor adopted.
In view of the emerging urgency for a new Papua development strategy to accelerate the region’s development toward prosperity and rebuilding peace, the government must be proactive in formulating a regional framework on sustainable palm oil development for Papua as the most viable development option, and which includes three strategies.
First, conduct a region- and landscape-wide reassessment of land use in Papua, to be divided into the two main categories of carbon stock and forest conservation and sustainable development areas with speci c provisions, where some level of controlled development can be permitted while maintaining high carbon stock (HCS) and high conservation value (HCV).
Second, design and adopt a sustainable palm oil development plan for Papua as an HFCL. The framework should lay out the conditions for sustainable oil palm cultivation that incorporates the goals of environmental conservation, regional development and social equity.
Third, reevaluate and restrict oil palm cultivation so it is in full compliance with sustainability standards. New oil palm developments at the existing concession areas covering 1 million ha must be monitored strictly, with priority given to oil palm smallholders.
Finally, we need to educate and convince the market that balanced and sustainable palm oil development in Papua for the region’s prosperity mus t be allowed, and that controlled land cover change should be exempted from the deforestation label.
Okomu Oil plantation agriculture coordinator, Billy Ghansah, speaks on how changes in rainfall patterns and other issues have impacted oil palm production in Nigeria.
Prior to the discovery of crude oil in commercial quantities in Nigeria, palm oil was a major agricultural export crop and a top foreign exchange earner for the country in the 1950s and 1960s. Nigeria was the largest producer of palm oil in the world but has fallen to the fth position with an average production of 1.4 million metric tonnes. In this interview with PREMIUM TIMES, Okomu oil plantation agriculture coordinator, Billy Ghansah, speaks on the e ects of climate change on oil palm production in Nigeria.
Ghansah: Climate change is a ecting oil palm production in two ways. Oil palm needs a lot of water and we are not getting enough of it. The rainfall pattern has changed. We have fewer days of rainfall and the bulk of it is very intense but when it is intense you don’t get what you need. You need more days of rainfall than less days of rainfall. Also, the elongated dry season; that has an impact on our yields generally. Over the past three years, our yields have been dropping compared to the previous times. One will not be able to point his ngers at climate change per se, but then it is the real thing which is happening. Even our rainfall pattern is changing. In terms of total volume, it has not changed that much. But in terms of the pattern, it has changed.
The second thing we have identi ed is an increase in the variety and population of pests. With an oil palm plantation, with any agricultural establishment, one of the basic tenets you will have is that you will have pests and we don’t aim to
eliminate pests, we aim to reduce their populations so that we can have economic returns on our investment. But these days, the population has been going up and the varieties have increased. We have pests, which in a lot of places will not be regarded as pests, which are coming up now and we have issues with them. The immediate impact is the fact that we are spending more money on pest control. But the long-term e ect is the fact that they would have an impact on yield because they would be attacking the plants.
Our practices have not changed. Somebody might say it is because of practices. Maybe usage of more chemicals. But we don’t. We are actually actively reducing the quantity of chemical usage in our plantation.
So my suspicion is maybe due to the fact that there is a change in the environment and you can put your nger on that. Second is the fact that there is more or less an increase in deforestation. I can give you an example of that. Over the last three years, we have had a colony of bats which have taken over part of the plantation. Prior to the deforestation of the western part of Okomu National Park, we never had that problem.
So we suspect they (the bats) have been forced to migrate, and they are getting something equivalent to what they are getting in the forest reserve. Maybe that’s why they are here. Really, they have devastated part of the plantation but these are things one has to live with, look forward to it and manage it.
PT So are there specific climate-smart models you are now adopting to upscale palm fruit production within the plantation?
Ghansah: The problem with oil palm is that it is a longterm crop. Whatever you have planted now cannot be uprooted for you to put new ones in place. So if we look at it, we have long and short-term strategies that we are using.
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The short-term strategy is to try to track the kind of pests which are now coming up and try to understand their ecology and biology, so as to manage them better. The second one has to do with the fact that we have to reduce chemical usage like I said earlier on and look at more eco-friendly chemicals which we are still investigating. Also, we are now concentrating on soil health to see how we can improve the soil that we have. Those are short-term.
But the long-term strategy is that we are breeding for climate resilience. An example is that we alongside our partners are looking at drought-tolerant varieties of oil palm which are slow -growing and which will be able to withstand the long dry weather that we are now encountering. We are also looking at developing best management practices. If we were taking some things for granted we will not be able to, we have to do it better now. And we hope that we can pass on this knowledge to farmers that we are working with of late.
