Is the palm oil industry going up in smoke as market forces and environmental concerns collide?
- Malaysia and Indonesia are grappling with an impending European Union ban on palm oil in biofuel combined with uncertain demand from the food industry, declining global oil prices and questions about the credibility of ‘sustainable’ plantations
The setting should have been one of pure, unadulterated, luxury – walking down from my poolside room at one of my favourite hotels, the Goodwood Park in Singapore, dropping my towel and slipping into the pool to swim lazy laps surrounded by tropical plants.
In Singapore, families were pulling their children out of school and racing over the causeway up to smoke-free Kuala Lumpur. The nearby Malaysian states of Muar and Ledang had declared states of emergency.
When officials in Singapore and Malaysia protested to the Indonesian government, officials in Jakarta told them to stop being childish. No one mentioned that most of the plantations ablaze were actually owned by Singaporean and Malaysian investors, who control about two-thirds of the palm oil plantation sector.
The deep irony of that smoggy stopover in Singapore was that I was en route to Medan for Asia-Pacific Economic Cooperation meetings, where our Indonesian hosts were insisting that palm oil should be included in the Apec list of “environmental goods” being drawn up that would be traded with tariffs no higher than 5 per cent.