This one from Mongabay.com and the Jakarta Post. It would almost be humorous, if it weren’t so pathetic. After years of so-called ‘greenwashing’ tactics to downplay the environmental degradation caused by expanding oil palm plantations (see also related post here), falling world palm oil prices may just be the thing needed to curb the greed. As a side note, I recently visited China and now realise where a good proportion of the oil palm is going – while the food was fantastic, the amount of oil used in almost everything is a bit over the top. For a ‘developing’ nation, there sure were quite a few fatties on the street. Convincing China to eat less oil will also reduce demand for oil palm and save SE Asia’s dwindling biodiversity.
The agricultural ministers for both countries [Indonesia and Malaysia] agreed to initiate a 300,000-hectare replanting program that will replace aging trees with seedlings of higher-yielding varieties. The seedlings will begin to bear oil palm fruit “fresh fruit bunches” for harvest in three to four years’ time.
“Demand is projected to slow down in every sector next year as a result of global recession. We’re preventing a possible oversupply of palm oil that may occur next year by replanting trees,” Achmad Mangga Barani, the director general for plantations for Indonesia’s Agriculture Ministry, was quoted as saying. “This hopefully will help boost the palm oil price to a normal level — at around US$700 to $800 per metric ton.”
Palm oil prices in Malaysia have fallen from more than $1200 per ton earlier this year to a three-year low of around $376 per ton on Oct. 28. Palm oil prices have lately moved in step with the price crude oil, which has also rapidly retreated from recent record high nominal prices.
The decline in palm oil prices is expected to slow expansion of oil palm plantations in Indonesia and Malaysia, a development that will please environmentalists who blame the palm oil industry for large-scale destruction of rainforests across Southeast Asia.
The new plan calls for replanting of 50,000 hectares in Indonesia and 250,000 in Malaysia. Indonesia, which has significantly lower palm oil yields than Malaysia due to marginal oil palm varieties and fewer industrial producers, will aim to replant 125,000 ha by 2011.