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‘Wilmar hurting palm oil exports’

KUCHING: MALAYSIA will lose billions of ringgit in palm oil exports should Wilmar International Ltd be allowed to discriminate against Sarawak’s palm oil supply.

Sarawak Oil Palm Plantation Owners Association (Soppoa) strongly rejected attempts by Wilmar, Unilever Plc and World Wide Fund for Nature (WWF) to discriminate against the state’s palm oil supply and, in the same process, jeopardise Malaysia’s palm oil exports.

“We are very disappointed with Wilmar’s unilateral action to discriminate against palm oil harvested from oil palm trees grown on peat soil,” said Soppoa manager Melvin Goh.

“This is not acceptable. It will have a devastating impact on the oil palm industry here, given that Wilmar’s refinery operating under Bintulu Edible Oil Sdn Bhd source 1.7 million tonnes of crude palm oil (CPO) from millers in a year,” he told Business Times yesterday.

The sacrifice of 1.7 million tonnes of CPO at a conservative pricing of RM2,500 per tonne works out to be RM4.25 billion.

In December 2013, well-funded green group World Wide Fund for Nature (WWF) arranged a signing ceremony for world’s biggest palm oil trader Wilmar International Ltd and food giant Unilever PLC to undertake “No Deforestation, No Peat, No Exploitation” in their palm oil trades. 

Although this looks like an ordinary business arrangement, it is actually the start of a stranglehold on plantation companies being coerced into a pathway that will kill the oil palm industry’s growth.

Activists like WWF, Greenpeace and Wetlands International, and their local affiliates, claimed that oil palm planting on peatland causes tremendous pollution in the form of greenhouse gas (GHG) emission when water is drained from the soil. These groups, however, fail to provide any credible scientific evidence to support their allegations.

“It defies logic for Wilmar to surrender to coercion and harrassment. Why should we accept claims that does not have any scientific basis that can be verified?” Goh said.

“Sarawak is Malaysia’s final frontier in oil palm planting. Although Wilmar’s pledge to Unilever and WWF is a business-to business arrangement, this move goes against Malaysia’s national interests,” he said. 

In highlighting the significance of Soppoa’s protest Goh noted the oil palm is an economic security crop for Malaysia and made reference to the annual US$20 billion palm oil exports, which support some two million jobs and livelihoods along the sprawling value chain.

Many assume that Wilmar’s pledge will only hurt the profits of plantation companies and that of oil palm farmers. But it is actually more than that, Goh said. 

“Employees of plantation companies are at risk of not being able to exercise their deserving share options in the stock market if the companies fail to export the critical amount of palm oil and bring in the profits,” he said.

“Apart from small time investors like you and me, there are also pension funds like the Employees Provident Fund, the Armed Forced Superannuation Fund, Kumpulan Wang Persaraan (KWAP) which are heavily invested with plantation companies,” he added.

  1. Goh
    January 19, 2014 at 6:58 pm

    Is Singapore stock-exchange listed-Wilmar really surrendering to the NGO's coercion and harrassment? One of Wilmar's major shareholder is American multi-national Archer Daniels Midland (ADM), one of the biggest subsidy beneficiary under the USA Farm Bill. Over in Europe, ADM also receive subsidies under the EU Common Agricultural Policy. Go to http://farmsubsidy.openspending.org/search/?q=ADM So, is Wilmar really “surrendering” to European's interests when one of its major shareholders receive money from the source (the US and EU governments) that dishes out money to these green activists?

    Incidentally, the US government and the EU government is negotiating the Trans Pacific Partnership Agreement (TPPA) and Free Trade Agreement (EUFTA) with Malaysia.

    Isn't it relevant for oil palm planters and palm oil exporters to have a say at the negotiation table of TPPA and EUFTA?

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