OFI April 2017 Digital Issue by Quartz

DIGITAL EDITION April 2017 www.ofimagazine.com

COLOMBIA

Growing palm oil potential

BREEDING SEEDS

Productivity and sustainability

Palm Oil Digital Edition

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Science behind Technology

T H E B USI N ESS MAGAZI NE FOR THE OILS AND FATS INDUSTRY

CONTENTS DIGITAL ISSUE APRIL 2017 EDITORIAL: Editor: Serena Lim Tel: +44 (0)1737 855066 E-mail: serenalim@quartzltd.com

NEWS & EVENTS 2

MEPs crack down on ‘unsustainable’ palm oil imports

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News

Show review: POC 2017

Palm oil output to climb 6

Diary of events

Statistics

WITH 7.5M HA AVAILABLE FOR GROWING OIL PALM, COLOMBIA, WHICH RANKS FOURTH IN GLOBAL PRODUCTION OF PALM OIL, HAS HUGE POTENTIAL TO CONTRIBUTE TO WORLD STOCKS. P8

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Colombia: Growing palm oil potential

PROCESSING

14 Breeding for sustainability INSTRUMENTATION

Published by Quartz Business Media Ltd Quartz House, 20 Clarendon Road Redhill, Surrey RH1 1QX, UK Tel: +44 (0)1737 855000 Fax: +44 (0)1737 855034 E-mail: oilsandfats@quartzltd.com

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Oils & Fats International

3-MCPD and GE: A new challenge

NMR applications with palm oil

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PALM OIL – NEW S

MEPs crack down on ‘unsustainable’ palm oil imports M embers of the European Parliament (MEP) voted on 4 April in favour of a report calling for a single certification scheme for palm oil entering the EU and the phase-out of unsustainable vegetable oils in biofuel production. With the move, the Parliament aims to counter the impact of unsustainable palm oil production, such as deforestation and habitat loss. “We want an open debate with all players so we can make palm oil production sustainable without cutting down forests and in compliance with dignified human rights conditions,” said Parliament rapporteur Katerina Konecná, who drafted the resolution.

IN BRIEF COLOMBIA: Liquid and bulk terminal company Zenith Energy LP has entered into an agreement with food and agri firm Cargill for the storage and handling of palm oil in Colombia. Construction at Zenith’s Palermo Tanks Terminal, located in the port of Barranquilla, commenced on 1 February 2017, with the aim to build 19,000m3 of storage capacity in four dedicated tanks for Cargill’s palm oil operation. The long-term contract, for which financial terms were not released, included the construction of a new dyke, tanks with heating system, a dedicated dock line, dedicated truck loading and unloading positions with capabilities to import and export products, according to a statement released by Zenith on 22 March. INDONESIA: Belgian agroindustrial firm Sipef has agreed to buy 95% of Indonesian oil palm plantation operator PT Dendy Marker Indah Lestari (DMIL), located in Musi Rawas Utara, South Sumatra. DMIL owns 6,562ha of cleared/planted oil palm, with a potential to expand to 9,000ha. The palm fruit is processed at a 25 tonnes/hour extraction mill and the operations are Roundtable on Sustainable Palm Oil (RSPO)-certified. Sipef said the acquisition from PT Agro Investama Gemilang (AIG), part of the Indonesian real estate development group Lippo, was expected to contribute to the firm’s expansion the Musi Rawas area.

“This is Parliament’s first resolution on this issue and it is up to the Commission how it acts upon it. But we cannot ignore the problem of deforestation, which threatens the Global Agreement on Climate Change and UN Sustainable Development Goals,” she added. During the voting, the MEPs noted that various voluntary certification schemes, such as the Roundtable on Sustainable Palm Oil (RSPO), promote sustainable cultivation of palm oil, but claimed that their standards were open to criticism and confusing for consumers. They called for the European Commission to install a single certification scheme that would guarantee that only sustainably produced palm oil entered the European marketplace, along

with introducing sustainability criteria for palm oil and products containing palm oil. MEPs noted that 46% of the palm oil imported to the EU was used to produce biofuels, and called for a phase-out of deforestation-contributing vegetable oils in biofuels by 2020. Additionally, the MEPs stated that a “large part” of the global palm oil industry was violating “fundamental human rights and adequate social standards” by using child labour and driving conflicts between local groups and palm oil concession holders. The report previously passed a vote at the EU Committee on the Environment, Public Health and Food Safety on 11 March.

Deadline set for Malaysian palm oil sustainability compliance

il palm plantation companies already certified by the Roundtable on Sustainable Palm Oil (RSPO) will have to comply with Malaysia’s own Malaysian Sustainable Palm Oil (MSPO) scheme by 31 December 2018. Plantation Industries and Commodities Minister Datuk Seri Mah Siew Keong set out the deadline on 22 February. He said compliance with the scheme would be implemented in stages. Along with the 31 December 2018 deadline for plantation players that were already RSPO-certified, those without RSPO certification would need to comply by 30 June 2019 and all smallholders by 31 December 2019. “We will be getting the financial incentives ready by

June to help the industry for certification,” Bernama news agency reported him saying. The MSPO scheme was launched at the PIPOC International Palm Oil 2013 Conference with an original implementation date of January 2015. It was developed as an alternative to certification schemes at the time and sets out auditable standards on sustainability principles, criteria and indicators for independent smallholders, plantations and organised smallholders, and palm oil mills. The MSPO scheme contains principles covering management commitment and responsibility; transparency; compliance with legal requirements; environment,

natural resources, biodiversity and ecosystem; best practices; and development of new plantings. “The inclusion of smallholders in the MSPO standard is especially significant because smallholders contribute up to 40% of the total area under oil palm in Malaysia,” MSPO said. Malaysia is the second largest producer of palm oil after Indonesia, with the two countries accounting for 80% of global production. World palm oil production is projected to rise 11% to 65M tonnes this year from 58.3M tonnes a year ago, thanks to good weather and ample rains. Malaysia is expected to produce around 20M tonnes of crude palm oil (CPO) this year.

Sime Darby announces restructuring and spin-off plans

ime Darby – one of the largest palm oil producers in the world – will be restructuring before spinning off of its plantations and property businesses. In an announcement on 27 February, the Malaysian conglomerate said it planned to list two independent companies on the Malaysian stock exchange – Sime Darby Plantation Sdn Bhd (Sime Darby Plantation) and Sime Darby Property Berhad (Sime Darby Property). Its industrial, motors, logistics and healthcare divisions would remain under Sime Darby Berhad (SDB). SDB will not own any stake in Sime Darby Plantation or Sime Darby Property. In the statement, Sime Darby

said its restructuring would include the group’s borrowings, transfer of certain assets – including land – within the group, and capitalisation of intercompany loans. The proposed listing of Sime Darby Plantation and Sime Darby Property could be implemented together or at different times. Sime Darby is one of the largest companies on the Bursa Malaysia stock exchange with a market capitalisation of RM63bn (US$14bn) as at 24 February 2017. It has operations in plantations, industrial equipment, motors, property and logistics, with plantations being its largest revenue generator. Its oil palm cultivation,

harvesting and milling operations are spread across more than 600,000ha of planted areas in Malaysia, Indonesia, Liberia, Papua New Guinea and Solomon Islands, while its land bank currently stands at one million hectares across the five countries. It produces around 2.4M tonnes/year or 4% of the world’s crude palm oil (CPO) output, of which about 97% or 2.2M tonnes are Certified Sustainable Palm Oil (CSPO). Its annual output of palm kernel is about 0.57M tonnes, out of which 0.56M tonnes are Certified Sustainable Palm Kernel (CSPK). Sime Darby produces oils and fats, oleochemicals, biodiesel, other palm oil derivatives.

