Posts tagged under palm oil
The impact of palm oil on Indonesia’s poor: podcast with Prof Gellert
On Monday, 20 June 2011, Professor Paul K. Gellert visited the Lee Kuan Yew School of Public Policy to give a talk on “Commodification of Indonesian forests: from timber to palm oil”. Right after the talk the ATM Team got a chance to sit down with Prof. Gellert and interview him on the rapid expansion of the palm oil industry and its impact on the lives of poor and vulnerable communities in Indonesia.
Global palm oil production is dominated by Indonesia and Malaysia, which together account for about 85 % of global production and close to 90 % of palm oil exports. Palm oil production is very land-intensive and growth projections for Indonesia will require the conversion of millions of hectares of forest into plantations in the years to come.
In our interview with Prof. Gellert we asked him about the role of the World Bank’s recent re-engagement into ‘facilitating investments’ in palm oil, the impact on poverty alleviation and regulatory issues with the rapid expansion of this industry. To listen to his answers click on the video below.
Friday’s top Southeast Asian energy links
Villagers protest biomass power plant in Ubon Ratchathani
IAEA says Indonesia and Vietnam ready to build nuclear plants
Indonesia, Malaysia launch oil palm campaign in European Union
TNB signs RM1bil contracts for Terengganu hydroelectric project
ASEAN energy: weekly review (Oct 23-29)
Asia:
As Singapore mulls over whether it should go down the route of nuclear energy, Asian countries are leading the field in what some insiders have called a nuclear renaissance.
Philippines:
The process of restructuring the Philippine power sector had been on a stop-and-go mode in the earlier part of the decade – until breakthroughs in privatization were attained in the past two years.
The government has remained non-committal on whether to push through with the privatization of Mindanao’s major hydropower complexes as provided for in the Electric Power Industry Reform Act of 2001 (Republic Act 9136), Mindanao Development Authority (Minda) Chair Luwalhati Antonino said.
The Manila Electric Co. (Meralco) is now set to start investing in generation facilities that will deliver at least 1,500 megawatts (MW) of power over the next five to six years, following the approval of its projects by the company’s board.
Indonesia
Palm oil and big food
American food company General Mill has announced they will stop buying palm oil from companies accused of rain forest destruction. The company claims it is concerned with the deforestation caused by palm oil plantations and will aim to buy all its palm oil from sustainable and responsible producers by 2015.
About 10 percent of Indonesia’s export revenues and 6 percent of Malaysia’s come from palm oil, the biggest importers are China and India
Over one million people in Indonesia work in the palm oil sector and the expansion of palm oil plantations has increased the livelihood of many poor farmers
Unilever, Nestle, Kraft and Burger King are examples of companies that have already announced similar actions and ended their contracts with Indonesian palm oil producer PT Sinar Mas Agro Resources and Technology.
Indonesian palm oil must surge ‘rapidly’ to moderate demand
Indonesia. Palm oil must jump by as much as 24 percent to cool export demand as output declines in Malaysia, the second-biggest grower, and weather damages canola crops in Europe and Canada, according to Godrej International.
“The market needs to move ahead rapidly so that there is time for rationing to set in,” Dorab Mistry, a director at Godrej, said in an e-mail from London.
“At 2,600 ringgit [$824], you can’t match demand with supply. And on top of that, the supply is shrinking.”
Palm oil has rallied 13 percent from a seven-month low on July 7 on optimism consumption will increase in Asian nations, which mark a number of festivals in the September quarter, and on concerns that poor weather may disrupt output in Indonesia and Malaysia, the world’s top producers.
Malaysian stockpiles touched a 10-month low in June as exports rose, according to the nation’s palm oil board.
“The consumer has got it wrong and is still in denial,” said Mistry. “He is watching as one piece of bad news after another comes in each week. At some stage, the consumer needs to get ahead of the game rather than keep fighting the market.”
Smart to expand palm oil plantations
Daud Dharsono, President director of Indonesian palm oil giant PT SMART, aims to expand its plantations by 50,000 hectares a year. (Reuters Photo/Crack Palinggi)
Indonesia. Palm oil giant Sinar Mas Agro Resources and Technology, accused by green groups of clearing valuable forest, aims to expand its plantations by 50,000 hectares a year, the company’s president director said on Thursday.
Smart last month rejected fresh claims by Greenpeace that the firm was clearing peatland and high conservation value forests that shelter endangered species and trap vast amounts of greenhouse gases.
Smart runs the Indonesia palm oil operations of its Singapore-listed parent company, Golden Agri-Resources. GAR is controlled by the Widjaja family, whose business empire Sinar Mas has interests in pulp and paper, finance and property.
The bitter dispute between the palm oil industry and environmentalists has broader implications for Indonesia, the world’s biggest palm oil producer.
It wants to expand crude palm oil production and boost economic growth but has also promised to cut greenhouse emissions by as much as 41 percent from business-as-usual levels by 2020 — largely through curbing deforestation.
Smart’s president director, Daud Dharsono, said that the Greenpeace campaign had not affected the firm, which currently has around 430,000 hectares of plantations.
Greenpeace claim that photos show deforestation in Indonesia, again
A forest area under development for palm oil plantations in West Kalimantan (Reuters photo)
The debate about deforestation and protecting wildlife habitats rages on. Photos from activist group Greenpeace show deforestation of areas where orangutans reside in West Kalimantan. But agrobusiness giant Sinar Mas says these are not primary rainforest areas. Check out the full story here.
Palm oil, paper firms ‘destroying Indonesia’s forests’
JAKARTA: Palm oil and paper producers are the biggest threats to Indonesia’s vast forests, according to environmental groups and other watchdogs.
Taken in March, this aerial photograph shows peatland forest in the Ketapang district, West Kalimantan, that has been cleared to make way for an oil palm plantation.
Many cut timber illegally, clearing large tracts for easy profit from the raw material to make paper, they say. They also destroy entire forests to make way for oil palm plantations.
Aggressive expansion of palm and timber cultivation, coupled with weak enforcement of existing laws already on the books in Indonesia, have made the country the world’s third worst polluter after China and the United States.
Greenpeace alleges that Indonesia’s largest palm oil business group, the Sinar Mas Group, violated laws by clearing forests in Kalimantan without following proper environmental protection procedures.
The Jakarta-based business group has repeatedly denied that claim.
The group, which also has forest concessions in Riau province near Singapore to support its pulp and paper business division, is also facing accusations that it has damaged the environment there.
The complex world of trade protectionism and environmental standards
Challenges ahead
The EU and the top two palm oil exporters - Malaysia and Indonesia – may butt heads at the WTO.
The EU’s Renewable Energy Directive requires Biofuels and Bioliquids achieve a minimum Greenhouse Gas (GHG) saving of 35 per cent to qualify for tax-excise exemptions and other trade benefits. Under Annex V, Palm Oil’s GHG saving is calculated to be 19 percent, below the 35 percent threshold.
See these recent articles from Xinhua and the Jakarta Globe, and this excellent article by Fredrik Erixon from the European Centre for International Political Economy for more commentary.
By the way, did we mention that the EU and ASEAN nations are working towards more bilateral Free Trade Agreements?
How can we reconcile ‘Green Incentives’ and Free Trade? This will be a big challenge going forward.