The Indonesian Government, the Council of Palm Oil Producing Countries (CPOPC) and the Indonesian Palm Oil Association (GAPKI) hosted the first Sustainable Vegetable Oil conference on the sidelines of the G20 two weeks ago.
A key aspect of the conference was that it highlighted the role of vegetable oils in global food security, and new collaboration between different parts of the supply chain to ensure going forward.
The event represented the first time the world’s palm oil producing countries had participated in a major multilateral event outside of ASEAN.
It was also on the sidelines of GAPKI’s annual Indonesia Palm Oil Conference (IPOC), which is arguably the most important palm oil event of the year.
The conference opening was addressed by Indonesian Coordinating Minister Hartarto and Malaysian Plantation Minister Kamaruddin, and was addressed by official representatives from Russia, China, India, Ukraine, as well as officials from the WTO, FAO and World Food Program. Officials from the European Union were absent from the event.
This underlined that the world’s major players in the supply chain from the major producers and exporters (e.g. Indonesia and Russia) and the major importers (India and China) are prepared to collaborate to ensure stability of supply for their populations at a time of trade instability and skyrocketing prices.
So although the event was about sustainability, the approach to sustainability was more holistic, and its major objective was demonstrate the role the global vegetable oil supply chain plays in food security.
In this regard, the event succeeded.
The presentation from Cedreic Pene at the WTO underlined that although there is very little protectionism around oilseeds, there are much higher levels of protection for the vegetable oil itself. Pene also highlighted the fact that in addition to Indonesia and Malaysia’s cases against the EU regarding palm oil, both Indonesia and Brazil last month raised issues of market access for vegetable oil with the EU at the WTO.
Maximo Terero of the FAO pointed out that the global vegetable oil market is still vulnerable to significant price shocks because of generally tight supply in the global marketplace.
On prices and supply more broadly, a key talking point at the SVO conference and the IPOC conference was that the global soybean oil price has a significant premium over palm oil, and has been driven up significantly by new US policies. The USDA estimates that around 39 per cent of US soybean oil supply will end up going to US-produced biofuels.
But with regards to the sustainability of palm oil, interesting research that appeared at the conference came from Khaled Obaideen at the University of Sharjah in the UAE.
Obaideen developed a methodology for measuring the sustainability of different vegetable oils based on the UN Sustainable Development Goals.
The final research compared 20 different vegetable oils, including palm, soybean, suflower and canola. The project is a unique benchmarking of global vegetable oils at a time when both the supply chain for vegetable oil and sustainability is coming under greater scrutiny.
Although palm oil scored highly in SDG categories for reducing poverty and hunger, the overarching message from the work is the significant contribution that all vegetable oils make towards food security across the globe.
Finally, the presentation from Suresh Motwani at Solidaridad underlined a key message from palm oil producing countries to the European Union and other Western countries: Ensure that measures to avoid imported deforestation, do not unintentionally exclude smallholders. This is arguably the largest threat to the prosperity created by palm oil today.
Indeed, the message throughout all presentations was that there is significant room for greater cooperation between palm oil producers and vegetable oil producers around the globe. Greater cooperation through knowledge sharing and broader communication will only put the vegetable oil industry in a stronger position going forward.