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P O C 2 017 SHOW REVIEW

Palm oil output to climb World palm oil production is forecast to rise by around 6M tonnes this year as palm trees recover from the drought effects of El Niño last year. The big question is whether another El Niño will develop from June and what effects it will have on the global oils and fats market, delegates at the recent Palm & Laurice Oils Price Outlook Conference (POC 2017) heard in Malaysia

lobal palm oil production is expected to climb by around 6M tonnes this year as oil palm trees recover from the adverse drought effects of the El Niño weather pattern, according to several experts speaking at the Palm & Lauric Oils Price Outlook Conference & Exhibition (POC 2017) in Malaysia on 6-8 March 2017. Good weather was also aiding output in Indonesia and Malaysia – the world’s top two palm oil producers, said Thomas Mielke, executive director at Oil World. Indonesia’s production was expected to reach 35M tonnes in 2017 from 32.1M tonnes recorded in 2016, while Malaysia’s output would increase to 19.85M tonnes from 17.32M tonnes a year ago. “However, replenishment of vegetable oil stocks will take time and will not be possible in 2016/2017 as we need a better year of good weather and high production,” he said. On prices, Mielke said palm oil prices had peaked at RM3,300 (US$747)/tonne in the first quarter of this year but would stay below soyabean oil prices for the rest of 2017. He also forecast the crude palm oil (CPO) prices falling to RM2,400 (US$543)/tonne by 2018. M R Chandran, senior independent dirrector

JAMES FRY OF LMC INTERNATIONAL SAYS PALM OIL PRODUCTION HAS SEEN A SURGE FOLLOWING EL NIÑO LAST YEAR

of IJM Plantations, forecast an 11% rise in global palm oil production to 65M tonnes this year against 58.3M tonnes a year ago. “Normally February and March are dry months but there have been very good rains,” he said. Rising production and slowing demand from top importers was expected to keep a lid on prices. While top importer India was expected to produce a near record domestic oilseed crop, which would keep its edible oil imports flat in the year to October.

would be so similar.” He forecast Malaysian palm oil production at 19.9M tonnes, with global production growth of over 6M tonnes. Fry concluded that CPO prices at the end of this year would be similar to the level traded for most of 2014 and 2015, with FOB CPO in the third quarter averaging US$605/tonne and Bursa Malaysia Derivatives (BMD) at RM2,500 (US$566).

Identical El Niño weather pattern

Godrej International director Dorab Mistry pegged palm oil production this year at 19.5M tonnes for Malaysia and 33.5-34M tonnes in Indonesia against 17.32M tonnes and 30M tonnes respectively in 2016. “Production recovery in Malaysia has started already. We turned the corner in December 2016 when that month’s production exceeded December 2015’s production. Year-on-year, December 2016 was up 5%, January 2017 was up 12% and February 2017 up 15%.” Malaysian stocks would remain tight until July 2017 with Ramadan shipments going out in the first half of May. “Palm stocks will begin to recover from July 2017 and palm will face strong competition in India from South American soyabean oil.” The big question was whether a new El Niño would develop from June. Mistry also drew attention to oil palm cultivation in Central and South America as areas to be watched, with production up from 2.2M tonnes in 2011 to 3.2M tonnes in 2016 and exports doubling to 1.8M tonnes in five years.

LMC International chairman James Fry noted that Malaysian palm oil production was following an almost identical pattern to the last big El Niño in 1997/98, where output saw huge growth a year following the phenomenon. He said the pattern of seeing a surge in production post-El Niño was also present in other countries including Thailand and Indonesia. “Looking at the year-on-year changes in Malaysian production for the El Niño in 2015 and 2016, the recovery pattern that we are seeing has also been very similar to what we had way back 20 years ago. “If we follow the same growth rate and if history repeats itself exactly, Malaysia’s monthly production will be more than 2M tonnes for six months this year,” he said. If this happened, Malaysia would end up with 22.26M tonnes of production this year, nearly 5M tonnes above the 2016 figure of 17.32M tonnes. “I don’t believe this will happen, but I also did not expect that the pattern that we are seeing

Palm oil production recovery

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P OC 2 017 SHOW REVIEW

Covering other vegetable oils, Mistry said there had been a big rise in sunflower oil production, with three record sunflower seed harvests in the CIS and Black Sea sunflower oil becoming very competitive and taking market share. More sunflower oil had helped to keep prices in check in 2016, especially in India. On rapeseed, he said EU production could improve by 2M tonnes but it was too early to forecast. “India’s bumper rape-mustard crop is 7M tonnes – that will reduce the scope for blending soya oil into mustard oil.”

Soyabean oil In 2015 and 2016, soyabean oil picked up a huge market share in edible oil markets such as India “The main reason was that soya oil is usually exported as a crude unrefined oil whereas palm is usually exported as a refined oil,” Mistry said. “Local refiners prefer to import a crude unrefined oil so they can run their refineries and also add value.” Mistry said the market has had six back-to-back bumper harvests in soyabeans. “Will the seventh harvest in USA also be as lucky?” US farmers were expected to increase soya acreage this year and expansion in Brazil and Argentina would continue. Export taxes in Argentina would decline from January 2018. The world outlook for soyabean oil would depend on the US biodiesel regime for 2017. “A producer credit instead of a blender credit is a game changer for soya oil futures.We need to know the exact fine print of thehave new US policy.”

TABLE 1: INCREMENTAL EDIBLE OIL SUPPLY (‘000 TONNES) 2015/16

2016/17

Soyabean oil

+3,000

+2,500

Rapeseed oil

–1,000

–1,500

Palm oil

–6,000

+6,000

Others

–1,400

+2,000

Total supply

–5,400

+9,000

Total demand

+5,000

+6,000

Source: Dorab Mistry, POC 2017

TABLE 2: INDIAN IMPORTS OF EDIBLE OILS (‘000 TONNES) 2012/13

2015/16

2016/17

Soyabean oi

1,090

4,235

3,500

Palm oil

8,240

8,510

8,650

980

1,516

1,750

10,670

14,738

14,300

Sunflower oil Total Source: Dorab Mistry, POC 2017

FIGURE 1: WORLD PRODUCTION OF 17 OILS ND FATS

Food and energy demand to grow Mistry said world demand for edible oils was expected to grow 3M tonnes in 2016/17 against 2.5M tonnes in 2015/16 (see Table 1, right). World energy demand for vegetable oils could also rise by 3M tonnes in 2016/17, depending on the US biodiesel regime and Indonesian policies. This would be slightly up on the 2.5M tonnes increase in 2015/16.

Price outlook Mistry outlined three possible scenarios for crude palm oil (CPO) prices this year, favouring a scenario of around RM3,000 (US$680)/tonne until fourth quarter 2017. This, he said, was based on his “bullish scenario” due to the impact of weather conditions and the possibility of another El Niño developing in Southeast Asia by June. Mistry’s first “normal scenario” was based on supply and demand “Stocks are still very tight, the inverse has been eroded and palm has once again become competitive,” he said. “In fact I am optimistic that prices will again go up to RM3,000 (US$680) and after June, possibly July, it may go all the way down to RM2,500 (US$566).” The assumptions were made with the expectation that Brent crude oil would be between US$45 and US$65 a barrel, there would be three rate hikes by the US Federal Reserve, and that currencies of the

Source: Thomas Mielke, Oil World, POC 2017

FIGURE 2: MONTHLY PRICES OF FOUR OILS (US$/TONNE)

Source: Thomas Mielke, Oil World, POC 2017

developing countries would stabilise. On his alternative preferred “bullish scenario”, he noted that climate was becoming increasingly uncertain. “What if the recovery in palm oil production gets postponed? What if Malaysia produces only 18.7M

tonnes and Indonesia only 33M tonnes? “In this case, CPO will hold at RM3,000 (US$680) until September, dip for a few months and then take off again,” Mistry said. His third scenario related to the US government encouraging repatriation of profits held overseas by its companies. “The Donald Trump administration is toying with the idea of giving an advantageous 10% tax incentive to repatriate and bring this money back to the US. “There is about US$2tr of untapped US company profits lying outside the country. “If this policy is announced, it is almost certain that US corporations will take advantage of it and bring their money back,” he said. Such a tremendous drain of liquidity from emerging countries, he said, could push some countries into recession apart from being extremely bearish for all commodity prices. “At this stage my feeling is to go with the bullish scenario. I feel that the impact of weather is so important, and I expect palm oil prices to remain in the region of RM3,000 (US$680) for the next six to eight months,” he said. w

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D I ARY OF EVENTS

30 APRIL - 3 MAY 2017 108th AOCS Annual Meeting VENUE: Rosen Shingle Creek, Orlando Florida, USA CONTACT: AOCS Meetings Department, USA Tel: +1 217 6934821 Fax: +1 217 6934865 E-mail: meetings@aocs.org Website: www.annualmeeting.aocs.org

11-12 MAY 2017 OTAI-FSSAI Conference: 1st Summit on Compliance Across Food Value Chain VENUE: Taj Palace, New Delhi, India CONTACT: Ajay Singh, coordinator Tel: +91 9811 1133 85 E-mail: ajay@otaiconference.com Website: www.otaiconference.com

19-20 MAY 2017 OFI India 2017 VENUE: Bombay Convention and Exhibition Centre (BCEC), Mumbai, India CONTACT: Mark Winthrop-Wallace, sales manager, OFI, UK Tel: +44 1737 855 114 E-mail: markww@quartzltd.com Website: www.ofievents.com/india

