Demand for eco-friendly palm oil sourced from major producers Indonesia and Malaysia has risen over the last two weeks, said an industry executive, fueling hope that buyers aren't turning their back yet despite a renewed anti-palm lobby by nongovernmental organizations and consumer groups.
"We have some significant volume traded (over the last two weeks). Over 180,000 palm and palm kernel oil certificates have been traded," said Bob Norman, manager at U.K.-based GreenPalm, a brokerage recognized by the Roundtable on Sustainable Palm Oil (RSPO) for trade in eco-friendly palm oil certificates.
One GreenPalm certificate is equivalent to a metric ton of certified palm oil.
The volume accounts for 11% of 1.57 million tons, the combined annual capacity of RSPO-certified producers in Malaysia, Indonesia and Papua New Guinea as of May 2009.
The rise in demand was mainly driven by a lower premium attached to certified palm oil, which has been shrinking to around $10 per certificate from $40, when the first green palm oil was shipped to European markets last November, Norman said via email over the weekend.
Through GreenPalm, RSPO-certified palm oil producers receive GreenPalm certificates when they register an amount of their palm oil output. The certificates will be up for auction on GreenPalm's trading platform, where buyers bid and buy certificates online.
When food producers buy these eco-friendly certificates, it entails that money goes to growers who produce palm oil with minimal damage to the environment.
Data from GreenPalm's Web site showed that consumer goods companies such as Cadbury Plc (CBRY.LN) and Unilever Plc (ULVR.LN), previously criticized for shying away from higher-priced sustainable palm oil, are now buying more. Like other consumer products manufacturers, Cadbury and Unilever pour palm oil into a wide variety of food and cosmetic products such as biscuits, margarine and lipsticks.
The RSPO was formed after oil palm growers drew flak from NGOs and environmentalists who said oil palm land cultivation led to deforestation and an increase in greenhouse gas emissions.
RSPO-certified producers using the GreenPalm trading platform include Malaysia-based major plantation firms Sime Darby Bhd. (4197.KU), United Plantations Bhd. (2089.KU), Kuala Lumpur Kepong Bhd. (2445.KU) and Papua New Guinea-based New Britain Palm Oil Ltd. (NBPO.LN).
-By Shie-Lynn Lim, Dow Jones Newswires; +603 2026 1233; shie-lynn.lim@dowjones.com
(END) Dow Jones Newswires
October 26, 2009 03:44 ET (07:44 GMT)
Copyright (c) 2009 Dow Jones & Company, Inc.
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