PALM OIL
DEFORESTATION
The worldwide recession has led many
producers to cancel their seed orders
and scale back expansions, according
to a USDA Foreign Agriculture Service
report released last month, which said
that new plantations would slow - possibly into 2010. The analysis expects global
demand to then return to earlier levels of
2.2 million tons per year.
“Prices will go up. This is a short-term
phenomenon,” said Tim Killeen, who
represents the conservation organization Conservation International on the
Roundtable for Sustainable Palm Oil
(RSPO), a multi-stakeholder effort to
form sustainable standards for palm
oil production. “I know there is a lot of
interest among energy companies with
large European markets.”
In the meantime, industry leaders are
asking the Indonesian government
to stimulate the palm oil market. “If
Indonesia and Malaysia want to see a fair
demand for palm oil and avoid all this
fluctuation in prices, you have to create
domestic demand,” said M.R. Chandran,
an RSPO advisor and industry consultant, according to AFP news agency last
month.
In an effort to stimulate demand, Indonesia passed biofuel mandates last year
that require the country’s cars and trucks
to include either ethanol or palm-oil
biodiesel in their fuel mix.
From 2000-2009, Indonesia supplied
more than half of the global palm oil
market, eclipsing Malaysia’s production
in 2006 to become the world leader.
Indonesia’s palm oil exports increased
nearly 11 million tons over the decade, or
about 27 percent per year.
This expansion came at an annual
expense of some 340,000 hectares of
Indonesian countryside, mostly tropical
lowland forests. The government plans
to establish about 1.4 million hectares of
new plantations by 2010, according to
the Indonesian Palm Oil Commission.
The industry group estimates that more
than 7 million hectares of plantations
have been established, leaving an additional 24.5 million hectares available for
future expansion.
Such expansion, however, could wipe out
the remaining natural habitat of several endangered species. The Center for
Orangutan Protection warned last year
that the great ape may become extinct in
Central Kalimantan, a region of the rapidly
developing island o