PTIn terms of the change in the weather pattern over the years that you have observed, have you been able to engage or provide any form of sensitisation to smallholder farmers that you are working with concerning these changes?
Ghansah: Yes we are. We, along with our partners, 2-scale and IDH, started a smallholder crop aggregation system here where we buy crops from farmers. Our main aim in doing that was to impart our knowledge to them because the biggest support we can give our farming communities is when they use modern methods of agriculture to help improve their living standard and we would then provide the market for their products at transparent and competitive pricing. Because if I am a farmer and I am not getting good pricing, I will leave. They are not obliged to be with us, but they feel they get better support and better pricing from us. Apart from that, it is also because better agronomic support will help them, and it starts with better planting materials, and support harvesting and cultivation activities generally. That is what we are doing. We just started and along the line, it will become a bigger
thing. For now, it is a very small thing, but we hope that it will go up and we will get a better return from whatever we are doing now.
Has there been a time or period of the year when you expected a larger production output but there was a decline?
Ghansah: Of course, there have been periods like that. Like I told you, in our place, yields have been dropping over the past three years. It is not very very big, but we do notice it. This can have a signi cant impact on our bottom line because we have buyers of our products and we might give them forecasts which are not realised. Therefore, we need to note all these issues. So yes, there is dropping, but it is not that big.
The increase in pests population like you mentioned, how is it like?
Ghansah: Yes there is an increase in pests and varieties. We have never had bats as pests in this place but I am getting them now. I am getting pests like Mots called “Latoya”, which is in oil palm but it was never a problem before now. It has become a problem. And then I asked myself if I am doing something di erent from before. No!
So why would the population (pests) come up? It is because their alternative sources of probable feeding have been lost due to the loss of forest reserves and the fact that there is more intensi ed farming around this area? In those days, most of the farmers were doing slash and burn and they would go. Now I noticed that they are more settled. Unfortunately, they are not doing the best in terms of sustainable agricultural practices and I am afraid there is a lot of work to be done to help improve that. This could be one of the reasons why we are having these changes.
A lot of the farmers are using huge amounts of chemicals in their activities because they don’t get labour and it is more cost-e ective for them. But it has a downside which unfortunately they are not aware of, (especially) in terms of their health and their impacts on the environment.
So what are the sustainable alternatives you think these farmers can adopt going forward?
Ghansah: I just gave you an example. If a man is using chemicals, he should know about the impact of such on the environment and the quantities he has to use. I remember meeting a farmer who said she uses half a litre of glyphosate in 20 litres of water. This means she is using about a ve or six per cent mixing rate (if I am not wrong), whereas we use a one per cent mixing rate. And her argument is simple; she kills everything that is a competitor to her plants.
But in a plantation or a farming environment, if you look at our forefathers, they never meant to kill everything. They coexist with nature and that’s the best practice. When you do that ( I.e using more chemicals), you will tend to build resistant varieties which would then mean you need more chemicals to be used.
The second e ect is that most of these chemicals are not safe when it a ects human beings, so you have to be careful. Our farmers don’t have any idea about this. But this lady was wearing a skirt. She will just go to the river to collect water to mix with her chemicals. One other thing that makes her practice not sustainable also is the fact that the water she was using was muddy. It contains clay particles which will inactivate the chemicals, so she needs more chemicals to get the results.
So there is a huge room for improvement in terms of tailoring messages to farmers to do the right thing. Unfortunately, chemical usage has come to stay. The best way to do it now is to manage it so they don’t misuse it.
Ghansah: What I would like to tell them is that they will have pests and weeds in their plantation and they will have to manage them. But they don’t need to use a sledgehammer to kill a y. That is what they are doing, and it is not their fault, they don’t know. And that is the area like I told you earlier on that we are trying to help them with.
But we don’t deal with all oil palm farmers within the country. Obviously, they would need support everywhere they are. And I hope the support services that are provided by the government are also concentrated in those areas because chemical usage and its abuse is a big problem in mostly our farming communities now. Every chemical is hazardous. The problem is how to use it safely, which is important. They (smallholder farmers) need a lot of support because they don’t know. It is not their fault. If you use poor-quality water, you will be forced to use more chemicals for it to be e ective.
