KUALA LUMPUR - A palm oil industry watchdog will adopt rules next month that will impose fines on consumer goods companies like Unilever and Nestle if they don't start buying more green palm oil to help curb deforestation in South-east Asia, the regulating body said.
Last year, growers produced around 13.5 million tonnes of green palm oil - which costs more to grow and process - but only about half of it was sold at premiums to conventional palm oil. That makes it hard to cover the extra costs of sustainable palm oil, which, according to Simon Lord, chief sustainability officer at Sime Darby, amount to US$8-US$12 a tonne, not including staff expenses.
The rules, to be implemented in November, will require RSPO members who buy palm oil to increase the proportion of their sustainable purchases by 15 per cent every year or face fines and possible suspension from the green initiative body. Part of the problem, the producers say, is that the goods companies buy sustainable oil mostly for products sold in Europe, and not for goods for India and China, the world's biggest palm oil markets and where price drives consumer demand.
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