Prospects & Challenges of
Sustainable Palm Oil for China
                    Chen Ying
                     May 6,2011



      China Chamber of Commerce for Imp. & Exp. of
      Foodstuffs, Native Produce & Animal By-Products
Outline of the Draft Report
   Introduction
   China’s Vision and Strategy for Sustainable Development
   Global Palm Oil and China’s Situation
   Sustainable Palm Oil (SPO) Production & Consumption
   Business Case for Production, Procurement and Use of SPO
   Review of Initiatives on Promotion of SPO in China
   Policy Analysis and Recommendations
   Next Steps and Future Work
   Conclusion
Objectives of the FNA/DEFRA/DFID Study

   Provide strategic policy guidance for the
    Chinese government towards the development
    of sustainable palm oil.
   Facilitate the adoption of sustainable trade
    policy with regard to palm oil in the upper
    levels of Chinese government.
   Provide a business case for shifting to
    sustainable palm oil that is relevant for
    Chinese commerce.
Development history of palm oil
Production of world palm oil


    Unit:10,000MT
14,000


12,000


10,000


 8,000


 6,000


 4,000


 2,000


   -
       1980                       1990                           2000                  2009

                    Soybean oil   Palm oil   Rapeseed oil   sunseed oil   O ther oil
Consumption of world palm oil


         Unit:1,000MT
50,000

45,000

40,000

35,000

30,000

25,000

20,000

15,000

10,000

 5,000

   -
       1980                    1990                   2000    2009

                               Indonesia   Malaysia   Other
Changes in Palm Oil Export in the World and Major Countries
Changes in Palm Oil Export in the World and Major Countries




       Unit:1,000MT
   30,000
   28,000
   26,000
   24,000
   22,000
   20,000
   18,000
   16,000
   14,000
   12,000
   10,000
    8,000
    6,000
    4,000
    2,000
      -
            1961

                   1963

                          1965

                                 1967

                                        1969

                                               1971

                                                      1973

                                                             1975

                                                                      1977

                                                                             1979

                                                                                    1981

                                                                                           1983

                                                                                                    1985

                                                                                                           1987

                                                                                                                  1989

                                                                                                                         1991

                                                                                                                                1993

                                                                                                                                       1995

                                                                                                                                              1997

                                                                                                                                                     1999

                                                                                                                                                            2001

                                                                                                                                                                   2003

                                                                                                                                                                          2005

                                                                                                                                                                                 2007
                                                                    Indones ia                    Malays ia                O ther
Changes in Palm Oil Import in the World and Major Countries
Changes in Palm Oil Import in the World and Major Countries




          Unit:1,000MT
 32,500
 30,000
 27,500
 25,000
 22,500
 20,000
 17,500
 15,000
 12,500
 10,000
  7,500
  5,000
  2,500
    -
          1961

                 1963

                        1965

                                 1967

                                        1969

                                               1971

                                                      1973

                                                             1975

                                                                      1977

                                                                             1979

                                                                                    1981

                                                                                           1983

                                                                                                    1985

                                                                                                           1987

                                                                                                                  1989

                                                                                                                         1991

                                                                                                                                1993

                                                                                                                                       1995

                                                                                                                                              1997

                                                                                                                                                     1999

                                                                                                                                                            2001

                                                                                                                                                                   2003

                                                                                                                                                                          2005

                                                                                                                                                                                 2007
                               C hina           India               B anglades h                  P akis tan             Holland              Germ any               O ther
-
                                 1,000
                                         2,000
                                                 3,000
                                                         4,000
                                                                 5,000
                                                                         6,000
                                                                                 7,000
                                                                                         8,000
                                                                                                 9,000
                                                                                                         10,000
                                                                                                                  11,000
                 1991/1992
                                                                                                                     Unit:1000MT
                 1992/1993

                 1993/1994

                 1994/1995

                 1995/1996




S oyoil
                 1996/1997

                 1997/1998

                 1998/1999




R apes eed oil
                 1999/2000

                 2000/2001

                 2001/2002




C otton oil
                 2002/2003

                 2003/2004

                 2004/2005
P eanut oil




                 2005/2006
                                                                                                                                   Palm Oil Role in China’s Vegetable Oils Market




