FSC cuts ties with Korean

IN BRIEF

INDONESIA: The government has lowered its top crude palm oil (CPO) export levy rate by US$80/tonne, – to be applied when palm oil prices reached above a US$1,000/tonne , AgriCensus reported on 20 June.

Export duties would be US$50/tonne when palm oil prices reached a minimum of US$750/tonne. For every US$50/tonne increase in price, the duty would rise by US$50/tonne for palm oil and US$16/tonne for products – up to the ceiling rate of US$175 when CPO reached above US$1,000/ tonne, the report said.

Indonesian CPO prices had decreased to US$1,045/ tonne in mid-June, an 18% fall since their peak in early May, Palm Oil Analytics said.

FSC cuts ties with Korean palm oil operator Korindo

The Forest Stewardship Council (FCS) announced on 14 July that it was ending its association with Korean timber and palm oil operator Korindo.

“Korindo was required to fulfil several conditions set by FSC to address inadequate past performance in their [Indonesia] palm oil business, and to determine that no further improper activities were taking place,” FCS said. However, FSC and Korindo were not able to agree on the procedure to independently verify progress.

The NGO said its relationship had "become untenable" and Korindo's trademark licences with FSC would be terminated from October.

The case began in 2017 when environmental campaign group Mighty Earth filed a complaint to FSC, alleging Korindo’s involvement in deforestation, human rights abuses and destruction of high conservation values in forests converted into oil palm plantations in Papua and North Maluku.

FSC said its investigations confirmed that Korindo had converted forests to establish oil palm plantations, damaging high conservation value forests; and that Korindo had not met its standards for free, prior and informed consent.

In 2019, FSC set out six conditions for Korindo including a ban on land clearing and any activities in high conservation value areas. However, the disagreement on independent verification had led the organisation to cut its legal ties with Korindo.

Korindo chief sustainability officer Kwangyul Peck said in a statement on 15 July that the company had been in the process of working towards unconditional association with FSC. "We are confident to reactivate the process as soon as possible, making this a temporary situation only.”

Korindo’s website said the group had 20,662ha of palm oil concessions in Papua and 8,444ha in North Maluku, totalling just under 30,000ha, of which 9,149ha planted. The firm has operations in plantations (timber, palm oil and rubber); paper and forest products; construction and heavy industry; logistics; real estate; and financial services.

US lawsuits target fish oil supplement producers

A number of lawsuits have been filed in the USA alleging that fish oil products do not contain fish oil, law platform JD Supra reported on 9 June.

Filed in California federal courts, the lawsuits targeted well-known dietary supplement products, alleging that the transesterification process used to create fish oil supplements left the finished products without any of the omega-3 fatty acids DHA or EPA, JD Supra wrote.

The plaintiffs also alleged that the resulting omega-3 molecules in the finished product were different to the omega-3 molecules naturally found in fish oil.

“Once transesterified, fish oil is irrevocably transformed, such that it is no longer fish oil and therefore cannot be so named or labelled,” the lawsuits alleged. For this reason, the plaintiffs claimed that these products misled the public with false and deceptive labelling that was in violation of federal and state laws.

The lawsuits were still in their early stages but the potential impact was substantial, with fish oil supplements representing a large consumer market, JD Supra said.

Photo: Pixabay

US lawsuits are alleging that fish oil supplements do not contain fish oil

Indonesian company commits to forest remediation plan

A palm oil plantation owned by PT Agrinusa Persada Mulia is planning to restore forest in Indonesia as part of a remediation plan, Eco Business reported on 15 June.

KPN Plantation, known as Gama Plantation until 2019, said it would remediate 38,000ha of forest in Papua and West Kalimantan, provinces that had undergone mass deforestation between 2013 and 2018, according to the report.

KPN’s chief operating officer, Hendri Saksti, was quoted as saying that the company’s plan “reaffirmed our responsibility and commitment to remedy past mistakes”.

In KPN’s recovery plan, the company had committed to restore three times the area of forest it believed it was liable for clearing, Eco Business wrote. Remediation efforts would include peatland rewetting, reforestation, conservation and social forestry.

In 2018, a Greenpeace investigation revealed that Gama, a group of plantation firms, had cleared 21,500ha of rainforest in Papua and West Kalimantan during the previous five years, Eco Business wrote. A Greenpeace campaign targeted Singapore-listed Wilmar International, leading Wilmar to cut off Gama and several other palm oil suppliers in June 2018.

Gama then declared a group-wide moratorium on new land development and, after consulting with Wilmar and environmental group Aidenvironment, consolidated the 63 companies that operated on 200,000ha of plantation area into a single group. Wilmar re-instated Gama as a supplier in 2019.