How did the recent flood incident that ravaged communities across the country affect your Banga sourcing?
Ghansah: No, it did not a ect us. We are far away from areas where ooding would normally take place. Most of our farmers have planted far away from riverbanks. Of course, that is the reason why they are safer. But the ooding did a ect a lot of farmers. Don’t forget also that an oil palm farmer is not solely an oil palm farmer, he has other crops. It did a ect some of the people who are into rice cultivation, and sh farms and also made travelling di cult because there are a lot of roadways which were damaged and they could not move around easily. Some of them lost crops which they could not move out during the ooding situation.
How did it affect your company’s shipment of the final product?
Ghansah: It didn’t have a big impact because most of our market is the manufacturing bases in Lagos and other areas in the east. They managed to come and collect them. There were no issues. But I don’t think their distribution was that easy to manage during that period because they distribute their products all over the country and there are places where they would have di culties.
How has the ongoing Russia-Ukraine crisis affected palm oil production and prices?
Ghansah: The Russia- Ukraine war obviously had an initial impact on the prices of commodities. It’s for all commodities and not just oil palm. It had a “positive” impact in pushing up the prices but it was mostly speculation. People have now come to know the reality and they have accepted the condition as it is. Therefore, you will realise that prices are more stable than before when it was going up. It is more stable and it will continue for some time like that. Stability does not mean higher prices, unfortunately. We would have expected a higher price but it is not like that. The price rose to $1,800 per tonne and it dropped to around $1,200 and below even. Besides that, the prices are more stable. That is where it has a ected oil palm prices.
But the other side is the prices of fertiliser which have shot up to the roof. It has tripled. All agricultural producers and even we are also feeling the impact in terms of fertiliser prices. From muriate of Potash to Urea (urea is from the petroleum industry), everything is being a ected.
CAREY ISLAND, Malaysia – Malaysian palm oil farmer Reta Lajah is one of only a few in her village to be certi ed green and ethical, after a yearlong journey to join a global initiative that she hopes will help her navigate a new European Union law to curb deforestation.
Yet, while Reta’s farm in Sungai Judah village on Carey Island, about 60 kilometers from Kuala Lumpur, will protect wildlife and forests, aim to resolve any land disputes and use green growing methods, there is no guarantee she will be able to sell to Europe’s premium-paying buyers in the future.
Agreed in December and due to take e ect within two years, the EU law will force global suppliers of commodities like palm oil, soy and cocoa to prove that their supply chains are not fueling forest destruction.
Green groups warn it could leave many small- scale farmers out in the cold because of requirements for detailed tracing of a product’s source, re controls and land mapping, which many will struggle to meet with limited resources.
That could push risk-averse palm oil buyers in Europe to switch to larger plantations with deeper pockets.
But Reta, who belongs to the Orang Asli or “original people” indigenous to peninsular Malaysia, hopes she will be one of the lucky ones, as she has already earned green certi cation for her 21-acre (8.5-hectare) plot.
“It is like the birth certi cate of a child,” said Reta, as chickens and dogs roamed lazily — helping warn o monkeys in the palm trees overhead — on the farm where she lives with her sherman husband, daughter and ve grandchildren.
Palm oil is the world’s most widely used edible oil, found in everything from margarine to soap, but it has faced scrutiny from green activists and consumers, who have blamed its production for rainforest loss, res and worker exploitation.
In response, many larger growers in Indonesia and Malaysia — the world’s top two palm oil producers — have sought certi cation from the Roundtable on Sustainable Palm Oil (RSPO), a body of plantation rms, consumer groups and environmental organizations.
But smallholders, who produce about 40% of palm oil from those two countries, have so far been largely left behind in that green push, say industry o cials.
The new EU law requires companies to provide a due diligence statement showing when and where their commodities were produced and to give “veri able” information that they were not grown on land deforested after 2020 — or risk hefty nes.
“Large - scale oil palm plantations and smallholders working with them are the biggest winners because they have the nancial means to trace where their palm oil was grown, ” said Danny Marks, assistant professor of environmental politics and policy at Dublin City University in Ireland.
“The biggest losers will be smallholder farmers unless they are provided assistance,” he added.
Reta has been a palm oil grower for 35 years and now experiments with natural fertilizers, uses less chemicals and pesticides, and allows areas on her land to be overgrown with leaves and branches to improve soil quality and the environment.