18-23 JUNE 2017 FOSFA Middle Managers Course VENUE: Royal Holloway, University of London, UK CONTACT: FOSFA International, UK. Tel: +44 207 374 2346; E-mail: amy.morrell@fosfa.org Website: http://www.fosfa.org/events/ middle-managers-course/

2-5 JULY 2017 8th European Symposium on Plant Lipids VENUE: Scandic Hotel Triangeln Malmö, Sweden CONTACT: Eurofedlipid, Germany Tel: +49 69 7917 345 Fax: +49 69 7917 564 E-mail: amoneit@eurofedlipid.org Website: www.eurofedlipid.org/meetings/ malmoe2017/index.php

11 JULY 2017 23rd MPOB Transfer of Technology Seminar and Exhibition 2017 VENUE: Malaysian Palm Oil Board (MPOB) Head Office, Bangi, Selangor, Malaysia CONTACT: Rubaah Masri, MPOB, Malaysia Tel: +60 3 87694567 E-mail: rubaah@mpob.gov.my Website: www.mpob.gov.my/en/events/ conferences-seminars/28233-23rd-mpobtransfer-of-technology-seminar-2017-11july-2017

27-30 AUGUST 2017 15th Eurofedlipid Congress VENUE: Uppsala Konsert & Kongress Uppsala, Sweden CONTACT: Eurofedlipid, Germany Tel: +49 69 79 17 533 Fax: +49 69 79 17-564 E-mail: info@eurofedlipid.org Website: www.eurofedlipid.org/meetings/ uppsala2017/index.php

3-8 SEPTEMBER 2017 FOSFA Basic Introductory Course VENUE: Royal Holloway, University of London, UK CONTACT: FOSFA International, UK Tel: +44 207 374 2346 E-mail: amy.morrell@fosfa.org Website: http://www.fosfa.org/events/ basic-introductory-course/

11-14 SEPTEMBER 2017 17th AOCS Latin American Congress and Exhibition on Fats and Oils VENUE: Grand Fiesta Americana Coral Beach Hotel, Cancun, Mexico CONTACT: AOCS Meetings Department, USA Tel: +1 217 6934821 Fax: +1 217 6934865 E-mail: meetings@aocs.org Website: http://annualmeeting.aocs.org

12-14 SEPTEMBER 2017 oils+fats International Trade Fair for Technology and Innovations VENUE: Messe München, Munich, Germany CONTACT: Messe München, Germany Tel: +49 89 94911328 E-mail: info@oils-and-fats.com Website: www.oils-and-fats.com/index-2.html

22-23 SEPTEMBER 2017 1st Indian Surfactants Conference VENUE: Mumbai, India CONTACT: ICIS, UK. Inara Mironova, senior conference producer, ICIS, UK Tel: +44 20 7911 3134 E-mail: inara.mironova@icis.com Website: www.icisconference.com/ indiansurfactants2017

3-5 OCTOBER 2017 PALMEX Indonesia VENUE: Santika Premiere Dyandra Hotel & Convention, North Sumatra, Indonesia CONTACT: PT Fireworks Indonesia Tel: +62 21 26051028 E-mail: info@asiafireworks.com Website: www.palmoilexpo.com

31 OCTOBER 2017 FOSFA Annual Dinner VENUE: Hilton Antwerp Old Town, Belgium CONTACT: FOSFA International, UK Tel: +44 (0)207 374 2346 E-mail: gemma.hale@fosfa.org Website: http://www.fosfa.org/

23-27 OCTOBER 2017 National Renderers Association 84th Annual Convention VENUE: Ritz-Carlton, San Juan, Puerto Rico CONTACT: Marty Covert, National Renderers Association, USA Tel: +1 703 683 0155 E-mail: co@martycovert.com Website: www.nationalrenderers.org/events/ calendar

30-31 OCTOBER 2017 9th International Symposium on Deep-Fat Frying VENUE: Shanghai, China CONTACT: Chinese Cereals and Oils Association (CCOA) Tel: +86 10 68357511 Fax: +86 10 68357511 E-mail: wcf@ccoaonline.com Website: www.eurofedlipid.org/meetings/ shanghai2017/index.php

1-3 NOVEMBER 2017 12th Indonesian Palm Oil Conference (IPOC) and 2017 Price Outlook VENUE: The Westin Resort Nusa Dua, Bali, Indonesia CONTACT: IPOC Secretatiat, Indonesia Tel: +62 21 57943852 E-mail: info@gapkiconference.org Website: www.gapkiconference.org

17-18 NOVEMBER 2017 PORAM Annual Forum, Dinner, Golf Challenge VENUE: One World Hotel, Kuala Lumpur, Malaysia CONTACT: The Palm Oil Refiners Association of Malaysia (PORAM) Tel: +603 7492 0006 E-mail: info@poram.org.my Website: www.poram.org.my/p/

14-16 NOVEMBER 2017 PIPOC 2017 VENUE: Kuala Lumpur Convention Centre, Kuala Lumpur, Malaysia CONTACT: Malaysian Palm Oil Board (MPOB) E-mail: pipoc2017@mpob.gov.my Website: www.pipoc.mpob.gov.my

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7Principles

MALAYSIAN SUSTAINABLE PALM OIL

Principle 1

Management commitment and responsibility

Principle 4 Compliance to legal requirements

Principle 5

Environment, natural resources, biodiversity and ecosystem services

Principle 7

Development of new plantings

Principle 2 Transparency

Principle 3

Social responsibility, health, safety and employment conditions

4 6

Principle 6 Best practices

MSPO Certification Scheme is the national scheme in Malaysia for oil palm plantations, and organised (Scheme) and independent smallholdings, and palm oil processing facilities to be certified against the requirements of the MSPO Standards. MSPO Certification Scheme allows for oil palm management certification and supply chain certification, and provides for:

Development of certification standards & scheme documents

Accreditation requirements & notification of certification bodies

Application by potential clients for certification audits

Peer reviewing of audit reports

Issuance of logo usage licenses

Procedures for handling of complaints

Supply chain traceability requirements

Training and briefing to auditors & other stakeholders

MALAYSIAN PALM OIL CERTIFICATION COUNCIL

15th Floor, Bangunan Getah Asli (Menara),148, Jalan Ampang, 50450 Kuala Lumpur, Malaysia tel +603 2181 0192 | fax +603 2181 0167 | info@mpocc.org.my | www.mpocc.org.my

PAL M O I L – SOUTH AMERICA

Colombia: growing palm oil With 7.5M ha available for growing oil palm, Colombia, which ranks fourth in global production of palm oil, has huge potential to contribute to world stocks. Charlotte Niemiec examines how the country must first address its stagnating biofuel blend mandate and accusations of land-grabbing and implement a robust certification scheme if it is to achieve its goals

oday producing more than 500,000 tonnes of palm oil and palm kernel oil (PKO) on over 150,000ha of land, Colombia is the largest producer of the crop in Latin America and the fourth largest in the world, after Indonesia, Malaysia and Nigeria. According to the industry’s trade association, the National Federation of Oil Palm Growers (Fedepalma), the oil palm tree was introduced to the country in 1932. Extensive cultivation and production dates from 1945, with commercial growing beginning in the 1950s under a government scheme to encourage oil-bearing crops. During the 1980s, planted area tripled and PO became an important crop for the country’s economy. Last year, the Ministry of Agriculture announced it would seek to increase planted area by 150,000ha to reach 8M ha in the next three years and investing almost US$480M into the project. Colombia’s primarily tropical climate is ideal for growing oil palm. Plantations are found across the country, with 55 production units grouped around oil extraction plants. It is the country’s most popular oil, accounting for almost 90% of the production of Colombia’s oils and fats and for around 60% of oil consumption, used widely in snack foods, cosmetic/ personal care products and as a biodiesel.

without acknowledging the claims levelled at the industry of land displacement and “greenwashing” by environmental authorities, NGOs and local actors. A 2012 report by Oxfam Novib, an NGO based in the Netherlands, titled ‘Responsibility and Sustainability of the Palm Oil Industry: Are the Principles and Criteria of the RSPO Feasible in Colombia’ notes that, in Colombia – as in all palm oil-producing countries – oil palm cultivation is associated with environmental problems, land and territorial issues and labour rights. These problems are aggravated in Colombia as a consequence of internal armed conflict and its high level of violence. Today, the report says, violence associated with land occupation is linked with the cultivation of sugarcane and oil palm for the production, most particularly, of biofuel. Colombia’s great advantage when it comes to growing oil palm, according to Fedepalma, is that there is land available to do so. While the Oxfam report largely agrees, stating that plantations are not directly associated with the clearing of rainforest in Colombia as they are in Malaysia or Indonesia, it notes that plantations have still affected primary forest in some areas. Furthermore, “many oil palm expansion projects are proposed or planned for systems of special environmental relevance,” the report says.