NEWS Al Ghurair to buy leading Middle East crusher

Al Ghurair Investment (AGI) is acquiring multi-seed crusher Edible Oil Company (EOCD) from Dubai Investment Industries (DII), World Grain reported on 29 June.

A leading crushing company in the Middle East, EOCD can crush up to 2,200 tonnes/ day of soyabeans, 1,300 tonnes/day of canola seeds and 1,000 tonnes/day of sunflowerseeds, according to the report.

The agreement was a step towards AGI’s commitment to expanding its food and resources business in the United Arab Emirates (UAE) and wider region, World Grain wrote.

“Following a decade of success in co-operation with EOCD, now is the opportune moment for us to acquire this thriving business to augment our existing resources portfolio, as we prepare for our next phase of growth,” AGI group chief executive officer John Iossifidis said.

DII would continue to pursue investments across strategic projects to diversify its business portfolio, the report said.

“The time was now right for EOCD to benefit from AGI’s expertise and strengths within the sector. We are optimistic this divestment will channel a new growth curve for EOCD,” DII general manager Mohammed Saeed Al Raqbani said.

IN BRIEF

WORLD: Global food commodity prices fell in June for the first time in 12 months, according to the benchmark United Nations Food and Agriculture Organization (FAO) Food Price Index released on 8 July.

The index tracks changes in the international prices of the most globally traded food commodities and averaged 124.6 points in June, down 2.5% from May, but still 33.9% higher compared with the same period last year. The decline in June marked the first drop in the index following 12 consecutive monthly increases, reflecting declines in the prices of vegetable oils, cereals and dairy products, the FAO said. This more than offset generally higher meat and sugar prices.

The FAO Vegetable Oil Price Index averaged 157.5 points in June, falling by 9.8% from May and marking a four-month low.

“The sizeable drop mainly reflects lower prices of palm, soyabean and sunflower oils,” the FAO said.

“After rising for 12 consecutive months, international palm oil quotations retreated in June, chiefly influenced by prospective seasonal production gains in leading producing countries and a lack of fresh import demand. Meanwhile, subdued global import demand also exerted downward pressure on soya and sunflower oil prices."

Lower rapeseed crop from Canadian heatwave

Canadian rapeseed crop estimates have been lowered following a record heatwave at the end of June which saw temperatures reach just below 500C and dozens of deaths.

The US Department of Agriculture (USDA) lowered its yield forecast to 22.4 decitonnes/ha and output down to 20.2M tonnes, Germany's Union for the Promotion of Oil and Protein Plants (UFOP) reported on 21 July.

Prices rose as a result, with Winnipeg canola futures reaching a record high at the equivalent of just less than €661/tonne on 13 July. An exceptional increase had already been recorded in the days before, with the largest possible gain in one trading day having been reached. "In other words, rapeseed rose around €100/tonne in Canada in a single week," UFOP said.

Whereas Canada's stocks from 2019/20 amounted to just over 3M tonnes, the country's storage facilities were virtually empty at 1.2M tonnes prior to the 2021 harvest. "Even if the harvest were to reach the estimated 20.2M tonnes, exceeding the previous year's output by 1M tonnes, total supply would slide to a level 740,000 tonnes below the previous year's figure and 1.5M tonnes below the five-year average," UFOP said.

Temperatures reached 49.60C in western Canada at the end of June

Bursa Malaysia to launch new contract

Bursa Malaysia will launch a new palm oil futures contract (FCPO) for East Malaysian palm oil producers, The Edge Markets reported on 24 May.

“The [new] contract mirrors most of the FCPO specifications, with enhancements made to benefit East Malaysian palm oil players,” Bursa Malaysia Derivatives CEO Samuel Ho said.

Located in the East Malaysian island of Borneo, Sabah state and neighbouring Sarawak contribute 45% of Malaysia's crude palm oil (CPO) production, The Edge Markets wrote.

Palm oil traders in the two states have said the current contract puts them at a disadvantage as East Malaysian is typically sold at a discount to spot prices in Peninsular Malaysia, while freight costs are higher as the designated delivery points are also in the peninsula, making physical delivery unfeasible, according to the report.

The new East Malaysian Palm Oil Futures (FEPO) contract would cater for physical deliveries in East Malaysia through three designated ports.

“With the launch of FEPO, we are also integrating Malaysian Sustainable Palm Oil (MSPO)-certified CPO from East Malaysia into the derivatives market delivery process,” Bursa Malaysia added.

Bursa Malaysia’s FCPO contract sets the global price benchmark for palm oil. • Bursa Malaysia announced on 1 July that it would launch after-hours night trading by the fourth quarter of this year, enhancing the attractiveness of the Malaysian derivatives market to traders around the world.