23/10/2008 (Solomon Star News) - THE Palm Oil Outgrowers Association on Guadalcanal Plains wants the Guadalcanal Plains Palm Oil Limited (GPPOL) to explain the drastic drop in palm oil prices.

It is also seeking explanations from responsible authorities within the government.

Outgrower price has dropped to $626 per metric tonne from the previous $1186 on fresh fruit bunches. Outgrower scheme is where land owners plant and harvest their own palm oil and sell fresh fruit bunch to the company.

The chairman of outgrower association, Henry Saea, said this was a drop of 47 per cent and GPPOL needs to explain this.

“If the company cannot provide any justification then responsible government authorities should explain,” Mr Saea said.

He added if the government is satisfied with this huge price drop, it should give subsidies to small holders to encourage them and keep them in business.

“If the government is truly for rural development, as they preached so much about, it should practise it now. Oil palm is a major contributor to the economy and I challenge the government to do it,” Mr Saea said.

GPPOL General Manager Harry Brock confirmed the price drop and explained this is due to the fall of crude oil price by two-thirds in the global market.

He strongly advised those who are still in doubt to cross check with the Central Bank for further confirmation. Mr Brock said the drop in palm oil price is just natural for any commodity business.

The Solomon Star understands global crude oil price has dropped drastically that it affects any commodities which are priced in relations to it.

GPPOL took over from the former Solomon Islands Plantations Limited (SIPL), which abandoned the plantation field at the height of the ethnic tension.

Landowners claimed GPPOL was no better than the previous company. Mr Saea said the price drop was a major set back for them.

Commodities Export Marketing Authority (CEMA) confirmed they were aware of the price decrease in the global market but were not able to say how much.

Mr Saea said the outgrowers scheme gives more money to landowners than receiving royalties from the company. Under the outgrower scheme, one hectare of land alone can earn $2000 over a month to a landowner.

In comparison, 66hectare of Mr Saea’s tribal land rented by GPPOL earns a royalty of only $1900 per month, a mere approximation of $29.79 per hectare per month.  

Outgrowers are losing confidence in GPPOL, and threatened to transfer their land to alternative viable development that yeilds better benefits.

Greenta Tome, another member of the association, claimed GPPOL monopolises palm oil so it can do any thing it wishes for its own benefit.