                 2006/2007

                 2007/2008
P alm oil




                 2008/2009

                 2009/2010
Changes in Total Imports of Palm Oil in China


     U n it:1 0 0 0 M T
7 ,0 0 0
6 ,5 0 0

6 ,0 0 0
5 ,5 0 0
5 ,0 0 0

4 ,5 0 0
4 ,0 0 0

3 ,5 0 0
3 ,0 0 0
2 ,5 0 0

2 ,0 0 0
1 ,5 0 0
1 ,0 0 0

  500
   -
              1992


                      1993


                             1994


                                    1995


                                           1996


                                                  1997


                                                         1998


                                                                1999


                                                                       2000


                                                                              2001


                                                                                     2002


                                                                                            2003


                                                                                                   2004


                                                                                                          2005


                                                                                                                 2006


                                                                                                                        2007


                                                                                                                               2008


                                                                                                                                      2009
Palm Oil Import Structure in China (2001-2009)
                                                                     Unit: 10,000 MT



               Crude Palm   Liquid Palm Oil   Palm Stearin   Other Palm
                                                                            Total
       Year       Oil       (MP: 19-24°C)      (44-56°C)        Oil

2001            1.5          103.3             15.8           31.5        152.0

2002            0.9          155.9             52.6           12.7        222.1

2003            2.9          224.6             99.7            5.4        332.5

2004            0.6          234.0            146.7            4.4        385.7

2005           10.4          267.1            149.2            6.2        433.0

2006           65.6          350.0             92.9            5.6        514.1

2007           43.2          394.1             70.8            1.6        509.7

2008           58.4          403.6             63.5            3.1        528.6

2009           59.0          451.4            132.7            1.1        644.2
Palm Oil Import by Original Country in China


        Unit:1,000MT
7,000
6,500
6,000
5,500
5,000
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
 500
  -
          1992

                 1993

                        1994

                               1995

                                      1996

                                             1997

                                                    1998

                                                           1999

                                                                  2000

                                                                         2001

                                                                                2002

                                                                                       2003

                                                                                               2004

                                                                                                      2005

                                                                                                             2006

                                                                                                                    2007

                                                                                                                           2008

                                                                                                                                  2009
                                      Malaysia                Indonesia                Other
Production, purchase & utilization of sustainable palm oil
RSPO Supply Chain Certification
RSPO Supply Chain Certification
RSPO Supply Chain Certification




RSPO Supply Chain Certification
RSPO Supply Chain Certification
Business Case for Production, Procurement and Use of Sustainable Palm Oil
Policy Recommendations
   Establish a National Policy Objective for Sustainable Palm Oil

   Establish a Market-based Certification Approach for Palm Oil
    Traders, Food Processors, and Industrial Users

   Support Domestic Awareness-raising and Demand for Sustainable
    Palm Oil

   Issue Regulations Governing Environment and Sustainable
    Development Requirements for Chinese Overseas Investment and
    Operation of Chinese Enterprises Abroad

   Initiate a Program to Address China’s Ecological Footprint
    Related to Agricultural, Forest and Fisheries Commodity Imports
Initiatives Already Undertaken to
Promote SPO in China
   WWF China’s effort in raising awareness under the global FCI
    programme and engagement of Chinese companies (COFCO); WWF MTI
    Palm Oil Strategy for China

   CFNA involvement in RSPO process since 2008 (Study tours &
    presentations and stakeholder meetings at RT6 to RT8)

   Special session & dialogue at CFNA Oils & Oilseeds Summit, 2009

   CFNA & WWF China established Network for Promoting SPO in China
    in 2009 (10 signatories)

   CFNA Stakeholder Engagement during RSPO RT8 in Jakarta, Indonesia
Thank you !

Session 6-5-chen-ying-prospects-and-challenges-for-sustainable-palm-oil-in-china-1498

