Tuesday, November 4, 2008

New developments for Palm Oil - RSPO & Biodiesel

Recently new developments were made for the palm oil industry which will enhance the value of palm oil and to sustain the palm oil industry for many decades to come ie. RSPO & mandatory use of biodiesel.

RSPO - Introduction

Vegetable oil production around the world totals 95 million tonnes per year, of which over 28 million tonnes are produced by the oil palm, the world's second largest oil crop after soyoil.

Palm oil is an important and versatile raw material for both food and non-food industries, which contributes to the economic development of the producing countries and to the diets of millions of people around the world. Although palm oil is entirely GM free and has the highest yield per hectare than any oil or oilseed crop, it is recognized that there are environmental pressures on its expansion to eco-sensitive areas, particularly as oil palm can only be cultivated in tropical areas of Asia, Africa and South America. It is vital that production and use of palm oil must be done in a sustainable manner based on economic, social and environmental viability. The role of RSPO is to promote sustainability in our palm oil industry.(source - http://www.rspo.org/)

RSPO Certified Palm Oil

RSPO Certified Palm Oil is now introduced and the first shipment has already left from Malaysia to EU, arriving Nov 11, 2008. Palm Oil certified by RSPO also gives a 10% higher value compared to normal CPO price.

Mandatory use of Biodiesel by Govt

What is Biodiesel? Biodiesel is an alternative fuel for our diesel cars which is environment friendly. It has 0% carbon dioxide emission, 50% less co emission and almost 0% other forms of emission & can be blended directly into our diesel cars without any change of engine parts.

In Malaysia our govt has recently imposed a mandatory use of biodiesel starting with govt. vehicles and full nationwide implementation by 2010. The result is that 500,000 tons (approx 30%) of our palm oil production will be used for our local consumption alone.

Impact of new developments on Palm Oil demand & CHGS

With the introduction of RSPO & mandatory Biodiesel, our palm oil industry will have many decades of sustainability besides its other major use ie. vegetable oil for consumption. With 6.5 billion population growth yearly the demand for palm oil for food as well as non-food industry will continue to increase every year & with biodiesel getting more widespread usage, our palm oil farmers and owners of today will be the oil tycoons of tomorrow. As long as more people need to eat and use vehicles, there will be more demand on palm oil.

For CHGS investors, we stand to reap the benefits of the increased demand for palm oil the price our our land. With more demand on palm oil land vs land scarcity, the price of palm oil land also appreciates.

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