Nestlé to stop sourcing palm

IN BRIEF

AUSTRALIA: Global agribusiness giant Louis Dreyfus Company (LDC) announced its acquisition of leading Australian grain handling business Emerald Grain from Long River Farms on 26 September.

Emerald Grain operates a network of seven grain storage and reception sites across the Australian states of New South Wales and Victoria, with a combined storage capacity of 1M tonnes.

The company also has a grain export terminal at the Port of Melbourne.

LDC said it had been active for over a century in Australia, originating, processing and exporting grains, oilseeds and cotton. Emerald Grain exports a range of grains including barley, canola and wheat, to over 35 global markets.

USA: Glencore’s agriculture division Viterra said on 3 October that it had completed its US$1.125bn acquisition of the grain and ingredients business of US firm Gavilon from Marubeni America Corporation.

Gavilon sources, stores and distributes grains, oilseeds and feed and food ingredients to US and global markets. With assets located in key growing areas in the USA, Gavilon’s operations have access to major railways, rivers and ports.

The company has 105 grain storage facilities and a total grain storage capacity of 345.5M bushels, according to Sosland Publishing’s 2022 Grain & Milling Annual.

Glencore is a multinational commodity trading and mining company.

Viterra was formerly known as Glencore Agriculture but rebranded in 2020. It is active in 37 countries and has a network of agricultural storage, processing and transport operations.

Nestlé to stop sourcing palm oil from Astra Agro Lestari

Swiss food and drink giant Nestlé plans to stop sourcing palm oil from subsidiaries of leading Indonesian palm oil producer Astra Agro Lestari following environmental groups’ allegations of land and human rights abuses by the company, Reuters reported on 30 September.

Nestlé, the manufacturer of KitKat chocolate and Nespresso coffee, told Reuters that following a recent independent assessment, it had instructed its suppliers to ensure palm oil from three subsidiaries of AAL did not enter its supply chain.

Without specifying the claims against AAL other than to say it had been on its “grievance” list for several months, Nestlé said it expected it would not be using any palm oil from the company by the end of the year.

AAL denied the accusations made against it.

“Astra Agro is very serious about implementing our sustainability policy. It is not true that Astra Agro or its subsidiaries carry out land grabbing,” AAL president director Pendidikan Santosa told Reuters.

Nestlé was not a direct buyer of products produced by AAL but most probably bought from its customers, Santosa added.

The European Commission had proposed several laws aimed at preventing and, in the case of forced labour, banning the import and use of products linked to environmental and human rights abuses, Reuters wrote.

Environmental group Friends of the Earth said Nestlé’s move to stop sourcing from AAL was an important “first step” and called on other leading consumer companies to follow.

CSPO production rises by nearly 6%

The RSPO says that production of certified sustainable palm oil has risen by 5.7% in 2021 compared with 2020 Photo: Adobe Stock

Production of certified sustainable palm oil (CSPO) rose by almost 6% last year, according to the Roundtable on Sustainable Palm Oil (RSPO)’s latest Annual Communication of Progress (ACOP) report.

RSPO members with palm oil estate and mill operations reported total CSPO production of 14.7M tonnes in 2021, representing 19% of total global production of crude palm oil (CPO). This was a 5.7% increase compared to the previous year, the RSPO said on 15 September.

CSPO sales by mills increased by 13.5% compared to 2020 with an estimated total of 9M tonnes (RSPO credit volumes or physical supply), representing 61% of total CSPO production.

Total certified land area – excluding independent smallholders – farmed by RSPO members reached 4.45M ha in 2021.

Among the five main growing countries and regions, Latin American growers continued to perform well, with 27% of the region’s total production as CSPO and a further potential 43% in line for certification, the RSPO said. Malaysia, Indonesia and Africa continued to make steady progress.

CSPO consumption using RSPO credits or physical supply chains (mass balance, segregated, identity preserved) totalled an estimated 8.53M tonnes last year, a significant 12.2% increase from 2020.

Among the key consumption regions and countries, Europe and North America continued to maintain the high CSPO uptake seen over recent years, the RSPO said.

