22/06/2009 (Jakatra Globe) - Despite the environmental issues surrounding crude palm oil production, CPO exports to the European Union over the first quarter of the year saw a 16 percent increase from the same period in 2008.

Elfian Effendi, executive director of nongovernmental organization Greenomics, said that this means that talk of boycotting the commodity over the negative impacts of CPO production on the environment did not have any significant effects.

“If the boycott threat had an impact on CPO, it was likely small and not significant since people know it was only part of international trade propaganda related to business competition,” he said. Greenomics has previously criticized the EU for what it says are inconsistent environmental policies and actions.

Local palm oil exporters have been bracing for a possible drop in demand from the EU, which has been advocating a greener approach to the oil’s production. By January next year, CPO exporters to EU member states will be required to be certified by the Roundtable on Sustainable Palm Oil, a nonprofit group formed in 2004 by palm oil producing and importing countries, as well as NGOs.

The EU is also proposing a ban on the use of CPO for biofuel, and is planning to issue carbon footprint and conservation requirements for palm oil exporters.

But according to data from the Central Statistics Agency (BPS), CPO exports to EU countries totaled 490,000 tons from January to March 2009, higher than the 425,000 tons exported to the region in the same period last year.

With the drop in CPO prices, however, the value of exports to the EU in the first three months of 2009 dropped 40.9 percent to $229.9 million from $388.8 million in the same period last year.

Overall, the value of Indonesia’s CPO exports in the first quarter dropped 54.07 percent to $912.37 million from $1.98 billion a year earlier due to palm oil price declines.

Meanwhile, more CPO importers are adopting stricter environmental standards, with the US state of Minnesota also banning the use of CPO for biofuel.

But Agriculture Minister Anton Apriyanto has said that the government, in cooperation with Malaysia, will promote sustainable palm oil management.

“Many misunderstandings in CPO trading, like the amount of carbon contained in an oil palm tree, are leading to negative sentiment,” he said. “Therefore, we will work with the US Department of Agriculture to conduct joint research into palm oil. We should be more creative in promoting CPO.”

Indonesia produces roughly 20 million tons of CPO annually, of which three million tons are allocated for domestic consumption and the rest exported.