Posts

In what may become big news, the EU is reconsidering whether to allow genetically modified organisms (GMOs). A study – requested by the European Council – argued that GMOs could play a role in the EU’s goal to be carbon neutral by 2050. They could also help the bloc’s Farm to Fork Strategy to make food systems ‘fair, healthy and environmentally friendly.

Rising soybean prices are resulting in a wave of farmer defaults in Brazil, where trade houses are finding it difficult to enforce contracts made when prices were lower. Farmers complain that trade houses are demanding delivery even when they struck a verbal agreement on Whatsapp, over the phone or by email.

High grain prices are impacting global trade flows. US chicken producers are buying Brazilian soybeans, and Brazilian chicken producers are buying corn from Argentina. Meanwhile, animal feed producers worldwide are increasing their wheat purchases.

Rising prices and disrupted trade flows may be bad news for the world’s consumers, but they boost revenues for the world’s trade houses. ADM’s quarterly profit to end March jumped 76 per cent on last year; their oilseed crushing unit saw a record quarter. As ethanol prices have risen, ADM has restarted two dry corn ethanol mills. However, the company has said that it still wants to sell them.

Bunge Ltd reported a 91 per cent rise in its third-quarter profit on strong soy processing margins and robust demand. Bunge agribusiness quarterly earnings more than doubled to $467 million and the company has raised its 2020 earnings outlook from $6.25 to $6.75 per share.

Cargill’s Brazilian unit has posted a record net profit of more than 2.1 billion reais ($385 million) and revenue of 68.6 billion reais for last year.

The French cooperative InVivo has agreed to acquire family-owned Soufflet in a deal that will create one of Europe’s biggest agricultural businesses. The takeover could be completed by the end of 2021, subject to regulatory clearance. InVivo’s CEO said he wants the combined company to be able to compete with global crop merchants.

State-owned Saudi Grains Organization (SAGO) – one of the world’s biggest buyers of wheat and barley – is preparing to sell some of its grain silos as part of the country’s privatization programme.  The company has 3.3 million tonnes of grain storage. SAGO sold its flour mills last year for about $1.5 billion.

Still on company news, Olam International has acquired California based spices and seasoning business Olde Thompson for $950 million.

Although container rates peaked in late 2020 – and have been relatively stable in 2021 – they are now heading higher again. Analysts warn that they could rise further as the world’s economic recovery gathers steam.

Meanwhile, Cargill has cut nearly 1.5 million tonnes of gross carbon emissions from its shipping fleet since 2017. Cargill’s gross CO2 emissions fell to 7.102 million tonnes in 2020 from 7.732 million tonnes in 2017. The company charters between 600 to 700 vessels each year.

Low water levels in the Parana and Paraguay rivers are leaving barges grounded and disrupting shipments. Water levels in the port of Rosario are forecast to drop to about 1.17 metres this week versus an average for this time of the year of 3.58 metres.

Drought is also affecting river levels in the north of the continent. More than 15 million salmon raised at hatcheries in California’s Central Valley will hitch a ride to the Pacific Ocean in about 146 trucks. Following two years of drought, water levels in the state’s rivers are too low for the salmon to make the journey alone.

There was further bad news for fish lovers this week when we learned that wild salmon are getting smaller, apparently because they’re returning from the ocean at a younger age, with climate change and overfishing possibly to blame. As a result, Whole Foods has reduced its salmon buying size guidelines.

But, to curb overfishing, the World Trade Organization has said that it is accelerating an effort to end the $22 billion in government subsidies that support fishing industries worldwide. The new WTO Director-General has made the issue her top priority and has called a conference for July to discuss the issue.

But it is not just fish that are in difficulty; America’s bees are also under pressure. American beekeepers have filed a suit against the country’s honey importers, claiming that fake honey from Asia is pushing American beekeepers out of business. Honey is the most adulterated food after milk and olive oil.

Tyson Foods has launched a range of vegan meat products, joining other meat companies in the rapidly growing market for alternative proteins.  Consulting firm Kearney has forecast that meat demand will peak in 2025 and that the alternative protein market will grow to $450 billion by 2040, a quarter of the $1.8 trillion meat market.

However, a survey of 1,000 adults found that 73 per cent of Australian men would prefer to reduce their life expectancy by ten years rather than stop eating meat. The survey also found that 79 per cent of Australian men say they would not eliminate meat from their diets to help reduce their carbon footprint.