Europe showed a strong rise in CSPO consumption at 3.49M tonnes, representing an overall uptake of 48.6%. North America had an uptake of 82.3% CSPO, up from 81% in 2020. Latin America reached a double-digit uptake of 13.9%, while China and India reached 8% and almost 3% respectively.

Looking ahead towards 2030, the RSPO said one of the main challenges was the gap between CSPO production and consumption through RSPO supply chain models or other certification schemes for members holding multiple certifications, leading to a portion of CSPO production downgraded to conventional palm oil when traded.

NEWS

Indonesia to extend export waiver

The Indonesian government is planning to extend a palm oil export tax waiver unti l the end of the year, Reuters reported the country’s chief economic minister as saying.

Indonesia started removing taxes on exports of palm oil products from mid-July to help reduce excess stocks following a three-week export ban, which had been introduced in late April in a bid to stabilise local cooking oil prices, the 4 October report said. The tax waiver policy was scheduled to end aft er 31 October.

“The plan is for an extension... unti l the end of the year,” Indonesia’s chief economic minister Airlangga Hartarto was quoted as telling reporters.

Indonesia collects export levies, on top of a separate export tax, to fund subsidies for its biodiesel and smallholder replanti ng programmes.

However, following a reducti on in palm oil prices with the cost of palm oil-based biodiesel now lower than fossil diesel fuel, Indonesia currently needed less funds for the biodiesel programme, Hartarto said.

The government would conti nue to monitor the implementati on of its Domesti c Market Obligati on (DMO) policy, which had been introduced in late May to ensure domesti c cooking oil supply following the lift ing of the palm oil export ban, he added.

Under the DMO policy, palm oil exporters are required to sell a porti on of their products to the domesti c market before they can receive a permit to export. Companies are currently allowed to export nine ti mes the amount they have sold domesti cally.

Indian palm oil imports rise18% in September

Palm oil imports in India rose by 18% compared to the previous month, AgriCensus reported from informati on published by the Solvent Extractors’ Associati on of India (SEA).

The world’s largest edible oil importer took in 1.17M tonnes of palm oil – consisti ng of refi ned bleached and deodorised (RBD) palm olein, crude palm oil (CPO) and crude palm kernel oil (CPKO) – in September, while soft oils imports totalled 421,625 tonnes, the 13 October report said. The increase in palm oil imports was due to a substanti al price diff erence between palm oil and soyabean oil, with the former trading at more than US$400/tonne less in September.

Year-on-year RBD palm olein imports were higher, with Indian buyers favouring Indonesian exporters due to more competi ti ve prices and lower duti es, the report said.

In September, India imported 716,221 tonnes and 428,211 tonnes of palm oil from Indonesia and Malaysia respecti vely, refl ecti ng the demand for cheaper Indonesian products, AgriCensus wrote. Soyabean oil imports in India increased slightly in September, rising 7% to 261,815 tonnes and sunfl ower oil imports rose 18% to 159,810 tonnes.

However, overall palm oil imports fell in the fi rst 11 months of the current marketi ng year (beginning November 2021), with palm oil imports 8% lower than the same period the previous year at 7.03M tonnes.

IN BRIEF

NORTH AMERICA: Danish supplier of rendering and processing technology Haarslev is teaming up with US renewable fuel firm Grön Fuels to evaluate potential rendering by-product and investment opportunities, PR Newswire reported on 4 October.

Grön Fuels would provide capital in exchange for product and Haarslev would provide rendering equipment to a potential rendering facility, the report said. The alliance would include North American rendering projects within Haarslev’s development pipeline.

Grön Fuels operates a sustainable aviation fuel and renewable diesel plant at the Port of Greater Baton Rouge in Louisiana processing feedstocks including fats, oils and greases.

CHINA: China is expected to produce 27.52M tonnes of vegetable oil in 2021/22, according to the monthly update to the country’s Agriculture Supply and Demand Estimates (Casde) reported by AgriCensus on 13 September. Imports are forecast at 5.93M tonnes, with rapeseed and soyabean oil imports estimated at 1M tonnes and 380,000 tonnes respectively. Casde said it expected consumption of edible vegetable oil to be stable at 36.34M tonnes for the marketing year, which runs from October to September for vegetable oil, corn and soyabeans.