The link between land and oil

A stagnating biofuel blend mandate

Despite its potential, no consideration of Colombia’s palm oil industry would be complete

In addition to its use as an edible oil, Colombia earmarks palm oil for biodiesel. The country’s

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PAL M O IL – SOUTH AMERICA

COLOMBIA IS THE LARGEST PALM OIL PRODUCER IN LATIN AMERICA AND THE FOURTH LARGEST IN THE WORLD (PHOTO: ADOBE STOCK)

potential export and tourism board, ProColombia, notes that Colombia produced 513,000 tonnes of biodiesel in 2015 (see Table 1). Since the early 2000s, production has been underpinned by government support. It has drawn up national development plans providing for direct and indirect investments aimed at promoting ethanol and biodiesel. It passed legislation for ethanol and biodiesel blend mandates in 2001 and 2004, respectively, which today stand at B8 or B10, depending on the region. The government provides incentives for continuous production: biofuel production facilities receive a special tax designation as an industrial free trade zone and, therefore, pay no taxes on revenues. Biofuel sales are also excluded from paying a 16% VAT, and ethanol sales are exempt from regional taxes, even though biodiesel sales are levied a tax of US$0.15/gallon. However, according to a United States Department of Agriculture (USDA) Global Agricultural Information Network (GAIN) report published in December 2016, the biofuel mandates remain unchanged, resulting in little incentive to increase production or consumption. The report says this “lack of clarity” from the government on maintaining or adjusting the mandate has “created concern in the biofuels industry.”

Potential for palm oil-based biodiesel Palm oil-based biodiesel production capacity remains at 590M litres/year which, the report says, is slightly below (at a 7.9% average) the

level necessary to meet the mandates. But, the report notes: “The expansion of palm area planted and palm oil production in Colombia shows the potential for an increase in palm oil-based biodiesel production.” ProColombia says the country has the land available – around 7.5M ha are suitable for growing biofuel-producing crops, a figure five times higher than that of Malaysia. Production is also set to increase. The National Biofuels Federation of Colombia (Fedebiocombustibles) says two new facilities are due to come online this year, adding 110M litres/ year to domestic capacity and increasing biodiesel production to 700M litres/year. Currently, the federation says, there are eight biodiesel plants using palm oil as the primary feedstock, six of which produce around 95% of total production (see Figure 1 and Table 2 on the following page). While Colombia exports over 33% of its palm oil – primarily to the European Union (EU) – it does not export its biodiesel. Nevertheless, plans to do so are being promoted on the back of increasing production. An incentive for the government to invest further in the biofuel industry is the growing demand from the EU, which has set a target of 10% biofuels by 2020. The snag, however, is that both the raw material and the resulting biofuel must be certified to qualify in the EU. Furthermore, while tax breaks and subsidies are helpful for biodiesel producers, they are often the opposite for smallholders, the Oxfam report argues. While the government promotes the cultivation of oil palm to produce biofuel, it fails to invest in small producers, except when they become involved in producing oil palm. Because of this, the report says, “if they want to be granted land and subsidies … smallholders are faced with the difficulty of continuing with their traditional crops and maintaining their autonomy”, or switching to oil palm.

permit dialogue between palm oil companies, policy makers and civil society. In the opinion of foreign observers, the two sides simply do not speak the same language and there are no actors to help build bridges and trust.” Aiming to change this, the industry is spearheaded by Fedepalma. Its mission is to represent growers’ interests, promote palm oil initiatives and liaise with the government on setting policies to further the expansion of the industry. In addition, it leads work with organisations domestically and abroad, promotes training and alliances along the supply chain and maintains relations with counterpart organisations and research agencies in other countries on the crop and its oil. In 1990, Fedepalma established a research centre called Cenipalma. Its focus was to look for solutions to technological problems affecting producers and to offer permanent technical assistance in updating crop management and procedures of palm oil mills. It has since launched programmes on oil palm diseases, management of pests and pollinators, and the physiology and nutrition of the crop. It researches topics such as irrigation, production of varieties adapted to Colombian conditions, the productivity of oil extraction processes and its byproducts, the reduction of environmental impact and research on the health benefits of palm oil.

Solid certification required One proposed “solution” to the problem of land displacement is to demand certification, which is gradually increasing in the region. While there are no figures for Colombia specifically, a Roundtable on Sustainable Palm Oil (RSPO) impact report notes that the number of certified growers in Latin America has risen from five to 11 in the past two years, while 20 additional mills have been certified. Certified sustainable palm oil (CSPO) has increased from 270,000 tonnes in January 2015 to 645,080 tonnes at June 2016, representing 19% of the total regional output, putting Latin America on a par with worldwide certification levels. RSPO certification guarantees that palm oil has not come from recently deforested land and that plantation workers are treated fairly. But, in a report prepared for the Initiative for Conservation in the Andean Amazon, Juan Luis Dammert argues that even certification is not a v

Creating a dialogue One stumbling block to increasing levels of production in Colombia is a lack of dialogue across the supply chain. Oxfam notes: “State actors involved in palm sector problems (be it environment, labour or land and territorial rights) have limited impact on the definition of policies. There are no spaces that

TABLE 1: BIODIESEL USE IN COLOMBIA (MILLION LITRES) Production Imports Total Supply Diesel production

2011

2012

2013

2014

2015

503

557

572

589

583

503

557

572

589

583

6,547

6,745

6,879

7,056

7,389

Estimated biodiesel required – B8

524

540

550

564

591

Estimated biodiesel required – B10

655

675

688

706

739

Source: Fedebiocombustibles, MME

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PAL M O I L – SOUTH AMERICA

v perfect system for Colombia. The scheme only protects certain forests and accusations remain that certified companies violate the standard, he argues. Dammert says: “Cases of greenwash are seen too often [with the RSPO]. It is by no means a sufficient mechanism. If it doesn’t come in addition to strong national policies and the mobilisation of organised social actors, it guarantees nothing.” Another issue is traceability. Colombia does not have a centralised system that allows information to be obtained on oil palm-growing companies, the groups to which they belong and their shareholders, the Oxfam report states. It advises that the RSPO principles and criteria should be revised to take account of “the Colombian context” and recommends intensive and ongoing national and international monitoring of the consultation process and also of subsequent certification phases. It proposes creating an observing body composed of Colombian organisations representing stakeholders, who would work closely with the RSPO at an international level. Finally, certification is not always an option for smallholders, who would often pay a higher price per hectare than larger plantations. For Colombian growers, the choice is to invest in pricey certification or join a Strategic Production Alliance (APE). The APE system, which was adopted by the Ministry of Agriculture towards the end of the 1990s, plays an important role, as 30% of planted land is included in APEs, according to Fedepalma. Small producers with at least 5-10ha of land sign contracts with operators and intermediaries (companies), which guarantee purchase of their output for periods of 20 years or more. In return, companies back small producers by obtaining or providing incentives for planting oil palm, such as offering technical assistance and seeds. e Charlotte Niemiec is a freelance journalist

FIGURE 1: BIODIESEL PLANTS AND BLEND MANDATES IN COLOMBIA

Source: Fedebiocombustibles

TABLE 2: BIODIESEL PRODUCTION IN COLOMBIA INCLUDING PRODUCTION CAPACITY AND MARKET PENETRATION (MILLION LITRES) Calendar year Beginning stocks Production Imports Exports

