Demand for Sustainable Palm Oil Remains Healthy During Lockdown

The Roundtable on Sustainable Palm Oil (RSPO) said demand for certified sustainable palm oil (CSPO) has not dropped amid the COVID-19 pandemic, with sustainability still high on the agenda for its members.

Its interim chief executive officer Bakhtiar Talhah said when the world started to enter into lockdowns to combat COVID-19, he was worried that its members would produce and consume less CSPO, leading to the sustainable palm oil being pushed to the backburner.


However, demand for CSPO has not dived, Bakhtiar told theedgemarkets.com, calling it a "pleasant surprise".


"Even when there was a dip, it was more market-related, rather than 'let's forget about sustainability'. It was the whole market. When you look at the profile of where CSPO goes into the food industry, pharmaceuticals and cosmetics etc, some are hit and some are not as severely impacted," he said.


"We thought that companies would say that our profits have gone down, so let's not focus on sustainability. That did not really happen.


"Most companies that we spoke to said this was a time to put our house in order, and look at what matters to our company and consumers," he added.


Bakhtiar added that sustainability is still very high on the agenda.


The pandemic, he said, possibly presents a period of reflection, with many of its members in North America and Europe speaking more on the issue of sustainability when it comes to palm oil.


Bakhtiar noted that CSPO volumes are similar to last year, despite obstacles in production, such as trading and logistics issues, combined with the worker shortage in Malaysia.


He said some sectors such as the food and beverage sector — hampered by reduced occupancy and seating capacity — have been affected by the pandemic, resulting in overall palm oil consumption being impacted.


As such, it is still a bit early for the RSPO to see the impact on CSPO.


"But I am optimistic because the RSPO primarily operates in the food space, and that, touch wood, won't be as badly affected as the other sectors," he said.


According to RSPO's website, 15.19 million tonnes of CSPO and 3.38 million tonnes of certified sustainable palm kernel (CSPK) were produced in 2019.


As of July 31 this year, 15.89 million tonnes of CSPO and 3.56 million tonnes of CSPK had been produced.


Highlighting that RSPO-produced palm oil accounts for only 19% of global palm oil production currently, Bakhtiar stressed the need for more players to come on board in order to increase the amount of certified sustainable palm oil in the market.


In Malaysia, he said he would like to see more medium-sized players come on board.


Bakhtiar said more work needs to be done in order to challenge consumer perceptions surrounding palm oil, especially in regions such as Europe where negative perceptions persist.


In that regard, Bakhtiar said that the RSPO, which has traditionally used business-to-business channels through its members to engage with consumers, has also developed business-to-consumer channels such as social media to engage with end consumers when it comes to sustainable palm oil.


Source: www.theedgemarkets.com

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