MARKET DEVELOPMENT
"Wilmar Hurting Palm Oil Exports'
"Wilmar Hurting Palm Oil Exports'
17/01/2014 (Business Times) - Malaysia will lose billions of ringgit in palm oil exports should Wilmar International Ltd be allowed to discriminate against Sarawak's palm oil supply.
Sarawak Oil Palm Plantation Owners Association (Soppoa) said it strongly rejected attempts by Wilmar, Unilever Plc and World Wide Fund for Nature (WWF) to discriminate against the state's palm oil supply and, in the same process, jeopardise Malaysia's palm oil exports.
"We are very disappointed with Wilmar's unilateral action to discriminate against palm oil harvested from oil palm trees grown on peat soil," said Soppoa manager Melvin Goh.
"This is not acceptable. It will have a devastating impact on the oil palm industry here, given that Wilmar's refinery operating under Bintulu Edible Oil Sdn Bhd source 1.7 million tonnes of crude palm oil (CPO) from millers in a year," he told Business Times yesterday.
The 1.7 million tonnes of CPO, at a conservative price of RM2,500 a tonne, works out to RM4.25 billion.
Last month, well-funded green group WWF arranged a signing ceremony for world's biggest palm oil trader Wilmar and food giant Unilever to undertake "no deforestation, no peat, no exploitation" in their palm oil trades.
Although this looks like an ordinary business arrangement, it is actually the start of a stranglehold on plantation companies that could stifle the oil palm industry's growth, Goh said.
Activists like WWF, Greenpeace, Wetlands International and their local affiliates have claimed that oil palm planting on peatland causes tremendous pollution in the form of greenhouse gas (GHG) emissions when water is drained from the soil.
These groups, however, fail to provide any credible scientific evidence to support their allegations.
"It defies logic for Wilmar to surrender to coercion and harassment. Why should we accept claims that does not have any scientific basis that can be verified?" Goh said.
"Sarawak is the final frontier in oil palm planting. Although Wilmar's pledge to Unilever and WWF is a business-to-business arrangement, this move goes against Malaysia's national interests," he said.
In highlighting the significance of Soppoa's protest, Goh noted that oil palm is an economic security crop for Malaysia and made reference to the annual US$20 billion (RM65.8 billion) palm oil exports, which support two million jobs in the sprawling value chain.
Many assume Wilmar's pledge only hurt the profits of plantation companies and oil palm farmers.
"It is more than that," Goh said.
He explained that employees of plantation companies are at risk of not being able to exercise their deserving share options in the stock market when their companies fail to export the critical amount of palm oil and bring in the profits.
"Apart from small-time investors like you and me, there are also pension funds like the Employees Provident Fund, Armed Forces Superannuation Fund Board and Kumpulan Wang Persaraan, which are heavily invested in plantation companies," he added.
Sarawak Oil Palm Plantation Owners Association (Soppoa) said it strongly rejected attempts by Wilmar, Unilever Plc and World Wide Fund for Nature (WWF) to discriminate against the state's palm oil supply and, in the same process, jeopardise Malaysia's palm oil exports.
"We are very disappointed with Wilmar's unilateral action to discriminate against palm oil harvested from oil palm trees grown on peat soil," said Soppoa manager Melvin Goh.
"This is not acceptable. It will have a devastating impact on the oil palm industry here, given that Wilmar's refinery operating under Bintulu Edible Oil Sdn Bhd source 1.7 million tonnes of crude palm oil (CPO) from millers in a year," he told Business Times yesterday.
The 1.7 million tonnes of CPO, at a conservative price of RM2,500 a tonne, works out to RM4.25 billion.
Last month, well-funded green group WWF arranged a signing ceremony for world's biggest palm oil trader Wilmar and food giant Unilever to undertake "no deforestation, no peat, no exploitation" in their palm oil trades.
Although this looks like an ordinary business arrangement, it is actually the start of a stranglehold on plantation companies that could stifle the oil palm industry's growth, Goh said.
Activists like WWF, Greenpeace, Wetlands International and their local affiliates have claimed that oil palm planting on peatland causes tremendous pollution in the form of greenhouse gas (GHG) emissions when water is drained from the soil.
These groups, however, fail to provide any credible scientific evidence to support their allegations.
"It defies logic for Wilmar to surrender to coercion and harassment. Why should we accept claims that does not have any scientific basis that can be verified?" Goh said.
"Sarawak is the final frontier in oil palm planting. Although Wilmar's pledge to Unilever and WWF is a business-to-business arrangement, this move goes against Malaysia's national interests," he said.
In highlighting the significance of Soppoa's protest, Goh noted that oil palm is an economic security crop for Malaysia and made reference to the annual US$20 billion (RM65.8 billion) palm oil exports, which support two million jobs in the sprawling value chain.
Many assume Wilmar's pledge only hurt the profits of plantation companies and oil palm farmers.
"It is more than that," Goh said.
He explained that employees of plantation companies are at risk of not being able to exercise their deserving share options in the stock market when their companies fail to export the critical amount of palm oil and bring in the profits.
"Apart from small-time investors like you and me, there are also pension funds like the Employees Provident Fund, Armed Forces Superannuation Fund Board and Kumpulan Wang Persaraan, which are heavily invested in plantation companies," he added.