Meat is fast becoming a politically partisan issue in the US. Contrary to some media reports, President Biden will not limit meat consumption – or force you to drink ‘plant-based beer’. However, it appears the meat wars are only just beginning.

Finally, there was an excellent article in the FT this week about corruption in the commodity sector. It focuses on the energy and metals sectors, but it is still worth a read.

© Commodity Conversations ®

With wheat prices soaring, Bioceres, an Argentinian company, hopes that the world will change its mind about genetically modified wheat. Consumers have accepted genetically modified soybeans and corn, mainly because they are fed first to animals. Still, they have pushed back on genetically modified wheat, possibly because we consume it directly. Brazil’s government is due to vote next month whether to allow GM wheat; if it does, Bioceres will have its first market.

Rising vegoil prices, along with the US’s planned expansion in renewable diesel, are encouraging traders to expand their processing capacity. Cargill has announced that it will build an additional canola-crushing plant in Canada, adding one million tonnes to its Canadian capacity. Viterra has also announced that it will have a new canola plant up and running by 2024. Cargill is also investing directly in the production of renewable diesel with a new plant in Hastings, Nebraska, a joint venture with the Love group of companies.

We reported last week that skyrocketing corn prices have led to (perhaps overly optimistic) suggestions that China’s livestock farmers could replace imported corn and soy with domestically produced grains and oilseeds. This week, the Chinese government, concerned about a recent uptick in African Swine Fever, has announced new rules that control the movement of live hogs within the country. They could completely reshape the domestic pig-rearing industry.

But it is not just the domestic hog market that China is reshaping; COFCO’s growing importance in China’s imports is reshaping the competitive landscape for global grain traders.

Closer to home, Nestlé published its strongest quarterly results in a decade, primarily driven by solid demand in coffee. While presenting the results, the company’s CEO put a strong emphasis on sustainability, arguing that consumers now insist on it. Putting words into action, Nestlé confirmed that it is joining LEAF – the Lowering Emissions by Accelerating Forest finance Coalition – a public-private project that aims to raise at least $1 billion in initial financing to reduce or reverse deforestation.

Meanwhile, Nestlé has confirmed that it is in discussions to buy US-based nutritional supplement maker The Bountiful Company.

Not everyone is as bullish on coffee demand as Nestlé. Neumann, the world’s biggest coffee trader, expects demand to remain under pressure as Covid lockdowns come and go. There is, however, hope for coffee-lovers. A new wild coffee variety has been discovered that grows in warmer climates and is less vulnerable to climate change. It also, apparently, tastes delicious.

Still looking to the future, New Food Magazine has made some predictions about agricultural supply chains. They will increasingly be driven by data and technology, with a strong dose of transparency thrown in. Neither snack foods nor pet foods will be excluded from these trends.

Trade houses continue to adapt accordingly. This week, ADM opened a new plant-based food innovation laboratory in Singapore while Cargill announced an investment in Bflike, a Dutch start-up in plant-based meat and fish alternatives.  Even Epicurious, the online food magazine, made headlines (and undoubtedly some enemies) when they announced that they would no longer publish beef-based recipes.

© Commodity Conversations ® 2021

This is ECRUU’s last Commodity Conversations media report. 

Thank you to all of you who have supported and read this report over the last 5 years. We have decided to focus all our energy and attention on exciting developments for our core products (sugar & ethanol media monitoring – check it out here). 

Make sure you follow commodityconversations.com to continue receiving insights and updates on sustainable agriculture. 

Bad weather conditions around the world are threatening to tighten grain stocks which are already at their lowest in the past five years. Brazil’s corn crop is at risk because of the dry weather, a cold wave destroyed seedlings in Europe and now the US Midwest is expected to suffer from abnormally cold and dry weather over the next few days. Demand has been increasing at the same time and governments are now looking to control food inflation. For one, Brazil announced that the suspension of corn import duties, among other grains, had been extended until the end of the year.

China issued new feed guidelines in response to the rise in grain prices which could have long-term repercussions on global trade flows. The directive recommends that livestock operators reduce the amount of corn and soybeans used and replace them with cheaper alternatives, such as rice, cassava, barley, rapeseed meal, cottonseed meal or peanut meal. Some doubted whether this would actually change consumption patterns as cost will remain the main factor. One analyst also noted that soybeans and corn maintain a significant supply advantage as “the volume of soybeans the US can load in a single day is larger than the yearly global export volume of cottonseed meal”. 

