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China and India targeted to close the supply-demand gap of certified sustainable palm oil

By Kacey Culliney , 06-Mar-2012
Last updated the 07-Mar-2012 at 15:08 GMT

China and India, the two largest consumer markets for palm oil, will be targeted by the Roundtable on Sustainable Palm Oil (RSPO) to take-up certified sustainable palm oil (CSPO) in a bid to close the stark gap between the supply and demand of this global commodity.

A new RSPO report, ‘2011 RSPO CSPO Growth Interpretation Narrative’ (GIN), has detailed and analysed the growth and trends of sustainable palm oil and RSPO membership, marking the first report of its kind to track developments in this sector.

According to the report, sales of CSPO in 2011 were up 94% from 2010 and supply was up 73%, but RSPO data clearly shows a gap between the supply and demand figures.

For December 2011 and January 2012 supply of CSPO was pegged at around 480,000 metric tonnes (mt) yet sales in December only reached 280,000mt and January sales were even lower at 180,000mt.

“While an impressive increase in supply and sales of CSPO has been seen in demand markets such as those in Europe, supply of CSPO continued to exceed demand,” RSPO told FoodNavigator-Asia.

Closing the supply-demand gap via Asia

“In order to balance supply and demand, we aim to increase uptake among current demand markets and penetrate major new markets, such as those in Asia,” RSPO added.

Jan Kees Vis, RSPO President, said that this increase in uptake will be achieved through several strategies, one being to “drive membership and strategic collaborations in new demand markets such as India and China.”

China and India are two of the biggest consumer markets for palm oil and so encouraging a greater take-up of CSPO will be a key factor in creating balance to the supply and demand, RSPO said.

It added that outreach work is taking place in both countries to create awareness of CSPO.

The inaugural report detailed an increase in RSPO membership, with a 60% membership surge from consumer goods manufacturers, a 50% increase by retailers and a 30% strengthening of the processors and traders category.

However, RSPO will be focused on driving its membership further in 2012, across the entire supply chain, Vis said.

Promoting and marketing for companies to adopt the RSPO trademark will continue, he said, and the organisation will stay committed to enhancing the international certification standards for CSPO.

Darrel Webber, secretary general at RSPO, previously told our sister site FoodNavigator.com that while the trademark is a core part of its growth strategy, the organisation is “beyond merely a certification scheme or standard” and that RSPO is a “multi stakeholder initiative that represents the production front; demand end and everything in between.”

Southeast Asian strengths

According to the report, there are now 29 grower companies with 139 certified mills across six countries; Indonesia, Malaysia, Papua New Guinea, the Solomon Islands, Brazil and Colombia.

Southeast Asia houses the largest production of CSPO with Malaysia representing the largest chunk of production at 49% and Indonesia close behind at 41%. Papua New Guinea (7%), Brazil (2%), Solomon Islands (1%) and Colombia (0.4%) all follow behind.

The RSPO was formed in 2004 with an objective to promote the growth and use of sustainable palm oil products.

It launched its certification of sustainable palm oil in 2008 and the certification trademark has since gained traction particularly in European markets.

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