2008

2009

2010

2011

2012

2013

2014

2015

2016

*2017

185

384

503

557

572

589

583

580

680

Consumption

180

385

502

556

575

584

585

581

680

Ending stocks

Production Capacity (million litres) No. of biorefineries Nameplate capacity

1 68

204

525

553

590

700

38%

90.8%

73.1%

95.9%

94.3%

96.9%

99.8%

98.8%

98.3%

97%

163

337

443

450

505

510

595

180

385

502

536

575

584

585

581

630

Diesel, on-road use

5,662

5,909

6,084

6,547

6,745

6,879

7,056

7,389

7,626

7,860

Biodiesel blend rate

0.5%

3.0%

6.3%

7.7%

8.2%

8.4%

8.3%

7.9%

7.6%

8.7%

Capacity use

Feedstock Use for Fuel (‘000 tonnes) Palm oil use for fuel

Market Penetration (million litres) Biodiesel, on-road use

Source: United States Department of Agriculture GAIN report, *estimate

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PROCESSING

3-MCPD and GE: a new challenge Certain processing techniques are now known to cause the occurrence of 3-MCPD, 2-MCPD and GE in edible oils and various strategies are being adopted to minimise their formation within the bleaching and deodorising process. Dr Marc Kellens and Dr Wim De Greyt write

he growing attention on the nutritional quality of food oils is one of the main drivers for new developments in the edible oil refining industry. Over the years, the refining process has continuously been improved to assure the production of high quality food oils with no or very low levels of contaminants (pesticides, polycyclic aromatic hydrocarbons, dioxins and PCB, for example) and minimum amounts of trans fatty acids (TFA). The production of low trans food fats was a big challenge for the oil processing industry as it required both a change of technology (from partial hydrogenation to interesterification and dry fractionation) and feedstock (from soft oils to palm oil fractions). The occurrence of esters of 3-monochloropropane diol (3-MCPD) and 2-monochloropropane diol (2MCPD) and glycidyl esters (GE) in food oils was first reported in the mid-2000s. Soon after, in 2007, the German Federal Institute for Risk Assessment (BfR) concluded that the oil processing industry had to search for alternative process techniques to reduce formation of these harmful process contaminants during oil refining. This call was taken seriously and initiated a lot of research projects in the academic world and the oils and fats industry. As a result, the mechanism of formation and toxicity for humans of 3-MCPD and GE is now better understood and critical refining stages are known. Validated analytical methods are also available and widely used for process control. In May 2016, the European Food Safety Authority (EFSA) published its long expected scientific opinion on the risks for human health related to the presence of 3-MCPD/2-MCPD esters and GE in food. The report concludes that 3-MCPD esters and GE have the same toxicological profile as free 3-MCPD and glycidol and are therefore a potential health concern. GE are considered more harmful since some in vivo studies indicate that glycidol is a genotoxic compound. Not enough toxicological data is available to conclude about the toxicity of 2-MCPD. Based on the available toxicological data, EFSA derived a tolerable daily intake (TDI) for 3-MCPD of 0.8 μg/kg body weight. This value is

considerably lower than the earlier set TDI of 2.0 μg/kg body weight. The lower TDI value comes from a more conservative interpretation of the available toxicological data (lower uncertainty factor) and ensures a higher level of protection for consumers. No TDI is set for GE. Due to its genotoxic carcinogenic nature, its concentration in foods has to be minimised to the lowest achievable level. Dietary surveys of different EU countries show that the mean exposure to 3-MCPD and GE is highest for younger groups of the population (infants, toddlers and young children). Health risk is highest for infants that only consume industrial infant formula, as their daily intake of 3-MCPD may be three times higher than the TDI. EFSA therefore highly recommends a significant reduction of 3-MCPD/GE in food products for infants. Evaluation of the analytical data on the occurrence of 3-MCPD/GE in foods collected between 2009 and 2015 in 23 EU countries showed that food oils contributed most to the daily intake of these harmful contaminants. Mean 3-MCPD and GE values are highest in refined palm oil (fractions) and are five to 10 times higher than the mean values found in most other refined food oils (see Table 1, below). The data clearly shows that 3-MCPD/GE are mainly a challenge for palm oil processors and much less for refiners of other vegetable oils, who in their turn have to deal with TFA.

Formation of 3-MCPD and GE In the past, edible oil processors have already implemented effective mitigation technologies. This has resulted in a substantial reduction of 3-MCPD and GE in refined food oils. From 2010 to 2015, levels of 3-MCPD and GE in refined palm oil decreased by 30% and 50% respectively. However, this reduction is still not enough. Members of FEDIOL, the federation representing the European vegetable oil industry, committed to reduce GE content to a maximum of 1ppm in all refined oil by September 2017. This is an ambitious goal, especially for palm oil, knowing that the average GE content in refined palm oil in 2015 was still around 4ppm. FEDIOL members also committed

to continue reducing levels of 3-MCPD esters, but a concrete target value has not been set yet. In anticipation of eventual formal regulatory limits, producers of infant formula will impose very low levels of 3-MCPD (<1ppm) and GE (<0.5ppm) in food oils from 2018 onwards.

Mitigation strategies 3-MCPD esters and GE have different chemical and physical characteristics and do not have the same mechanism of formation. Hence, different mitigation strategies are required to achieve required low levels in refined food oils (see Table 2, right). GE are mainly formed from diglycerides at high temperature (>230°C). This explains the high GE content in standard refined palm oil, as this oil typically has a high diacylglycerol (DAG) content (6-8%) and is deodorised at high temperature (260°C) for a longer time (approximately one hour). The same is true for TFA. Formation of GE can be minimised by reducing the heat load during deodorisation. In practice, deodorisation is best done at temperatures <240°C. A higher temperature (e.g. 250°C) for desired heat bleaching and more efficient FFA stripping is acceptable provided that the residence time is kept short. Dual temperature deodorisation (with a short residence time at a higher temperature followed by a longer residence time at a lower temperature) is industrially proven and implemented as mitigation technology to achieve a minimum amount of GE in the refined oil. GE can also be removed from (refined) food oils. They have a similar volatility as monoglycerides (MAG) and can thus be stripped from the oil, but only at high temperature and deep vacuum (260°C and 1mbar). At a lower temperature and/or less deep vacuum, there will be more formation than stripping resulting in a net increase of the GE content in the refined oil. Hence, GE stripping requires quite extreme deodorising conditions, which will also result in the stripping of other volatile components such as MAG, tocopherols/ tocotrienols and phytosterols. This will not only give higher oil losses but may also have a negative effect on the oxidative stability of the refined oil. Another possibility to minimise GE formation is to reduce the DAG levels in palm oil. One interesting route to achieve this goal (2-3% DAG) is by enzymatic esterification of the FFA on the DAG TABLE 1: MEAN CONCENTRATION OF 2-MCPD, 3-MCPD AND GLYCIDYL ESTERS IN REFINED FOOD OILS Mean concentration (ppm) Oil type

3-MCPD

2-MCPD

Soyabean Rapeseed Sunflower Palm

0.4 0.2 0.5 3

0.2 0.1 0.25 1.5

0.2 0.2 0.25 4

Objective 20171 20182

1 <0.5

set by FEDIOL; 2 set by producers of infant foods

Source: EFSA report, May 2016

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PAL M OIL – PROCESSING

Conclusion The recent EFSA report has put 3-MCPD/ GE on the agenda and brought an important new challenge to oil refiners. They will have to accelerate implementation of additional mitigation technologies to reduce 3-MCPD/GE levels further; especially in refined palm oil. With the active

TABLE 2: 3-MCPD ESTERS VS GLYCIDYL ESTER (GE) 3-MCPD ≠ Glycidyl Esters (GE) 3-MCPD

Glycidyl Esters (GE)

Toxicity

Carcinogenic (Non-genotoxic)

Carcinogenic (Genotoxic)

Precursors

Triglycerides, chlorine Acidic conditions

Diglycerides (DAG) Heat

Critical refining stage (for minimal formation)

Degumming, bleaching (starting at 140°C)

FFA stripping Deodorisation

Stability

Can only be degraded with strong Conversion to MAG with strong alkaline acid (ABE) Not volatile Volatile

Different mitigation strategies for 3-MCPD esters and Glycidyl Esters (GE) TABLE 3: CPO QUALITY AND ORIGIN HAS IMPACT ON 3-MCPD ESTER FORMATION CPO origin DOBI* FFA DAG Activated BE (HCl) Natural bleaching earth (%) (%) 3-MCPD (ppm) 3-MCPD (ppm) Central America