New data revealed that consumers globally cooked and baked more during the pandemic as global grocery sales were up 10% in 2020. The data highlighted some regional differences, such as alcohol sales which grew 20-25% in Western Europe and Latin America but dropped 10% in Asia. In the UK, consumers are also focusing on their health as the sale of berries remains higher than usual. A researcher noted that shoppers were no longer focusing on calorie count but on holistic health and the importance of nutrients.

Nestle saw its strongest quarterly sales growth in a decade in the first quarter thanks to the rise​_ in at-home coffee consumption. Dairy and pet food sales also reported strong growth, while the firm expanded its ecommerce and health science portfolio. In contrast, Danone witnessed a fall in sales in the first quarter. Essential dairy and plant-based foods sales were up but not enough to offset the poor performance of the bottled water and special nutrition segments. 

The EU’s agriculture commissioner expressed his support for a citizens initiative called “End of cage age”  which seeks to ban the use of cages to improve animal welfare. The petition gained 1.4 million signatures and the commissioner said he would now work on drafting legislation. In response, the livestock industry argued that oversimplifying the concept of cages could actually have negative consequences. The idea that “all enclosures are inherently bad for animals” overshadows the complexity of animal welfare and the specificity of certain animals. Instead, animal well-being has more to do with “housing parameters, enrichments, animals’ ability to move freely, the risk of injuries and diseases”, according to the livestock industry. 

Major food firms are also worried that the EU will vote in favour of new restrictions on the marketing of plant-based meat alternatives. Under the proposal, plant-based products will not be allowed to be marketed as dairy alternatives. Nestle would have to rebrand its Almond Latte which is marketed as a “delicious alternative to dairy” and some worry that soy drink makers will even have to change their packaging to avoid comparison to milk cartons. 

Oatly argued that the proposal would place unfair restrictions on plant-based products and hinder the effort to decarbonise food production. Otherwise, the firm officially filed documents for an IPO in the US. The papers revealed that Oatly’s loss widened to USD 60.4 million in 2020. Meanwhile, the sector is due to get more crowded with the launch of Coca-Cola’s Simply Oat drink. And the world’s largest meat supplier, Brazil’s JBS, announced the acquisition of Vivera BV, Europe’s third-largest plant-based food producer. The Dutch firm was acquired for USD 408 million.

After years of debate on the proper ratio of cow to goat milk in halloumi, the EU granted the cheese a protected designation of origins (PDO) status. Perhaps surprisingly, the decision could potentially have geopolitical implications and help with the reunification of Cyprus. The documents also recognised hellim, the Turkish word for the halloumi produced on the Turkish enclave on the island. The local community is now calling for a new production control mechanism that would involve both the Cypriot and Turkish communities. 

This summary was produced by ECRUU

Sri Lanka banned the import of palm oil, effective immediately. The President instructed local palm oil companies to uproot their crops. His goal is to make the country palm oil-free and address deforestation. Coconut plantation owners were also told to progressively change crops. Farmers were advised to plant “rubber or other environmentally-friendly crops” instead. 

The country used to import most of its palm oil from Malaysia but the amount was too small to have a significant impact. Instead, palm oil prices grew last week amid a strong demand from India, Europe and Africa. The global vegetable oil supply is also expected to be tight as US farmers might plant fewer soybeans than expected. 

Global grain markets could be upended again with the resurgence of African swine fever in China, where 20-25% of the pig population in the north was reportedly lost. Local sources claim that the government is underreporting cases which have risen in the first quarter of 2021 because of the cold weather, a high density of new pig herds and new strains. The disease killed 50% of the country’s hog population in the first year after it was discovered in 2018.

Malaysia’s palm oil estates have been able to deal with the strong growth in demand thanks to huge improvements in yields. New research, however, argued that improvements in yields are being slowed by the changing climate. Farm productivity would be 21% higher when compared to 1961 if it wasn’t for the warming climate, the study claims. Ironically, one of the major culprits of global warming is the agricultural sector and its drive to boost productivity. Researchers suggested that farmers should aim to improve yields without relying on more inputs like land or water. 

The increasing prevalence of droughts, floods, heat and cold waves is also leading to more crop failures, according to another recently published paper. Europe lost 2.2% of its crop production in 1964-1990 because of extreme weather events, while losses in 1991-2015 were almost three times higher at 7.3%. Some crops, like cereals, are much more vulnerable because they are less likely to be irrigated. Nonetheless, average yields in Europe still increased by 150% between 1964-1990 and 1991-2015.

