Monday, 29 June 2015


Desi Kusumadewi, Director of RSPO Indonesia, declared that until May 2015 production of CPSO (Certified Sustainable Palm Oil) has reached 12.64 million tons, or 18% of world palm oil production. Approximately 51% CPSO is produced by Indonesia, 42% by Malaysia, 5% by Papua New Guinea, and 3% by other countries.

Meanwhile, production of CSPK (Certified Sustainable Palm Karnel) reached 2.88 million tons. Indonesia accounted for 49%, Malaysia 44%, Papua New Guinea 4%, and other countries 3%. Te size of RSPO-certified land worldwide reached 3.44 million hectares. Indonesia accounted for 45%, Malaysia 42%, Brazil 5%, Papua new Guinea 5% and other countries 3%.

Production of fresh fruit bunches (TBS) from RSPO-certified land reached 56.4 million tons, 47% from Indonesia, 45% from Malaysia, 5% from Papua new Guinea and 3% from other countries. Unfortunately, market acceptance is still lacking. Currently, those purchased by consumers in 2014 is only 48.6% of supply of 10.99 million tons of CPSO, and only 5.34 million tons were absorbed by market. Market acceptance in the future will be further enhanced.

There are two certificates of RSPO, namely certificates for manufacturers to ensure that palm oil is produced in accordance with principles and criteria, and the second is to ensure that palm oil traded is derived from certified plantations. This rigorous certification system will prevent consumers from consuming palm oil which is not sustainable.

RSPO supply chain certificate is to ensure that CSPO trade in very phase in every phase includes derivative products, ranging from handling, storage, transportation, trading, refining, packaging and labeling.

To increase market acceptance of RSPO, two trading systems were applied, namely CSPO physical trading and CPSO virtual trading called Green Palm Program. There are four supply chain systems, i.e. Identity Preserved (IP), strengthened (SG), Mass Balance (MB), and Book and Claim (BC).

IP is very exclusive. CPSO is only from one source which is certified and must be completely separate from non-CPSO, starting from PKS, transportation, storage tank up to the processing industry. With this system, CSPO arriving at the processing industry originates from a single source that has been certified so it is easily traceable. Building infrastructure for this system is very expensive. The final product contains RSPO trademark.

Meanwhile, CSPO segregation from various factories can be mixed, but must be kept separate from non-CSPO. So the oil consumed by end users are guaranteed to be derived from certified plantations, only being transported, in storage tanks everything has been mixed from a variety of certified plantations and PKS. The final products is certified with RSPO trademark.

Mass balance mechanism allows CSPO and non-CSPO to be mixed in the process of transportation, storage tank and derivative industry. Only when they become finished products, not everything is allowed to be labeled with RSPO trademark. “For example, margarine factory processed 2000 tons of palm oil, 1000 tons of CSPO and 1000 tons of non CSPO. Margarine products that may be labeled are those whose 1,000 tons are from the CSPO, “he said. RSPO trademark labels include the word “mixed”.

While, in BC there is absolutely no physical trading of CSPO but only sale & purchase of certificate. For example, one factory has difficulty in getting CSPO, but they are very supportive. Therefore, despite receiving uncertified for 1 ton, for example, a factory demonstrates a commitment for 2000 tons, they could buy CPO from anywhere and then they buy CSPO from a certified plantation with a price of, for example, USD 5/certificate. The advantage for the producer, in addition to selling CPO is that they could also sell certificates. The final product may not include RSPO trademark.

Starting in 2015, EU requires all products to specify the type of oil used. If formerly, the word” vegetable oil” is enough, now it must be clearly stated “palm oil” , “soybean” and others. With the onslaught of negative campaign of palm oil, this condition is feared to make consumer not wanting to buy the product. But, with the RSPO trademark label, it is expected that this will make the RSPO trademark label, it is expected that this will make consumers still choose the product because the raw material is guaranteed sustainable.

Currently the market is buying BC more, especially in Europe, because the products that enter Europe are no longer in the form of CPO, but its derivatives products, so that it is difficult to track whether or not it is derived from CSPO, in contrast to china and India who buy CPO more.

Now, it has begum to shift to sales of CSPO with IP mechanism. SC and MB has increased, while BC is declining. This is related to industry associations in the Netherlands, Belgium, England, France, Germany and Sweden which are committed to using 100% CSPO by 2020. (E)  

Business News - May 29, 2015

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