1.6

3.0

5.2

2.3

1.1

South America

2.3

4.6

7.2

7.5

1.6

South East Asia- 1

2.7

4.2

6.1

8.1

1.7

South East Asia- 2

3.1

3.8

5.2

9.7

2.1

South East Asia- 3

1.6

5.1

6.2

9.6

2.7

* deterioration of bleachability index

FIGURE 1: EFFECT OF RE-REFINING ON GE FORMATION 5 4.5

Glycidyl Esters (ppm)

in crude or bleached palm oil. This will not only give lower GE levels but will also increase the overall yield during refining. GE can also be degraded to MAG during postbleaching with (non-HCl) activated bleaching earth. This gives very low GE levels (<0.5ppm) provided that post-deodorisation is done at a low temperature (maximum 230°C), (see Figure 1, right). Oil processors generally do not like such double refining, but so far it is the only industrial proven refining process for the production of palm oil fractions with <0.5ppm GE. 3-MCPD esters can be formed by reaction of triglycerides (TAG) with chlorine (precursors at temperatures >140°C. Hence, removing the chlorine precursors and/or avoiding acidic conditions during the refining process are the most effective mitigation strategies. This is, however, easier said than done. First of all, it is very complex to determine the amount and nature of chlorine precursors in crude palm oil (CPO) and in practice the ‘potential’ of a CPO for 3-MCPD ester formation is not known. Applying the same refining process on different CPO (from various plantations) can give significantly different 3-MCPD levels which is quite frustrating for both the technology provider and the oil refiner (see Table 3, above). Thoroughly washing the fresh palm fruit bunches (FFB) before CPO production, as well as washing the CPO before storage and refining, seems to be the most efficient processes for the removal of chlorine precursors (see Figure 2, right). As 3-MCPD esters are already formed at quite low temperatures (140°C), it is not possible to control or minimise their formation during deodorisation. Bleaching is therefore the most critical refining stage for the mitigation of 3-MCPD esters. Selecting the proper grade of bleaching earth (natural or nonHCl activated) is very important. Physical refining of freshly washed CPO with use of natural bleaching earth can give 3-MCPD ester levels between 1-2ppm depending on the CPO quality and the efficiency of the washing process. Chemical refining has shown to be a good process for low 3-MCPD esters but good CPO quality is still required to get <1ppm 3-MCPD. Although there’s a growing demand for chemical refining lines for CPO, oil processors are still very reluctant to adopt chemical neutralisation on (high FFA) CPO as it gives high oil losses and a difficult to treat soapstock as a side stream. Current research focuses on the development of sustainable and economical mitigation technologies that consistently give RBD PO with 3-MCPD esters <1ppm. Chemical interesterification (CIE) is currently the only process that can remove/degrade 3-MCPD esters. CIE followed by post-bleaching with non-HCl activated bleaching earth (to degrade GE formed during CIE) and deodorisation at mild temperature (<220°C) is today the only industrial process that can give refined food oils with very low GE and 3-MCPD from standard quality (commodity) CPO.

RBD PO

4.6

0.5% SS,3 mbar,60 min.

3.5

Redeodorized 2.8 at 260 °C

3 2.5 2 1.5 1

0.5% ABE,110°C,30 min.

0.5 0

Post-bleached 1

0.1 2

Redeodorized at 230 °C 0.3 3

Sample number FIGURE 2: WASHING OF CPO – EFFECT ON ELEMENT CONTENT AND COLOUR Parameter CPO Washed CPO FFA (C16:0) %

3.67

3.53

P (ppm)

22.3

8.0

Fe (ppm)

20.3

2.68

Ca (ppm)

20.1

8.7

Mg (ppm)

12.3

1.7

K (ppm)

21.6

0.7

Na (ppm)

1.4

1.2

support of technology providers, it should be possible to properly address this issue and improve further the nutritional quality of food oils. It is difficult to predict how far the consequences of the EFSA’s recommendation to reduce 3-MCPD/ GE in food oils will reach out to the global food oil

LEFT TO RIGHT: CPO, WASHED CPO, WASH WATER

processing industry, but as with trans fat issues in the past, when it smoulders in Europe, it may start w a fire in the rest of the world. Dr. ir. Marc Kellens is global technical director and Dr. ir Wim De Greyt is R&D manager at Desmet Ballestra

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PAL M OI L – GENOME TECHNOLOGY

Breeding for sustainability PHOTO: UNDERVERSE/DOLLARPHOTOCLUB.COM

cells or tissues under sterile conditions. Through the method of micropropagation, high-quality plants can be cloned to quickly grow genetically identical replicas. Traditional forms of seed breeding are time consuming and it takes many years to produce improved planting materials. Genomics based technologies have sped up the process. A report in The Planter in December 2014 said such technologies are well-suited for oil palm and new, better planting materials are being produced quickly and more efficiently. The MPOB formed a strategic collaboration with Orion Genomics, a small USA-based genomics company, and together they have made three significant breakthroughs, all of which promise to transform and develop the palm oil industry for the better.

Palm oil genome sequenced A major breakthrough came in July 2013 when scientists from the MPOB announced through a report published in Nature journal that they had successfully sequenced the genome of the oil palm. According to a BBC report on the achievement, scientists used very advanced technology to decipher 1.8bn “letters” of DNA. Such a breakthrough creates the opportunity to better understand the role of each gene in the sequence and use such knowledge for marker assisted selection.

Through seed breeding and genome technology, scientists are forming a better understanding of the oil palm and are using their knowledge to make palm oil more productive and sustainable. Rose Hales writes

reducing costs at the source.

Improving productivity Genome technology seeks to change the traits of plants to produce desired characteristics. In contrast to genetic modification, genomics alters the DNA of plants without introducing any foreign DNA. Seed breeders create hybrids that amplify positive characteristics while reducing negative ones. Different types of the same plant are bred and a superior hybrid with features from both is formed. In addition, genome technology is used to sequence the genome of an organism. By decoding the DNA, scientists can pinpoint the specific genes that cause certain characteristics – some positive and some negative. Screening methods are developed to show whether a seed or plantlet carries a particular gene; this process allows breeders and growers to select only the most superior plants, which is called marker assisted selection. Finally researchers use tissue culture, a range of techniques used for maintaining or growing plant

Simultaneous to the genome sequencing, the MPOB and Orion Genomics made a second announcement in the Nature journal, publicising the discovery of the oil palm shell gene. The shell gene decides which of the three known shell forms the tree will produce: dura (thick), pisifera (shell-less) and tenera (thin). Tenera is a hybrid between dura and pisifera palms and contains two forms, or alleles, of shell genes, one shell gene is normal and the other is mutant. The consequence of this combination is 30% more oil/ land area than dura plants produce. Because it refers to the ideal shell-to-fruit ratio, scientists also refer to it as the ‘Goldilocks gene’. Before the discovery, growers had to rely on selective breeding techniques in an attempt to PHOTO: MPOB

ajor breakthroughs have recently been made in oil palm breeding and genome technology, which are set to boost productivity and improve sustainability. With the world’s population set to grow by 2.3bn to reach 9.1bn people by 2050, the agricultural industry must produce 70% more food in 2050 than it produced in 2015. The palm oil industry, therefore, needs to revolutionise to produce a greater quantity of food and limit further deforestation of important ecological areas. In her plenary lecture at PIPOC 2015, Datuk Dr Choo Yuen May – director general of the Malaysian Palm Oil Board (MPOB) – said that the palm oil industry needs to overcome the challenges of population growth, food demand, green technology demand, stagnant yields and steep competition from other crops such as soyabean. The MPOB has two major strategies for increasing productivity and revolutionising the industry. These are to enhance productivity upstream and enhance value downstream – this means making the growing and collecting process more productive while

The shell gene

THE DURA (LEFT) AND TENERA (RIGHT) GENE VARIETIES

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PAL M OI L – GENOME TECHNOLOGY

The VIR gene Orion and the MPOB’s second important discovery was reported in June 2014 and concerned the identification of the gene that triggers colour change in oil palm fruit – the VIR gene. The two most common types of oil palm are the virescens and the nigrescens varieties. The VIR gene is only found in the virescens palm and changes the colour of the fruit to bright orange when ripe. This is useful for palm fruit harvesters who can easily see the bright colour of the fruit from the ground and it gives a clear indication that the fruit is ripe. Ripe fruit contains the highest quantity and quality of oil. The fruits of the nigrescens type do not contain the VIR gene and turn only from black to dark purple when they are ripe, according to The Malaysian Star, which reported on the discovery in 2014. This subtle change makes it extremely hard for growers to tell if the fruit is at the peak of ripeness. Currently the virescens type is rarer than the

PHOTO: MPOB

maximise plantings of tenera plants. According to the MPOB and Orion, due to uncontrollable external pollination up to 10% of plants could be the low-yielding dura shell form, and it could take up to six years for growers to identify the low-yield trees by which time it was too late to uproot them. In addition to the discovery a simple molecular screen has been developed that can be used for both seeds and plantlets to scan for and reveal the undesired dura plants. These plants can be discovered early enough to remove them before they grow to maturity. With less dura plants being grown, the efficiency of oil palm plantations has increased and the sustainability of the industry boosted as more high-yield tenera plants will reduce competition between plantations and rainforests. MPOB and Orion say that this will have a “significant impact on the Malaysian economy, because for every 1% increase in palm oil yields, Malaysia gains RM1bn (US$230M) in income”.