Argentine farmers sell record volumes of soya

Farmers in Argentina sold a record volume of soyabeans – more than 13.7M tonnes – in September, following the government’s introduction of a special exchange rate for producers, according to a report by the United States Department of Agriculture (USDA) on 11 October.

The special temporary exchange rate of 200 Argentine pesos/US$1 was introduced for soyabean exports from 5-30 September.

“This [rate] raised the peso-denominated price of soyabeans in the local market by 38% practically overnight,” the USDA Foreign Agricultural Service (FAS)’s Global Agricultural Information Network (GAIN) report said. As a result, exporters made almost 4M tonnes in export declaration, with China the principal destination.

The USDA projected Argentine soyabean exports for 2021/22 at 5.5M tonnes. For 2022/23, production was forecast at 49M tonnes.

Political considerations continued to affect farmers, the report said, and the recent boom in soyabeans combined with elections in 2023, meant that sales of all commodities were likely to slow down until August 2023, when farmers would see the results of primary elections.

“If the conservative opposition performs well, farmers are likely to hold onto as much grain and oilseeds as possible, hoping that a change of government in December 2023 could result in the end of currency controls and potentially lower export taxes,” the report said.

“In contrast, a stronger than expected performance by the ruling coalition in August 2023 could mean that farmers would begin selling in earnest to avoid any new taxes imposed by a re-energised Peronist government.”

China to use less soya meal for food security

Photo: Adobe Stock

The Chinese government has announced plans to reduce the amount of soyabean meal in feed products as part of a larger plan to boost food security, World Grain reported.

The plan was posted by China’s Ministry of Agriculture and Rural Affairs following a meeting on 19 September.

The ministry said demand for feed grains continued to grow and "the most prominent contradiction in food security lies in feed grains”.

Soya meal reduction and substitution has been introduced in recent years and the ministry said the proportion of soya meal in feed consumed by its aquaculture industry had dropped to 15.3% last year, a 2.5% fall compared to 2017. This had saved 11M tonnes of soya meal, equivalent to 14M tonnes of soyabeans.

The US Department of Agriculture had forecast a record Chinese soya meal output of 75.2M tonnes for 2022-23, and a domestic soyabean crop of 18.4M tonnes, World Grain wrote. However, the country was still mostly dependant on soyabean imports for domestic use, with a forecast 97M tonnes of imports in 2022-23.

FDA proposes new 'healthy' definition on packaging

The US Food and Drug Administration (FDA) is proposing to change the definition of 'healthy' on food packaging in a bid to improve diet and reduce chronic disease.

The proposed change would bring the ‘healthy’ claim in line with current nutritional science, the updated Nutrition Facts label and the current Dietary Guidelines for Americans, the FDA said on 28 September.

Under the proposal, in order to be labelled with the ‘healthy’ claim on food packaging, food products would need to: • Contain a certain meaningful amount of food from at least one of the food groups or subgroups (such as fruit, vegetable and dairy) recommended by the Dietary Guidelines. • Adhere to specific limits for certain nutrients, such as saturated fat, sodium and added sugars. The threshold for the limits is based on a percentage of the Daily Value (DV) for the nutrient and varies depending on the food and food group. The limit for sodium is 10% of the DV/serving (230mg/serving). For example, a cereal would need to contain 21.2g of whole grains and contain no more than 1g of saturated fat, 230mg of sodium and 2.5g of added sugars.

IN BRIEF

EUROPE: Global agribusiness giant Bunge and Olleco, UK, are forming a 50/50 joint venture to create a full life-cycle oil collection business in Europe.

The joint venture would involve the collection of used cooking oil from food service and food manufacturing customers in Europe – excluding the UK and Ireland –for use as a feedstock in the production of renewable fuels, the firms said on 13 October.

