Will palm oil survive climate change? By Datuk Dr Ibrahim Ahmad Bajunid | iabaiw@yahoo.com Writer is a deputy vice-chancellor, INTI Laureate International University Read more: Will palm oil survive climate change?

  By Datuk Dr Ibrahim Ahmad Bajunid  | iabaiw@yahoo.com 


Writer is a deputy vice-chancellor, INTI Laureate International University 

Read more: Will palm oil survive climate change? - Columnist - New Straits Times http://www.nst.com.my/opinion/columnist/will-palm-oil-survive-climate-change-1.351951#ixzz2errZsaKd

WORLD leaders met again in Rio de Janeiro, Brazil. This samba capital of the world hosted a global discourse on the fate of the planet.

The first meeting there was held 20 years ago. The subject matter remained the same. What do we do about the state of the world environment, which is increasingly under threat?

And, the threat is by us, men. Dubbed Rio+20, the meeting proved to be another platform for protests and pledges. Orators as usual had world attention with their rhetoric. Some were even repeats of the last meeting because, admittedly, nothing much has changed. Will Rio+20 be a turning point for the world? Or will it be another merry-making event?

The world climate is definitely changing. The evidence is convincing. The trend in rising global temperatures can no longer be disputed. Melting of the Arctic ice is real. And, extreme weather conditions have been occurring at disturbing regularity. Sadly, global greenhouse gas emissions have not come down. Despite various attempts, international agreements on the mechanisms have not been successful. But, one encouraging development is that more are now convinced that man is responsible. Earlier sceptics have literally disappeared.

Climate change is bound to impact on oil palm. This is worrying. With the rise in temperature, incidences related to water stress may become more prevalent. During times of drought, oil palm yield suffers significantly. This has become evident during the many El Nino periods when water scarcity hit the oil palm sector. Unless something is done to develop a drought-resistant variety, the supply of palm oil for the world market will come under intense pressure. But, climate change is not just about dry periods. The highly uncertain and extreme nature of climate is another common feature. In the case of oil palm, unusually long periods of flooding have also negatively impacted on the supply because of harvesting difficulties.

Destruction of biodiversity is another issue of climate change. It has also become a growing concern of the palm oil industry. Already, some markets are taking potshots, blaming palm oil for the loss in tropical biodiversity through deforestation. They are coming out with all kinds of import restrictions on palm oil.

Greenhouse gas emission is the common criteria used. While the importing countries show palm oil failing to meet the minimum emission levels, the assessment by palm oil exporters shows otherwise. There is a need to come together to agree on the method of assessment.

What is needed is a more comprehensive study. It would be a pity if palm oil is wrongly judged. There is no doubt the growing world population will need more food. Oils and fats are important in man's overall nutrition. In fact, food will not taste as good without fats. In Malaysia, fried kway teow would not taste the same. In South Asia, what would happen to the taste of briyani?

While the world needs more oil, the land to grow them is growing scarce. Climate change is going to make it worse. For example, rain-fed oilseeds region of India is now under intense pressure because of the changing monsoon patterns. But, oil palm offers the best option because of its extremely high yield. In fact, there is potential to increase it further with recent advances in palm oil genomics.

As an important world resource, it is clear that oil palm is not spared from the rigours of climate change. It can be concluded that palm oil will be impacted on both the supply and demand sides.

On the supply side, yield will suffer because of climate-induced water stress situation.

On the demand side, palm oil may be misjudged on its true contribution to climate change and may be wrongfully penalised. Unless these issues are addressed, they will upset the supply and demand equation for palm oil. Its price movement may become volatile, which is not good for both suppliers and buyers of palm oil. But, of more concern is that the world may be denied the benefits of a highly productive oil source! Will it survive?

