MARKET DEVELOPMENT
IOI: Suspension Won’t Hurt CSPO Inventory
IOI: Suspension Won’t Hurt CSPO Inventory
24/03/2016 (The Star) - IOI Corp Bhd’s existing inventory of certified sustainable palm oil (CSPO) will not be impacted should there be a suspension of the group’s Roundtable on Sustainable Palm Oil (RSPO) membership.
IOI, in a statement issued yesterday, assured that its inventory would continue to be sold as CSPO and that crude palm oil (CPO) sales would not be stirred, as CPO was a globally traded commodity.
“The only effect is that we will not be able to earn CSPO premium on our oil, which represents only a very small percentage of less than 0.5% of our revenue,” IOI said.
RSPO has stated that it would make a proposal to its board of governors to suspend IOI’s membership and the suspension would remain until the submission and acceptance of IOI’s action plan by RSPO.
That said, the plantation heavyweight noted that it had submitted a detailed and in-depth action plan to RSPO yesterday, and believes that the measures contained therein were reasonable as well as sufficient to resolve the outstanding issues.
“We are now waiting for RSPO to review the action plan and give its response.
“We believe any statement or comment relating to the effect of the suspension of IOI’s RSPO membership is premature and highly speculative at this stage,” it said.
Bloomberg reported that RSPO’s complaint panel had approved IOI’s certification to be temporarily suspended for alleged non-compliance. It said IOI could face downside risk, with downstream operations possibly being smashed in the event of its RSPO certification suspension.
Customers, mostly in the European Union and the United States, might switch to other suppliers to comply with their sustainability policies, said Bloomberg, adding that IOI’s downstream operation accounted for about 30% of its total operating profit for financial year 2015.
RSPO had reportedly, in a letter to IOI dated March 14, said that the group had breached RSPO principles on environmental permits and allegedly cleared more land than authorised in certain plantations in Indonesia.
IOI, in a statement issued yesterday, assured that its inventory would continue to be sold as CSPO and that crude palm oil (CPO) sales would not be stirred, as CPO was a globally traded commodity.
“The only effect is that we will not be able to earn CSPO premium on our oil, which represents only a very small percentage of less than 0.5% of our revenue,” IOI said.
RSPO has stated that it would make a proposal to its board of governors to suspend IOI’s membership and the suspension would remain until the submission and acceptance of IOI’s action plan by RSPO.
That said, the plantation heavyweight noted that it had submitted a detailed and in-depth action plan to RSPO yesterday, and believes that the measures contained therein were reasonable as well as sufficient to resolve the outstanding issues.
“We are now waiting for RSPO to review the action plan and give its response.
“We believe any statement or comment relating to the effect of the suspension of IOI’s RSPO membership is premature and highly speculative at this stage,” it said.
Bloomberg reported that RSPO’s complaint panel had approved IOI’s certification to be temporarily suspended for alleged non-compliance. It said IOI could face downside risk, with downstream operations possibly being smashed in the event of its RSPO certification suspension.
Customers, mostly in the European Union and the United States, might switch to other suppliers to comply with their sustainability policies, said Bloomberg, adding that IOI’s downstream operation accounted for about 30% of its total operating profit for financial year 2015.
RSPO had reportedly, in a letter to IOI dated March 14, said that the group had breached RSPO principles on environmental permits and allegedly cleared more land than authorised in certain plantations in Indonesia.