Companies act on palm oil concerns

Supermarkets and producers are sourcing sustainable palm oil following the ecological fall-out over its cultivation.

In July, trading volumes and prices for Malaysian palm oil futures rose when Malaysia and Indonesia agreed to commit 6m tonnes of palm oil a year, amounting to about 40 per cent of their annual output, as feedstock for the production of biofuels. However, the international biofuels market is still in its infancy. Some observers think the recent price rise is based more on sentiment than on the reality of biofuel consumption.

Whatever the reasons for it, the rising price of palm oil creates problems for those aiming to conserve virgin forests in south-east Asia. Green groups say the high value of the crop has spurred farmers in the region to bring more and more land under palm oil cultivation.

Financial Times Deutschland