22.11.2019 (Free Malaysia Today) - KUALA LUMPUR: An analyst of the palm oil industry has welcomed Malaysia’s push for certification of all domestic producers under the Malaysian Sustainable Palm Oil (MSPO) scheme.

Sathia Varqa, who owns Singapore-based Palm Oil Analytics, told FMT he believed the move would help ensure the industry’s continued viability.

He said sustainable-certified palm oil was popular across the globe when it was introduced to the market about 10 years ago but the premium prices it commanded had since caused a loss of popularity in developing countries.

However, he voiced confidence that demand for its use in various industries would rise with increases in the pace of the development of various countries.

Primary Industries Minister Teresa Kok recently said MSPO certification for areas planted with oil palms stood at 60% as of last month and about 72.6% of mills had been certified.

Varqa said the current push for biodiesel was good for prices, but warned that the demand for the product might in the long run be threatened by the popularity of electric cars.

However, he said those who doubted the benefits of MSPO certification should realise that compliance meant improvements to workers rights, working conditions and environmental sustainability.

A better working environment, he added, could help resolve the problem of a lack of local labour, which was posing structural problems to the industry.

But he said the industry’s heavy reliance on foreign workers did not pose as big a problem as the lack of clarity in labour policies, which, he claimed, had bought into question the economic sustainability of the industry.

Varqa, who is attending the International Palm Oil Congress and Exhibition here, said the Council of Palm Oil Producing Countries had offered an opportunity for Malaysia and Indonesia to collectively address the labour issue since most of the foreign workers in Malaysian plantations are Indonesians.

He said foreign workers, most of whom work in the plantations and were needed in applying fertilisers, were a critical component of maintenance and harvesting.

He spoke of the economy’s heavy dependence on palm oil, noting that it accounts for 4.5% of gross domestic product.

“It provides jobs and RM67 billion in export revenue to the country,” he said.