But only 18 out of 70 small farms in her village are RSPO-certi ed , with many unaware of the upcoming EU law, she said.
“(Certi cation) is a form of insurance for me,” she said. “But I’m not the only smallholder… there are many representing Malaysia — from Sabah to Sarawak — so Europe needs to understand their needs too.”
Globally there are more than 7 million palm oil smallholders, of which only about 175,000 are certi ed by the RSPO, according to the global watchdog.
Sustainability advisors such as Wild Asia, a Malaysia-based social enterprise, work with smallholders like Reta to help them meet RSPO standards but they, too, are worried about the new EU law.
Wild Asia founder Reza Azmi warned that “a hell of a lot of people in many di erent geographies” would be impacted.
The di culty of tracking the origin of commodities means the law is a “nightmare” for industries that process them, he noted, predicting companies importing into the EU could decide to buy only from large trading rms to minimize their risks.
Of Malaysia’s more than 400 palm oil mills, only 20% to 30% are RSPO-certi ed, he estimated, adding that dealers and both small and medium-sized producers supplying the uncerti ed mills will be hit.
Earlier this year, Indonesia and Malaysia said they planned to send envoys to the EU to discuss the law’s impact on their palm oil sectors.
And Malaysian palm oil and rubber smallholders last month led a petition to the EU to protest against the new law.
However, Indonesia’s Union of Palm Oil Smallholders (SPKS), which has more than 70,000 members, issued a statement last year supporting the EU deforestation law.
It could be “a great opportunity for millions of Indonesian palm oil farmers to bene t from the EU market by providing deforestationfree and traceable palm oil products”, they said.
Environmentalists agree the law may help smallholders go green and lead a deforestation push — but argue this will require aid from EU nations and investment from palm oil buyers to incentivize small farmers to meet the law’s requirements.
Marks of Dublin City University said the EU could o er a premium price for palm oil produced sustainably and legally, and set a minimum quota for the share sourced from smallholders.
Conservation groups funded by the EU could also support re control training and farm mapping, while businesses could invest more in smallholders so they can adopt green methods, he added.
“This would make sure that smallholders will not be left out by the new law which was enacted with good intentions,” he said.
Small- scale growers could also form cooperatives and work to comply with the new EU regulation before it is introduced, said Syahrul Fitra, a senior forest campaigner at Greenpeace Indonesia.
Antoine Gilbert, EU policy o cer at the Forest Peoples Program (FPP), a European human rights group, urged the RSPO to upgrade its standards to match the ambitions of the EU law.
The RSPO standards for growers — reviewed every ve years — will be updated by the end of 2023, and will see improvements in their implementation and audits, an RSPO spokeswoman said.
The RSPO is now assessing how its processes and standards can best support members, including smallholders, to comply with the EU regulation, she said, adding that digital traceability throughout the supply chain is also being strengthened.
The EU declined to comment.
The FPP’s Gilbert urged the EU to ensure that, in implementing the new law, the needs and rights of Indigenous peoples, local communities and smallholders like Reta are respected and that they are able to participate.
Reta — who began growing oil palm in 1988 after getting married and being allocated 3 acres of land by Malaysia’s indigenous a airs agency — said her income from the business had enabled her to buy motorbikes for her children to travel to school 13 km away and give pocket-money to her grandchildren.
“Palm oil has secured my future and that of the community here. (It) helps me not worry about what the future holds,” she added.
As an Indigenous woman, Reta knows the value in forests and ecosystems, and sees the new EU law as a good thing that can motivate other smallholders to protect nature and adapt.
While she is also able to sell to major buyers in places like China and India, she urged governments to negotiate so that access to EU markets is not cut o for small-scale producers.
Meanwhile, she is happy to o er guidance to her neighbors on how to become RSPO-certi ed in the hope that they can keep on supplying to European countries.
“It’s important they start as soon as they can,” she said.
Today agtech company Permia Sensing announces £250,000 in a pre-seed round led by early-stage focused venture capital rm Jenson Funding Partners. While the round is considerably smaller than some we cover at Tech.eu, there are a lot of reasons why this company should be on your radar.
Permia Sensing is a spino of Imperial College, London. It is developing precision farming techniques that transform palm plantation farming practices and help reduce unsustainable farming practices.
Historically, the growth of palm plantations and the use of palm oil is highly problematic from an environmental standpoint.
It's linked to illegal growth in wild forests, deforestation and displacement of endangered species, and forced slavery.
