FDBusiness.com

The third largest palm oil producer in the world, Thailand has now joined a select group of nations that supply certified sustainable palm oil (SCPO), with a first consignment ready for export to Europe.

Certified by the Roundtable on Sustainable Palm Oil (RSPO) the country now ranks alongside Indonesia, Malaysia, Papua New Guinea, Solomon Islands, Brazil, Colombia and Ivory Coast now that Univanich Palm Oil has readied the 1,000-tonne shipment.

According to John Clendon, managing director of Univanich, Thailand’s biggest exporter of crude palm oils and seeds, the shipment will arrive in Hamburg, where it has been sold to a major trader.

“I can’t tell you who it is, but the name will be immediately recognisable,” he said. “What they do with it is up to them, whether they process it or sell it on.”

With palm oil a controversial commodity, with issues like last year’s Nutella Tax law in France still debated in Europe, Clendon says that the RSPO certification will open doors for increased exports. Indeed, Univanich expects shipments to double to 2,000 tonnes per month as the company gains capacity, and has already received further orders from Europe.

“The certification is really important for us as Thailand is unique as a producing country,” he explained. ”

In Thailand, there is no clearing of forests for oil palms, and 80% of the crop comes from small farmers who have converted their land from other agricultural uses, like rubber, coconuts and cattle farms.

There is probably zero clearing of forests so it’s doubly attractive – for the farmers and for the environment.

“The premium price this certified oil can achieve in world markets augurs well for Thailand being recognised as a future source of sustainably produced palm oil. This is also significant for the 160 members of the Univanich PlaiPraya Community Enterprise Group.”

Smallholders united

Supplying Univanich with their crop, this group of independent smallholders in Thailand’s Krabi province was recently recognised as the first in the world to be certified by RSPO through group certification.

“We hope this development encourages other smallholders who supply fresh fruit bunches to companies to aspire towards RSPO certification and reap the advantages,” Clendon added.

“These include access to international demand markets for sustainable palm oil, longer-term efficiencies in yield and productivity, and effective cost management.”

Blazing a trail

Darrel Webber, Secretary General of the RSPO, said Univanich had “blazed a trail” for Thailand: “We applaud Univanich for embracing international standards in the production of sustainable palm oil. This allows us to advance one step closer to our vision of making sustainable palm oil the norm in the market.”

More than 80% of Thailand’s oil palm industry is made up of smallholders, and the achievement “shows it is possible for independent smallholders to be RSPO-certified with the right level of commitment from responsible companies and government impetus,” added Webber.

This is especially the case when smallholders have been traditionally hindered by a lack of access to support for funding, expertise and capacity. There is also low general awareness of the benefits of certification. To counter this, RSPO has set up strategic initiatives for the communities.

Now, 15% of world’s palm oil production is RSPO-certified with an estimated annual production capacity of 8.6m tonnes – accounting for around 15% of global crude palm oil.

Spread over 2.4m hectares of certified area, about 46.8% of the world’s current RSPO-certified sustainable palm oil production capacity comes from Indonesia, followed by 45.3% from Malaysia, and the remaining 7.9% from Papua New Guinea, Solomon Islands, Brazil, Colombia and Ivory Coast. And now Thailand has added its name to that list.