While a growing number of meat and dairy companies announced pledges to reach net-zero emissions, a paper from New York University noted that most firms still have no climate policy. And it argued that the pledges made so far are often inadequate. They do not contain details and focus mostly on carbon dioxide without addressing methane or land-use change. The paper also highlights the lobbying efforts by agricultural producers to fight climate change policies. The money spent to influence policy often exceeds the amounts paid by fossil fuel companies, although they come under less scrutiny. 

Consumers could help accelerate the switch to a sustainable agricultural supply chain as the food industry is catching up with the world of big data to quickly respond to consumer preference. Food producers used to lack information on customer purchases but the rise in delivery and direct-to-consumer sales is making large food firms much more responsive. Kraft Heinz, for example, launched a larger portion size for its mac and cheese only a few months after people started asking for it on social media. 

Evidence suggests that consumers are already buying more products they believe to be environmentally friendly. A survey of 42,768 shoppers found that they would choose a product with an ecolabel – like Rainforest Alliance or Certified Carbon Reduction label –  79% of the time. Income, age or education were not factors in purchases, although women were more likely to choose goods with ecolabels. However, not all ecolabels are strictly regulated or transparent. The industry should work on labels that “capture a product’s full environmental impact from farm to fork”, researchers suggested. 

Despite the huge amount of money invested in plant-based meat alternatives, the consumption of meat in the US is actually still increasing, according to USDA data. The per capita consumption of chicken, pork and beef were all up in 2020 when compared to 2016. 

Restaurants and investors have been experimenting with new kitchen concepts during the pandemic, like ghost kitchens that rent out space for cooks to make internet-only restaurants. A journalist discovered a new phenomenon when investigating a series of listings on delivery apps. Some restaurants are selling their menu items as if they came from different restaurants. The concept is being pushed by Future Foods – a unit of CloudKitchen which was created by the Uber cofounder – and relies on very flashy marketing. Some of the items were sold under restaurant names like Pimp My Pasta, Cheeky’s Cheesesteaks or OMG BBQ LOL. 

This summary was produced by ECRUU

Cargill officially exited the world of sugar trading this week. It confirmed earlier talk that it was selling its stake in Alvean, the Joint Venture (JV) with Brazilian sugar giant Copersucar which deals with a fifth of the global sugar trade. Cargill said the sale was part of a wider portfolio review that will see it remain in the business of sugar ingredients but focus on its core agriculture businesses. 

Louis Dreyfus continues to have a sugar trading unit but announced it was selling its US-based Imperial Sugar business to US Sugar, just a month after announcing the sale of its Brazilian unit Biosev to Raizen, the JV between Cosan and Shell. Cosan’s CFO said that the acquisition of Biosev will boost the value of Raizen ahead of an upcoming initial public offering (IPO) and would attract so-called green investors given the ethanol angle. Sources estimated the IPO could raise BRL 13 billion (USD 2.25 billion). Raizen and its joint venture with Wilmar, RAW, exported 5.49 million mt of Brazilian sugar in 2020, Brazil’s biggest sugar exporter. Alvean came second with 4.8 million mt, followed by Louis Dreyfus with 3.86 million mt. 

The consortium of NGOs Chain Reaction Research accused Bunge of being the biggest buyer of soybean from deforested land in Brazil’s Cerrado in 2020, equivalent to 131.5 sq km. The second position went to Cargill but for an area 12 times smaller. The report conceded that the deforestation was not illegal as farmers in the Cerrado are allowed to deforest 80% of their land, compared to 20% in the Amazon. However, it argued that consumers were increasingly concerned about deforestation, regardless of whether it is legal. 

Sourcing deforestation-free soy is an increasingly big headache for the global aquaculture industry. The US Soybean Export Council (USSEC) said “There are no viable alternatives to soy that can provide the volume of protein needed in [farmed fish diets] to keep up with increasing demand.” Cargill’s new chief sustainability officer suggested that US soybean could step in as part of the solution. The USSEC estimated that, in terms of land use change, US soybean has a 319 times lower impact on the climate than Brazilian soybean. Cargill added, however, that it was necessary to source from various origins to ensure supply chain resilience. Besides, an official from ProTerra argued that it made more sense to focus on spreading sustainable agriculture practices everywhere instead of switching origins. 

ADM forecast that US demand for soybean oil could surge by 500 million pounds (227,000mt) in 2021 due to the increase in renewable diesel production capacity fuelled by government incentives. Additional demand could reach 15 billion pounds (6.8 million mt) within the next 4 years. According to Bloomberg, many of the biggest agricultural traders, from Cargill to Bunge, are investing in boosting their soy crushing capacity in anticipation. Bunge, however, said it was being careful about investments in case the bubble bursts. 