  • 1.
    Prospects & Challengesof Sustainable Palm Oil for China Chen Ying May 6,2011 China Chamber of Commerce for Imp. & Exp. of Foodstuffs, Native Produce & Animal By-Products
  • 2.
    Outline of theDraft Report  Introduction  China’s Vision and Strategy for Sustainable Development  Global Palm Oil and China’s Situation  Sustainable Palm Oil (SPO) Production & Consumption  Business Case for Production, Procurement and Use of SPO  Review of Initiatives on Promotion of SPO in China  Policy Analysis and Recommendations  Next Steps and Future Work  Conclusion
  • 3.
    Objectives of theFNA/DEFRA/DFID Study  Provide strategic policy guidance for the Chinese government towards the development of sustainable palm oil.  Facilitate the adoption of sustainable trade policy with regard to palm oil in the upper levels of Chinese government.  Provide a business case for shifting to sustainable palm oil that is relevant for Chinese commerce.
  • 4.
  • 5.
    Production of worldpalm oil Unit:10,000MT 14,000 12,000 10,000 8,000 6,000 4,000 2,000 - 1980 1990 2000 2009 Soybean oil Palm oil Rapeseed oil sunseed oil O ther oil
  • 6.
    Consumption of worldpalm oil Unit:1,000MT 50,000 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 - 1980 1990 2000 2009 Indonesia Malaysia Other
  • 7.
    Changes in PalmOil Export in the World and Major Countries
  • 8.
    Changes in PalmOil Export in the World and Major Countries Unit:1,000MT 30,000 28,000 26,000 24,000 22,000 20,000 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 - 1961 1963 1965 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 Indones ia Malays ia O ther
  • 9.
    Changes in PalmOil Import in the World and Major Countries
  • 10.
    Changes in PalmOil Import in the World and Major Countries Unit:1,000MT 32,500 30,000 27,500 25,000 22,500 20,000 17,500 15,000 12,500 10,000 7,500 5,000 2,500 - 1961 1963 1965 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 C hina India B anglades h P akis tan Holland Germ any O ther
  • 11.
    - 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 11,000 1991/1992 Unit:1000MT 1992/1993 1993/1994 1994/1995 1995/1996 S oyoil 1996/1997 1997/1998 1998/1999 R apes eed oil 1999/2000 2000/2001 2001/2002 C otton oil 2002/2003 2003/2004 2004/2005 P eanut oil 2005/2006 Palm Oil Role in China’s Vegetable Oils Market 2006/2007 2007/2008 P alm oil 2008/2009 2009/2010
  • 12.
    Changes in TotalImports of Palm Oil in China U n it:1 0 0 0 M T 7 ,0 0 0 6 ,5 0 0 6 ,0 0 0 5 ,5 0 0 5 ,0 0 0 4 ,5 0 0 4 ,0 0 0 3 ,5 0 0 3 ,0 0 0 2 ,5 0 0 2 ,0 0 0 1 ,5 0 0 1 ,0 0 0 500 - 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
  • 13.
    Palm Oil ImportStructure in China (2001-2009) Unit: 10,000 MT Crude Palm Liquid Palm Oil Palm Stearin Other Palm Total Year Oil (MP: 19-24°C) (44-56°C) Oil 2001 1.5 103.3 15.8 31.5 152.0 2002 0.9 155.9 52.6 12.7 222.1 2003 2.9 224.6 99.7 5.4 332.5 2004 0.6 234.0 146.7 4.4 385.7 2005 10.4 267.1 149.2 6.2 433.0 2006 65.6 350.0 92.9 5.6 514.1 2007 43.2 394.1 70.8 1.6 509.7 2008 58.4 403.6 63.5 3.1 528.6 2009 59.0 451.4 132.7 1.1 644.2
  • 14.
    Palm Oil Importby Original Country in China Unit:1,000MT 7,000 6,500 6,000 5,500 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 - 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Malaysia Indonesia Other
  • 15.
    Production, purchase &utilization of sustainable palm oil
  • 16.
    RSPO Supply ChainCertification
  • 17.
    RSPO Supply ChainCertification
  • 18.
    RSPO Supply ChainCertification RSPO Supply Chain Certification
  • 19.
    RSPO Supply ChainCertification
  • 20.
    Business Case forProduction, Procurement and Use of Sustainable Palm Oil
  • 21.
    Policy Recommendations  Establish a National Policy Objective for Sustainable Palm Oil  Establish a Market-based Certification Approach for Palm Oil Traders, Food Processors, and Industrial Users  Support Domestic Awareness-raising and Demand for Sustainable Palm Oil  Issue Regulations Governing Environment and Sustainable Development Requirements for Chinese Overseas Investment and Operation of Chinese Enterprises Abroad  Initiate a Program to Address China’s Ecological Footprint Related to Agricultural, Forest and Fisheries Commodity Imports
  • 22.
    Initiatives Already Undertakento Promote SPO in China  WWF China’s effort in raising awareness under the global FCI programme and engagement of Chinese companies (COFCO); WWF MTI Palm Oil Strategy for China  CFNA involvement in RSPO process since 2008 (Study tours & presentations and stakeholder meetings at RT6 to RT8)  Special session & dialogue at CFNA Oils & Oilseeds Summit, 2009  CFNA & WWF China established Network for Promoting SPO in China in 2009 (10 signatories)  CFNA Stakeholder Engagement during RSPO RT8 in Jakarta, Indonesia
  • 23.