EXAMPLES OF A NORMAL (TOP) AND MANTLED PALM FRUIT

nigrescens variety, which is much more prevalent across Malaysia and Indonesia. The MPOB and Orion say that this new knowledge of the VIR gene will allow palm growers to choose virescens over the nigrescens, as the benefits of the former are now much greater. Growers will find it easier to judge the ripeness of the fruit if they choose the virescens variety. In addition, the companies say that the shell gene and the VIR gene used in combination would enable seed breeders to develop new lines to further boost plant efficiency.

The mantle gene The final and, in many ways, the most significant discovery was made in September last year when Orion, MPOB and Cold Spring Harbor Laboratory announced they had found the epigenetic cause of mantling. This is a huge breakthrough that explains a previously unknown phenomenon that has caused millions of dollars of spoilage. In the 1980s, most palms in plantations were produced by cloning the highest-yielding plants in culture dishes, Phys.org reported. However, often these fine hybrid clones grew into barren adults

TABLE 1: THE PRIORITY TRAITS IN OIL PALM No

Trait

Current

Benchmark

High oil yield

3.70 tonnes/ha/year 9.00 tonnes/ha/year

Kulim Group

Ganoderma tolerance

70%

Kulim, AAR, UP, FELDA, Sime Darby, IOI, Borneo Samudera and Genting Green

High bunch index

0.40

0.60

FELDA

Low height/ compactness

45-75cm/year

30cm/year

FELDA

Long stalk

10-15cm

25cm

FELDA and AAR

Low lipase

22-73% of FFA level

Half of the current level (no takers yet from the industry) of FFA

High oleic acid

22-40%

65%

(no takers yet from the industry)

Large kernel

20%

FELDA

Vitamin E

660ppm

1,000-1,500ppm

FELDA

High carotene E.guineensis content 500ppm E.oleifera 1500ppm

E.guineensis 2000ppm E.oleifera 3000ppm

IJM, Sime Darby

90%

Source: The Planter, December 2014 (Mond Din et al. (2005))

Company

with misshapen and worthless fruits. The mutant form displayed by the plants was called ‘mantled’. According to Dr Choo at the MPOB, the mantling has “severely curtailed the ability of oil palm growers to take advantage of the significantly increased yield that cloned palms can have over palms produced from seed.” Previously there has been no way for growers to identify the mantled phenotype until too late, as young plants do not show signs of mantling until mature. Many oil palm cultivators, especially smaller growers, were unwilling to take the risk that their entire plantations could conceivably transpire to be only mantled plants. The MPOB and Orion’s study shows that mantled palms are genetically identical to their parents, however “the loss of DNA methylation in a specific region of an oil palm genome containing a transposable element called ‘Karma’ is responsible for the low-yielding mantled fruit”. DNA methylation is necessary for cells to develop normally and is essential for a number of key processes. Low methylation of Karma (dubbed ‘bad Karma’ by the scientists) disrupts the gene’s normal splicing, causing the mantled phenotype. In the reverse situation, dense methylation of Karma (‘good Karma’) causes palm clones to thrive in production fields. In revealing the discovery of the ‘bad Karma’ causing the mantled phenotype, Orion and the MPOB also say a simple, leaf-based test has been developed that can predict if the palm will be mantled. Crucially the test can provide a result before the palms are planted out and many years before physical signs of the phenotype would appear. In future only the high-performing clones will reach maturity, optimising land resources. This allows growers to propagate high-yield clones, which the companies say have the potential to produce 2030% more oil/planted area than palms grown from seedlings. The team was not able to say what causes the ‘bad Karma’, but identifying its presence and producing a test to reveal it will still transform the industry. The breakthrough was made possible owing to the MPOB’s vast collection of highly characterised clonal palms with a solid knowledge of palm oil and tissue culture, alongside Orion’s MethylScope technology, which can precisely map DNA methylation across entire genomes, the companies said.

Priority traits in oil palm Although improving oil yield is one of the main drivers of genome technology there are other desirable characteristics that seed breeders are working on making available. Table 1 (left) shows the priority traits in oil palm that were identified and prioritised by the MPOB through brainstorming sessions in 2001 and 2003, a report, in The Planter revealed in December 2014. According to the report, the 10 traits were then incorporated into a fast track breeding programme involving breeding activities and cloning via tissue culture. Seed breeders collaborated with the MPOB in pursuing the different traits. The companies responsible for pursuing each trait are also shown in Table 1. The Planter says that besides high fresh fruit bunches (FFB) and oil yield, the traits that are most popular are those that simplify harvesting – these include short height, virescens (an indicator v

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PAL M OI L – GENOME TECHNOLOGY

PHOTO: THUNGSARNPHOTO/DOLLARPHOTOCLUB.COM

v of ripeness), low lipase (for the slow build-up of free fatty acid after harvesting) and non-abscissing (no loose fruits). In order to improve breeding, the Malaysian industry needs to broaden the genetic base. According to The Planter article, the Asian palm oil industry is built on just four palms, and the genetic base needs to be widened. The MPOB began collecting oil palm germplasm and, in December 2014, it had the largest oil palm germplasm collection in the world. In the 2011 paper ‘Breeding for Sustainable Palm Oil’, Tristan Durand-Gasselin concludes that there are three traits, which, if changed, would improve sustainability. One of which is improving yield through bunch production and oil content. The second is vertical growth, which has been largely reduced. A shorter statured palm facilitates harvesting and also prolongs the palm’s lifespan by five to seven years as its replanting age is usually determined by its height. Durand-Gasselin says that this would allow growers to replant when the time is right economically rather than by necessity. The final important trait is disease resistance. Scientists are seeking to find disease resistant palms for each of the major oil palm viruses.

Disease resistance Oil palm diseases can have major economic repercussions for palm oil-producing countries. Durand-Gasselin records three diseases affecting the industry. These are: n Fusarium – can cause losses of up to 70% and mostly specific to Africa n Ganoderma – may cause up to 80% mortality, present in Southeast Asia and also in parts of Africa (sometimes in combination with Fusarium). Beginning to be seen in Latin America too n Bud rot, probably related to Phytophthora palmivora – can cause 100% mortality very quickly. Mostly seen in Latin America In terms of creating disease resistance, DurandGasselin explains the difference between total resistance (specific) and partial resistance (nonspecific). Total resistance is specific and can be bypassed easily by the pathogen, the report says. Partial resistance encourages and provides sustainable and non-specific resistance to a larger diversity of pathogens. Although such a method will not result in diseased plants disappearing completely from the field, it will be more efficient in limiting their number than total resistance does. Results from Fusarium resistance have been reasonably successful and go back to the 1980s and 1990s. Research on Ganoderma resistant varieties is much more recent and no Ganoderma varieties have been released yet, although results are promising, Durand-Gasselin says.

Drought resistance In October 2015, the Borneo Post reported that Malaysia is developing a drought-resistant oil palm breed that could withstand several seasons of dry spell – including the effects of El Niño. Such a breed could be available within 10 years the report said. According to the president of the International Society for Oil Palm Breeders (ISOPB), Dr Ahmad Kushairi, no efforts were made to breed a droughtresistant oil palm previously because the climate

THE DISCOVERY OF THE SHELL AND MANTLE GENE AND THE INVENTION OF SCREENING TESTS WILL ALLOW FOR LOW YIELDING PLANTS TO BE DISCARDED WHILE THEY ARE STILL IN THE NURSERY

did not necessitate such a development. Although initiatives for drought-resistant breeds are being developed in other parts of the world, Malaysia is only just beginning this process, Kushairi told the Borneo Post at the International Seminar on Gearing Oil Palm Breeding and Agronomy for Climate Change on 5 October last year. As the current extreme and unpredictable weather affects food crops, the need to address climate change in relation to palm oil productivity has emerged. Malaysia needs to be prepared for the consequences of extreme weather. A presentation published in September 2011 by Univanich Palm Oil PLC, entitled ‘Some Best Practices in Thailand’s Oil Palm Industry’, explained how palm oil breeding is making it

possible to grow oil palms in parts of Thailand up to 15o from the equator. Usually palm oil is only grown 10o either side of the equator. Thailand’s supply and demand is growing because oil palm breeding is improving drought tolerance. The Univanich Breeding Programme in Thailand had the objective to produce world-class tenera hybrids especially suited to dry growing conditions. In particular the company made selections based on high oil yields, drought tolerance and low height increments.