A new study found that 64% of the world’s agricultural land was at risk of pesticide pollution, while 31% was estimated to be at high risk. Farmers are the first affected, with 44% of farm workers globally experiencing at least one accidental pesticide poisoning every year, according to a recent meta-analysis. One of the researchers involved argued that the relatively low immediate fatality rate from the poisoning concealed chronic diseases and the farm productivity lost due to illnesses. The analysis noted that, over the last 35 years, the use of pesticides had increased by 81% globally. The growth has been uneven, from a 500% increase in South America to only 3% in Europe. 

European Union agricultural stakeholders, however, are worried that EU restrictions, such as those on gene editing, will delay innovation. Several MEPs argued that implementing new restrictions on farmers, including environmental restrictions, in the absence of viable alternatives would threaten the bloc’s competitiveness and farmers’ economic survival. On the other hand, the European Commission said it is planning to incentivise organic aquaculture which can “help meet consumer demand for diversified high quality food produced in a way that respects the environment and ensures animal welfare.”

This summary was produced by ECRUU

The UK’s Food and Drink Federation (FDF) said exports to the EU dropped by 75% in January, when compared to December, because of Brexit. Nonetheless, a UK minister claimed that trade flows had returned to normal levels in early February. A House of Lords sub-committee seemed to disagree, however, as it noted that non-tariff barriers would continue to slow trade for a while. Exporters now have to deal with more paperwork which increases costs. Moreover, the UK delayed the implementation of customs checks for EU imports until October. As a result, the FDF warned that the “full impacts of the end of the transition on imports from the EU will not be seen until 2022.”

In China, meanwhile, COFCO is working on merging its domestic units with COFCO International ahead of a potential Initial Public Offering (IPO), sources suggested. The IPO, estimated at USD 5 billion, could happen later in 2021 or at the start of 2022. The new entity would be key to China’s food security, while the unit handled over 100 million mt of commodities in 2018, generating USD 31 billion in revenue.

The global availability of containers remains tight following the surge of imports from China, but Moller-Maersk suggested that the situation should return to normal in the first half of the year. The lack of containers is already leading to supply issues, however, as coffee stocks in the US are reportedly running dry. The shortage might also be due to a fall in output in Brazil, while a broker commented that the coffee market could be entering into a structural deficit. 

The blockage of the Suez Canal caused by the Ever Given container ship could potentially add even more delays to global shipments. Some 12% of global trade passes through the canal and hundreds of ships are currently waiting for the vessel to be moved. Tug boats could free the ship within the next few days which would minimise the impact, although a delay of a week or more would have major implications. 

As if the situation wasn’t complicated enough, the number of containers that fell off cargo ships surged since November 2020, with 2,980 containers lost, more than twice the annual average. Shipping firms blamed the bad weather and storms. Experts, however, explained that the container shortage pushed companies to use older vessels and to pack them as much as they can which increased the risk of losses. A company that lost containers mentioned that “if anybody has investments in deep-sea salvage, there’s some beautiful product down there”.

A new study published by the FAO this week estimated that global food production was responsible for 34% of total greenhouse gas emissions in 2015, down from 44% in 1990 but much higher in absolute terms. Out of the total, 71% of emissions came from the farm and land use, while the other 29% came from distribution. Researchers hope the study will help design mitigation measures to make our food more sustainable. Danone already acknowledged the report and highlighted its own efforts to reduce its environmental impact. 

Danone’s former chair and CEO was focused on purpose-driven capitalism but a small investor was able to push for his removal based on his governance and financial performance. Bluebell Capital was able to form a consensus among large shareholders to replace him. Activists investors are reportedly ready to push for changes again after a pause during the pandemic. For one, Robeco Institutional Asset Management, which manages USD 2.4 trillion in assets, is pushing for changes to the EU’s CAP. The revised program needs to account for climate targets when calculating payments, the group argued. 

Another report published this week suggested that Europe and North America will reach peak meat consumption by 2025. Alternatives, such as plant proteins or cultured meat, will continue to improve while consumers’ preference will keep shifting towards healthier and more sustainable products, the paper suggested. The alternative meat market should reach USD 290 billion by 2035. 

Investors certainly believe in the future of alternative meat products, as Eat Just just raised a further USD 200 million, bringing total investments to USD 650 million. The group makes egg alternatives using plants and cultivated meat. Similarly, Meatable raised USD 47 million this week. The group cultivates meat without using the controversial fetal bovine serum, although the process currently costs USD 10,000/lb. 