Olleco is the renewables division of ABP Food Group and collects oil for conversion into biofuels and food waste for conversion into renewable energy and fertiliser.

EU: EU oilseed production is forecast to rise by 3% in 2022/23 based on increased planted areas of rapeseed, soyabeans and sunflower, according to a United States Department of Agriculture (USDA) on 12 October.

Soyabean planted area was forecast to rise by 11.1%, with rapeseed and sunflower areas set to be up by 9.7% and 10.3% respectively. The rise in rapeseed planting was the first since a signficant decline in 2019, the USDA said.

“Attractive commodity prices, and to some extent uncertainty in the Black Sea market due to Russia’s invasion of Ukraine, are the major drivers for the increases in area."

Fate of Amazon hangs on Brazil presidential election

The Amazon’s future rests on the result of Brazil’s national election, according to experts quoted in a report by The Guardian on 3 October.

Following the close result of the first voting round on 2 October, left wing candidate Luiz Inácio Lula da Silva was due to face far-right incumbent Jair Bolsonaro in a second vote on 30 October. Both candidates fell short of the more than 50% of valid votes needed to prevent a second round.

Experts say the rampant destruction under President Bolsonaro could push the world’s biggest rainforest past an irreversible tipping point, according to an earlier report by The Guardian.

In contrast, scientists estimated that a victory for the former president Lula, who oversaw a sharp decline in deforestation when in power, could lead to a 90% drop in the destruction of forests, the report said.

Bolsonaro became president at the start of 2019 and had slashed environmental protections and promoted colonisation of the forest, The Guardian said, with research showing that CO2 emissions doubled in 2019 and 2020 compared with the average over the previous decade.

Almost 1M ha of rainforest has been burned in the past year, according to the latest data reported by the newspaper.

If he wins, Lula has said he would reverse Bolsonaro’s legal changes, reform environmental agencies and drive illegal miners out of indigenous lands. Under the presidency of Lula and his Workers’ party successor, Dilma Rousseff, deforestation fell by 72% from 2004 to 2016, according to an earlier report by The Guardian on 30 September.

A third of olive oil from intensive farming

Photo: Adobe Stock

A new report has found that 'super high-density' groves account for more than a third of global olive oil production, with their proportion likely to grow, Olive Oil Times wrote on 10 October.

Although the groves make up just 3% of olive-growing hectares in the world, they account for 36% of global olive oil production, according to the study conducted by Juan Vilar Strategic Consultants and published by Spanish tree nursery company Agromillora.

The study said that of the world's 11.6M ha of olive groves in 66 countries, 400,000ha were 'super high-density groves' on which about 1,600 olive trees/ha were planted. The groves were dependent on water availability and mostly flat landscapes.

Agromillora said this farming method resulted in greater productivity and lower workforce costs due to high mechanisation, with quick delivery of the fruits to the mill, leading to less deterioration. Harvesting a hectare of super high-density olive trees required one or two hours, with harvesting costs reduced to US$0.029US$0.059, the company said.

Brazilian firms halt soya crushing due to low margins

Around 10 Brazilian soyabean crushing companies halted processing operations due to falling margins and weak demand, AgriCensus quoted local sources in a 29 September report.

As a result, the country’s crushing rate dropped by 15,000 tonnes/day, representing about 8% of the country’s capacity.

In an earlier report, AgriCensus wrote that eight soyabean crushing facilities had halted operations on 12 September but, since then, two more plants had followed.

“Crushing margins are really bad again,” Victor Martins, senior risk manager at HedgePoint Global, told AgriCensus. “But some plants will continue to operate as they are better off crushing with negative margins than having the beans as stock."

Crushing plants usually carried out maintenance work around December/January, ahead of the soyabean harvest in Brazil, but plants were going offline earlier than anticipated this year, the report said.

Soyabean processing capacity is estimated at 194,400 tonnes/day in Brazil, which is the second largest exporter of soyabeans oil globally, behind Argentina. Brazil is expected to export 2.13M tonnes of soyabean oil and 18.8M tonnes of soyabean meal in 2022/23, according to the USDA.