ISOPB The International Society for Oil Palm Breeders (ISOPB) is part of the MPOB but it represents oil palm breeds from countries across the world. According to the ISOPB website it has a current membership of around 200, most of which are based in Indonesia or Malaysia. The society’s aim is to advance the knowledge of oil palm breeding through international cooperation. In order to achieve this, its rules decree that it should hold symposiums, workshops and meetings locally and internationally; establish committees, commissions or working groups to deal with specific problems; arrange meetings of experts to exchange views, collaborate and distribute information; promote and assist in the international exchange of genetic material for breeding; publish a newsletter or journal to report on research activities; and where possible carry out these activities in consultation with the Food and Agriculture Organization of the United Nations and with other international, governmental or nongovernmental organisations.

The future When it succeeded in sequencing the oil palm genome, MPOB began a process that is already leading to increased understanding and improved productivity of the oil palm. The discovery of the mantled gene in particular has reopened the door to growing superior hybrid clones again, allowing for fast-growing, high-class oil palms to become the norm across the industry. According to MPOB director general Dr Choo, oil palm is now 10 times more productive than soyabean and genomics will only continue to improve its productivity in the future. e Rose Hales is OFI’s former editorial assistant

TABLE 2: DEMAND FOR GERMINATED SEEDS FROM 2005-2013 IN MALAYSIA (SEEDS/REGION) Year

Penisula

Sabah & Sarawak

Total

2005

77,606,255

4,509,184

82,115,439

2006

58,744,419

8,251,130

66,995,549

2007

56,645,073

8,540,413

65,185,486

2008

74,620,293

13,622,642

88,242,935

2009

71,907,565

14,578,910

86,486,475

2010

64,008,546

12,565,259

76,573,805

2011

57,812,058

14,842,943

72,655,001

2012

56,634,583

18,639,958

75,274,541

2013

47,396,304

15,232,476

62,628,780

Source: MPOB

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PAL M OI L – INSTRUMENTATION

NMR applications with palm oil Bench-top nuclear magnetic resonance (NMR) has various potential uses in the palm oil industry. Kevin Nott writes

he palm oil sector is one of the most productive within the oils and fats industry, helped partly by the plant having the highest yield (kg/ha/yr) of all the vegetable oils. Nevertheless there is scope for increasing oil production further by measuring the oil content at various stages in the process from the fields through to the mills. Bench-top nuclear magnetic resonance (NMR) is a well known means to measure oil and moisture content in oilseeds, for which there are various standard methods for oilseeds (ISO 10565, AOCS Ak 4-95) and their residues (ISO 10632, AOCS Ak 5-01). NMR has advantages over NIR and traditional extraction techniques. It can measure all the oil in the samples, not just from the surface. Therefore, it is ideal for large inhomogeneous samples. NMR is also not affected by factors such as colour and particle size. The linear calibration can be produced using just three reference samples, subject to the accuracy of the reference method. Alternatively, the instrument may be calibrated against the refined oil, which has been extracted from the seed, nut or fruit. For these reasons, bench-top NMR has many potential uses in the palm oil industry.

Oil in palm mesocarp Measurement of oil in palm mesocarp is mainly of interest to plant breeders wishing to measure the oil yield from their crops using bunch analysis. Oil content is normally measured by Soxhlet extraction (after oven drying) which restricts the sample throughput. Although the mesocarp must be dry prior to NMR analysis, the sample throughput is much greater than Soxhlet, which is restricted by time of analysis as well as the number of samples that can be analysed at any one time. In addition, NMR has been shown to be just as accurate as the hexane extraction method but does not require the use of solvents or other chemicals, fume cabinets and expensive disposal procedures. The method is simple; the samples are weighed in a vial, then conditioned at 50°C for 20 minutes to ensure that all the oil has melted prior to analysis. The measurement takes just 16 seconds, making the time per sample short when measured within a large batch of samples. The instrument may be calibrated against and, as a consequence, can obtain results equivalent to the reference extraction method. Alternatively, a primary calibration can be obtained using crude palm oil for the measurement of total oil content. It has been shown that extraction methods do not always remove all the oil, whereas NMR is able to measure all the oil in the dry tissue, even that which remains after Soxhlet extraction.

Oil in pressed palm fibre

Solid fat content

It is important to measure the oil content of pressed palm fibre in mills to maximise the efficiency of the extraction process, either by pressing or solvent extraction. However, this is a challenging measurement for many techniques as the oil content is relatively low and non-uniform and, as a consequence, the sampling variation can be large. It is important to note that this sampling variation, as well as incomplete extraction, can also lead to errors in the reference method. However, given that NMR is non-destructive, it is possible to measure the same sample by extraction after NMR analysis to avoid discrepancies due to sampling. Figure 1 (below) shows the correlation between the NMR signal/mass and the reference values determined on the same samples by Soxhlet (after drying). Any discrepancies between the results and calibration line are likely to be due to errors caused by the reference method itself.

The melting profile, which is a function of the oil composition, is an important property as it defines the applications that the oils/fats are eventually used for as an ingredient. Fortunately, benchtop NMR can also measure the proportion of solid fat in the palm oils/fractions conditioned at different temperatures. Given this is a fundamental measurement, it is not surprising that various standard methods exist which are used by oils/fats companies worldwide to characterise their raw materials. The Direct method (AOCS Cd 16b-93, ISO 8292-1, IUPAC 2.150) is the most commonly used due to its simplicity and precision. Figure 2 (below) shows that the melting profiles of palm olein and palm stearin, and as a consequence the solid fat method, are very reproducible. Benchtop NMR can be used at various stages of the palm oil production process, from measurement of the oil yield of crops through to processing and characterisation of the raw materials. w

Oil and moisture content

Kevin Nott is an applications scientist at Oxford Palm kernel expellers would like a rapid Instruments, UK measurement of oil content as it can help FIGURE 1: NMR CALIBRATION FOR OIL IN PRESSED PALM FIBRE determine the price that they pay. Nevertheless palm kernels are not commonly measured because the hard nut is very difficult to crush into smaller pieces. Crushing is needed to allow the solvent to penetrate the sample for better extraction, leading to a more accurate result. As the moisture content is relatively low, the oil content of palm kernels can be measured by NMR without drying. Furthermore, as radio The correlation coefficient and standard deviation are 0.99 and 0.28% respectively frequency radiation FIGURE 2: THE MELTING PROFILES FROM TWO SUB-SAMPLES OF penetrates the whole PALM OLEIN AND PALM STEARIN sample, palm kernels can be measured by NMR without crushing. They only need to be conditioned at a higher temperature to mobilise the oil prior to analysis. NMR can also measure oil and moisture content in the palm kernel cake, which is useful for monitoring the efficiency of the extraction process. In addition, NMR can measure the oil content of palm kernel meal, a byproduct, which is used for animal feed.

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PAL M OIL – STATISTICS

FIGURE 1: PALM OIL PRODUCTION, 1980-2017 (MILLION TONNES)

FIGURE 4: MALAYSIAN ANNUAL PALM OIL YIELDS (TONNES/HA)

FIGURE 2: PALM OIL CONSUMPTION SHARE OF 17 OILS & FATS (2015/16)

FIGURE 5: PALM OIL YIELDS IN MALAYSIA – % OF 5-YEAR AVERAGE (JANUARY 2011 – JANUARY 2017)

FIGURE 3: PALM OIL MARKET SHARE IN SELECTED COUNTRIES IN % OF EIGHT VEGETABLE OILS

FIGURE 6: CRUDE PALM OIL FUTURES CLOSE, FIRST POSITION IN MALAYSIAN RINGGITT/TONNE (1 APRIL 2016 – 6 MARCH 2017)

Global palm oil production is forecast to reach 65M tonnes this year. In 2016, production fell 6% or 3.9M tonnes as a result of the drought effects of El Niño. This pattern was also seen in 1998, when production fell 5% or 0.8M tonnes (Figure 1). Palm oil has become the most important vegetable oil for consumers in many countries, primarily in Asia, Africa and Central and South America (Figure 2). But the supply shortage has made it

necessary to ration demand, and palm oil usage has declined in several countries (Figure 3). The average annual oil yield of Malaysia – the world’s second largest producer of palm oil – fell to a 19-year low in 2016. In 2017, yields will recover but remain below average (Figures 4 & 5). Crude palm oil futures prices have ranged from below RM2,300 (~US$521) to nearly RM3,300 (~US$747) from 1 April 2016–6 March 2017 (Figure 6).

Source: Palm & Lauric Oils Price Outlook Conference & Exhibition (POC 2017), Kuala Lumpur, Malaysia 6-8 March 2017 Thomas Mielke Oil World ISTA Mielke GmbH Germany Tel: +49 40 7610500 E-mail: info@oilworld.de Website: https://www. oilworld.biz

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