Here’s a scan of some news and issues that have caught the attention of palm oil watchers, in the last three weeks! We mostly pick up on things on Twitter/X. Come here for more, https://x.com/khorreports.
EUDR. A hot topic amongst regulators and market players, we have argued it would be a two year muddle-through. Maybe for three years, with the one year additional time? Alerts on X (1) and (2). There is positive feedback about enhanced regulations and traceability in the palm and rubber industries, including in Ivory Coast, Malaysia, and Thailand. The regulatory upgrades are being underestimated, while costs may be overestimated. Aida Greenbury praises how cocoa farmers in Ghana are preparing for the EU's Deforestation-Free Due Diligence regulations.
Malaysia’s palm oil consumption has dropped significantly. Diesel consumption in Malaysia is down due to subsidy reforms, but oleochemical exports may gain from Indonesia's export duty adjustments.
News on Indonesia. New data shows an increase in palm oil deforestation in Indonesia in 2022, with no data yet for 2023. The government's Food Estates program faced challenges, particularly in peat areas, due to difficult terrain and market issues. Indonesia's Food Estates project raises concerns about food inflation, with climate change, a weak rupiah, and high imported food prices posing potential risks.
News from India. India's palm oil yields are around 12 tonnes/hectare, lower than major producers like Malaysia and Indonesia. India's vegetable oil imports dropped 30% in September due to lower demand and high prices, following higher imports in July-August.
Palm oil is used in the energy sector and in renewables. Gas oil and Brent crude are key factors for palm oil market watchers. An oil asset map from @SPGCI provides detailed insights into the Middle East. Energy, beyond food and personal care, is crucial for the palm oil sector. The rapid growth of renewables is important. By 2030, solar PV and wind are expected to double their share to 30% of the global power mix, meeting around half of global electricity demand. (Palm oil biomass should count in the dark green “other renewables” segment.) But there’s always a risk of being called out on greenwashing… The UK advertising watchdog ruled Virgin Atlantic’s “100% sustainable aviation fuel” ad misleading and instructed them to clarify the environmental impact in future ads (note: SAF is a technical term and it still contains fossil fuels).
