Firms fight to fix EU palm oil crisis

By Rod Addy

- Last updated on GMT

Related tags Palm oil

Firms fight to fix EU palm oil crisis
Rod addyThe crisis in sustainable palm oil (SPO) supply is improving in Europe, but progress is slow and sourcing the right fractions remains a challenge, according to industry stakeholders.

The Roundtable on Sustainable Palm Oil's (RSPO's) 2011 Growth Interpretation report states year-on-year supply of certified SPO rose by 73% to 4.8Mt, versus 2.8Mt in 2010. Year-on-year sales volumes rose by 94%. More European markets are committing to sourcing only RSPO certified palm oil from 2015, with Belgium the latest to do so in January.

A spokeswoman for Kellogg told Food Ingredients Health & Nutrition (FIHN): "In the EU, where segregated sustainably grown palm oil is available, we will begin using it in 2012."

However, Sandra Mulder, senior market adviser for WWF in the Netherlands, said: "There has been a lot of progress, but also a lot of companies have not done enough to move from certificates to direct supply."

Bob Norman, general manager at SPO certificate provider GreenPalm, said: "Those who used standard refined palm oil have made the switch. When you get down to fractions and fractions of those fractions you have a problem."

He said olein, which is used for cooking oil, forms the bulk of European supply, but there is more demand for sustainable stearin, a harder fraction used in spreads and baked goods.

While supply of that remains tight, many firms buy GreenPalm certificates, guaranteeing equal investment in SPO, or a mass balance of SPO and standard palm.

The situation is complicated by a switch away from palm to oils such as rapeseed as manufacturers cut saturated fats in food, said oils and fats firm AAK. It is reducing palm oil production. "We have an extensive range of low fat products we will drive in 2012–2013,"​ added marketing controller Judith Murdoch. "We are investing millions of pounds at our [UK] refinery in Hull and similar investment is taking place [elsewhere] in Europe."

New Britain Palm Oil (NBPO) has a supply and marketing deal with Singapore-based Wilmar to provide SPO to northern Europe from a plant in Germany. It has also commissioned a dedicated fractionation plant for the Ferrero Group to export specialised SPO to Italy and the UK. "We will be looking at other areas for more sites,"​ said executive director Alan Chaytor.

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