Greenpalm CSPO premium dives to 30 cents
Greenpalm reports on its website: "GreenPalm passes key milestone as 2 millionth certificate traded... GreenPalm, the certificate trading programme that enables businesses to support sustainable palm oil production, is celebrating the trade of its 2 millionth certificate. This milestone has been achieved in just over two and a half years, enabling palm oil producers to earn over $15m of additional income for operating sustainably."
Greenpalm's market data shows that palm oil certificates last traded at 30 cents and PKO certificates trade at $3.90.
Source: http://www.greenpalm.org/en/home, accessed 6 September 2011.
Khor Reports comment: The 30 cents premium is a big come down from the near USD40 price premium that certified sustainable palm oil (CSPO) first traded at. Arguably, Greenpalm's price is the most important single market indicator for the demand for sustainable palm oil, which is so far only available under the Roundtable for Sustainable Palm Oil (RSPO) initiative. The price collapse, of about 99%, indicates an excess of supply over demand for the RSPO's CSPO. At 30 cents per metric tonne of CSPO, there is scant hope for additional income for those operating sustainably. Most of the largest palm oil growers are heavily committed to RSPO certification and they will be hoping that this lead price indicator picks up. Palm oil sustainability experts often estimate the cost of RSPO certification at USD6-12 per metric tonne for corporate growers. Smallholders have been slower to get onto the programme; growers often say that a fair premium is needed to help this group. Sustainability practitioners point out that it may not be so difficult for this group to participate; but they need a change of mind-set and a dash of pride and hope. Although the market for sustainability seems to deliver a "no" - let's hope that is a temporary message.
Greenpalm's market data shows that palm oil certificates last traded at 30 cents and PKO certificates trade at $3.90.
Source: http://www.greenpalm.org/en/home, accessed 6 September 2011.
Khor Reports comment: The 30 cents premium is a big come down from the near USD40 price premium that certified sustainable palm oil (CSPO) first traded at. Arguably, Greenpalm's price is the most important single market indicator for the demand for sustainable palm oil, which is so far only available under the Roundtable for Sustainable Palm Oil (RSPO) initiative. The price collapse, of about 99%, indicates an excess of supply over demand for the RSPO's CSPO. At 30 cents per metric tonne of CSPO, there is scant hope for additional income for those operating sustainably. Most of the largest palm oil growers are heavily committed to RSPO certification and they will be hoping that this lead price indicator picks up. Palm oil sustainability experts often estimate the cost of RSPO certification at USD6-12 per metric tonne for corporate growers. Smallholders have been slower to get onto the programme; growers often say that a fair premium is needed to help this group. Sustainability practitioners point out that it may not be so difficult for this group to participate; but they need a change of mind-set and a dash of pride and hope. Although the market for sustainability seems to deliver a "no" - let's hope that is a temporary message.