But palm plantations play a signi cant role in global agriculture as they produce oil, coconuts, and dates.
Palm oil is used in 50% of all packaged goods in the US and other regions, from cosmetics to furniture and clothing. It is a highly e cient crop – producing 40% of total vegetable oil production whilst using 6% of land.
Permia Sensing announces a pre-seed funding round. The company is creating precision farming techniques that transform palm plantation farming practices and solve some of the problems surrounding the ine cient use of palm farming.
Permia Sensing helps incentivise sustainable palm farming practices, helping farmers grow greater, healthier yields using less land. This helps lead to industry change.
Currently, palm plantations only use half of their potential yield due to factors such as lack of nutrients, drought or disease, palm plantations, on average, produce just half of their potential yield.
The company has developed an acoustic sensor at Imperial College that uses AI and robotics to detect red palm weevil, a harmful pest for coconut palm trees that is known to damage an estimated 10 percent of the coconut yield globally.
The acoustic sensor, which has 97 percent accuracy, also monitors tree health for nutrient and irrigation levels.
The sensor data is utilised alongside imagery and Permia Sensing's AI- powered platform to help growers analyse tree-level data across an ntire palm plantation and suggest ways to improve yields.
"Much research has shown us that we are not working palm plantations in the most effective way possible, particularly when we consider just how much palm is required for global use… We hope to help farmers globally generate the most sustainable yield from the healthiest trees. By minimising some required input we can reduce CO2 emissions, not to mention the social impact of generating more income within the supply chain."
Tanzanian research institutes have discovered new high yielding palm oil seeds that is set to boost the cultivation of the trees and production of the edible oil in the country.
The new variety of the palm oil seeds called Terena has gone through trials in some of the cultivation areas in the country such as Kigoma, Kagera, Tabora and Coastal regions and has shown good results.
Announcing the good news during a swearing in of state leaders yesterday in Dodoma, Tanzanian premier Kassim Majaliwa said that the discovery is a great step made by the research institutions in the recent past for the agricultural sector.
“The government has been strategizing with the view to increasing local production of palm oil seeds so as to reduce dependence on importation and end price uctuations hence this discovery is a big breakthrough for the country,” said Majaliwa.
He has also urged Small Industries Development Organisations (SIDOs) to continue developing good and simple palm oil milling technologies, which can enable Tanzanians to produce more and better oil in the country.
According to Smallholder Oil Palm Handbook Module1, in oil palm, the best yields are produced by hybrids like Terena , a cross between two di erent types of parents namely dura and pisifera palms.
The mother palm hybrid dura fruits have a thick shell while the father palm pisifera fruits have no shell at all. A cross between the two results into hybrid tenera fruits with a thin shell.
Terena palms produce up to 30 percent more oil than their parents and their fruits have brown/black bres in the outer covering.
In a move to realise its target of producing 700,000 tonnes of edible oil a year, Tanzanian government instructed Agriculture Seeds Agency (ASA) to produce 15,000 tonnes of quality seeds for distribution to farmers in various regions by 2025.
“We have a strategy to increase the size of land used for seeds multiplication from 15,000 hectares to 250,000 hectares in order to increase the quantity of seeds produced annually,” said Anthony Mavunde, Tanzania’s Deputy Minister for Agriculture.
He said the government increased the ministry’s budget from Sh294 billion to Sh751 billion in the 2022/23, something that will enable the agency to meet its seeds multiplication target of 10 percent growth reaching 2030.
The major crops for edible oil production in Tanzania are sun ower, palm oil, groundnuts, sesame, soya beans and cotton.
Mr. Majaliwa also instructed commissioners in the oils production regions to ensure that they introduce standard palm oil measuring scales instead of local containers known as Bidoo, designed to exploit smallholder farmers.
“Citizens should not be exploited by Bidoo measuring units which are not regulated by the l aw and a buyer using such measures should be reported and action taken,” he said.
Farmers have been exploited a lot through the use of Bidoo measuring units, especially in cases where buyers enlarge a 20 litres container using hot water to increase its capacity to 25 litres and end up paying the price of 20 litres.
Tanzania produces 205,000 tonnes of cooking oil a year through oil seeds against a demand of 570,000 tonnes.
The de cit is imported from Malaysia, India, Singapore and Indonesia at a cost of $204.7 million per year. Shortage of edible oil has pushed retail prices from $1.3 to $2.8 per litre.