Being stuck at home has changed the eating habits of many people but this journalist discovered that eating three meals a day is not actually based on nutritional or biological science. Eating three meals a day is a recent consequence of industrialisation and nutritionists suggest that eating when you are hungry instead of at meal times can be just as healthy, as long as the total quantity of food remains more or less constant. The journalist took this to heart to continue having his one Big Meal per day. 

This summary was produced by ECRUU

During an industry event focused on the hidden costs of our food system, the head of the Global Alliance for the Future of Food said the current metrics used to measure productivity in agriculture, such as yield per hectare, were problematic. He argued that they hid the environmental and health costs, such as soil erosion and water contamination. Instead, the Alliance is working on “true costs accounting” (TCA) which includes all hidden costs. A professor said disclosing the TCA would help consumers and the whole supply chain make better-informed decisions and bring to light the true costs of their choices. 

The panellists agreed that it was important to focus on “regenerative and restorative practices on soil” as well as on agroecology. Bill Gates and the head of Impossible Foods, however, argue for a different approach. They suggested that genetically modified seeds and chemical herbicides used right would be much more effective at cutting carbon emissions when compared to organic farming which, they argue, is too land-intensive. 

An analysis by The Guardian Seascape found that over one-third of seafood products could be mislabelled globally. The study, based on DNA technology, found the highest amount of wrong labels in the UK, Canada and the US. Expensive seafood products were often mislabeled and contained a cheaper alternative, such as labelling shark catfish as cod or haddock. In some cases, wrong labels concealed endangered or illegally caught species. The worst cases were prawn balls sold in Singapore and China that contained pig elements as well as the pufferfish family – which is known to be potentially deadly. The situation is particularly bad in restaurants with numbers showing that one-third of European restaurants sold mislabelled seafood. 

The huge transhipment involved in the supply chain makes it prone to mistakes but the data suggests that most of it is clear fraud. It is so profitable, in fact, that the supply chain is rife with organised crime. The head of a DNA lab analysis said that you could make CAD 1 million (USD 800,000) in profit by labelling a container of pangasius catfish as red snapper. Risks are low, with very few checks and a fine that wouldn’t cross CAD 50,000 (USD 40,000). 

The most profitable, apparently, is eel which can be worth more than gold. Eels are in high demand in Asia but don’t breed in captivity, making them impossible to farm. There is very little Japanese eel left, pushing buyers further and further away looking for American or European eels instead. Despite export bans, this has led to overfishing and endangering the eel population in several places around the world. One woman involved in the business said eels were “the ultimate black box of global seafood,” in other words, impossible to trace without a DNA test. That’s why conservationists and sustainability groups are pushing for increased use of DNA tests. 

In Canada, Organic Ocean is using a sort of DNA barcode system to identify living species, with which they created an independent authentication programme that goes as far as revealing the product’s river of origin. It works better than blockchain, which fails if the fish has been wrongly labelled from the start. Overall, however, industry stakeholders lament that there seems to be limited interest both from consumers and governments to push for a more transparent seafood supply chain. A researcher in South Africa noted that “many people know, and care more, about the provenance of the wine they drink than the seafood they eat.”

Palm oil giant Sime Darby put together an Expert Stakeholder Human Rights Assessment Commission on March 1 in a bid to address allegations of forced labour that led the US to ban palm imports from the company back in December. However, one of the commission’s NGO members already resigned and another is threatening to follow suit in response to Sime Darby’s decision to sue anti-trafficking group Liberty Shared. The court case goes against the intention of the commission, one of the commission’s members said. 

A study in Indonesia’s West Kalimantan found that two-third of the land conflicts involving palm oil companies and locals remained unresolved even after over a decade. The study found that governments support companies over locals, sometimes disregarding court rulings. Besides, most disputes are not submitted to certification bodies like the Roundtable on Sustainable Palm Oil (RSPO) because the procedure is said to be too complicated and locals have limited trust in them. 

This comes as Greenpeace published a new report in which it argues that sustainable certification processes overall fail to stop the destruction of forests and the ecosystem. Instead, Greenpeace urges governments to get companies to prove that their supply chain is free from deforestation. While the Palm Oil Monitor complained that the report unfairly focused on palm oil, several sustainable certifications actually agreed with Greenpeace, such as RSPO and the Round Table on Responsible Soy Association (RTRS), both of which stated that certification was only one part of the solution.

This summary was produced by ECRUU