Read more: Will palm oil survive climate change? - Columnist - New Straits Times http://www.nst.com.my/opinion/columnist/will-palm-oil-survive-climate-change-1.351951#ixzz2errM6gy6

Palm Reserves Climbing as Production Expands for Sixth Month By Ranjeetha Pakiam September 06, 2013 6:59 AM EDT

Palm oil stockpiles probably increased in August as output in Malaysia, the second-largest producer, advanced for a sixth month to the highest level this year, according to a Bloomberg survey.

Production climbed 3 percent to 1.72 million metric tons from 1.67 million tons in July, the median of six estimates from plantation companies, analysts and traders showed. That would be the highest since December, according to data from the Malaysian Palm Oil Board. Reserves expanded 3 percent to 1.71 million tons, while exports gained 6.3 percent to 1.51 million tons, the survey showed. Imports declined 20 percent to 40,000 tons, according to the median of five estimates. The board will publish the dataon Sept. 10.

Palm, used in everything from candy to biofuel, is produced year-round with supply accelerating in the second half because of growing cycles. While output jumped 18 percent in July from a month earlier, growth in production slowed in August as workers were on leave for the Eid festival, said Abah Ofon, a Singapore-based analyst at Standard Chartered Plc.

“Even if we had to discount the break during Eid, I don’t think we would have seen a huge increase in output,” Ofon said in a phone interview. “One of the things we’re coming to terms with is that we’re not going to see similar expansion in production as we saw last year. Just looking at the way outputtrended in April, May and June, there’s reason to believe that you won’t see a huge spike in the second half.”

Production Flat

Production from April to June fell 1.3 percent from the first quarter compared with a 12 percent surge a year earlier, board data show. Production may be unchanged or slightly lower in 2013 from 18.8 million tons last year, said Ofon.

Palm oil for November delivery climbed 1.3 percent to close at 2,444 ringgit ($735) a ton on the Bursa Malaysia Derivatives. Prices gained 7.5 percent in August, the biggest monthly gain since December 2010, supported by a rally in soybeans on concern hot, dry weather in the U.S. Midwest would hurt crops. Soybeans are crushed to make a substitute oil.

The median survey estimate for reserves in August was about 19 percent lower than the 2.11 million tons a year earlier, according to board data. End-year stockpiles will not reach the record 2.63 million tons in December, said Ofon.

“While we have a big decline in inventories, I don’t think we’re going to see a huge rally,” said Ofon. “I would expect a slight pullback in prices because demand tends to be relatively weak at this time and we’ll also see an improvement in soybean yields as we head into the harvest in the U.S.”

Diwali Festival

Global palm stockpiles will surge 21 percent to a record 9.7 million tons by the end of 2013-2014, while demand expands 4.6 percent, the least in 12 years, the U.S. Department of Agriculture estimates.

Demand will recover next month as Indiabuys before the Diwali festival which falls in November, said Ofon. Imports by India, the world’s biggest consumer, declined for the first time in three months in July after a slump in the rupee to a record increased costs for refiners.

Inbound shipments of crude and refined palm oils dropped 5.2 percent to 568,254 tons from 599,128 tons a year earlier, the Solvent Extractors’ Association of India said on Aug. 14.

        Aug. 2013 (Survey)   July 2013 (MPOB)   Aug. 2012 (MPOB)
Output         1.72              1.67               1.66
Stockpiles     1.71               1.66               2.11
Exports        1.51               1.42               1.44
Imports        0.04               0.05              0.065
Figures are in millions of tons.

To contact the reporter on this story: Ranjeetha Pakiam in Kuala Lumpur atrpakiam@bloomberg.net

To contact the editor responsible for this story: James Poole atjpoole4@bloomberg.net

0 COMMENTS

AAR Seedling Started Fruiting on the second year

Planted in July  2012. I admit my management was not so good. I did not follow exactly  the guideline on fertilizing due to high fertilizer price.

My oil palm garden located at Kpg Batu Bedang, Mongkos about 85 km from Kuching City. The SEPOM mill located about 10 km from my garden to ensure sustainable oil palm production.