This is one of the main conclusions of the new publication Barometer on Sustainable Production and Trade of Colombian Palm Oil (PDF) that presents the latest figures of local production and international trade of certified sustainable palm oil in Colombia. The sector report provides insights in order to understand the evolution, analyze the current situation and address the challenges of the sector for increasing sustainability.
According to the report, the production of certified sustainable palm oil increased from 5% in 2014 to 22% in 2018. Within the production of certified sustainable palm oil, a series of environmental and social practices are adopted and monitored by companies, mills and producers, such as no-deforestation, biodiversity preservation and formalization of workers, among others.
Likewise, the sustainable trade of palm oil from Colombia doubled at the same time. Certified volumes traded with Europe increased from 31% to 64% between 2014-2018, including all certification standards (RSPO, Rainforest Alliance and ISCC). Europe is the main importer of Colombian palm oil, with the Netherlands, Spain and Germany as main destination countries.
It confirms the efforts from both sides, suppliers and buyers, in making progress on the sector commitments towards sustainability. Additionally, the Free Trade Agreement between Colombia and the European Union has favoured better trade conditions for the import of palm oil. All in all, it marks Colombia as an emerging source that is quickly gaining market share in Europe for delivering sustainable palm oil." – Joel Brounen, Solidaridad Colombia Manager
Colombia is the fourth producer of palm oil in the world with a contribution of 2% of the worldwide production and 1.7% of total palm oil traded globally and is the leading producer in the Americas. These figures show the potential of Colombia to increase its sustainable production and trade.
Colombia is an appealing country of origin as compared to other global players because it has largely been exempted from deforestation issues in the past years. Colombia was the only country which signed the Zero-Deforestation Agreement for Palm Oil. In addition, Solidaridad, the Netherlands’ Oils and Fats Industry (MVO) and the Colombian National Federation of Oil Palm Growers (Fedepalma) signed a joint declaration to increase the production and trade of sustainable palm oil between Colombia and the Netherlands in 2018.
Investing in smallholders
In 2018, there were 11 companies certified under the RSPO standard and the total number of RSPO certified producers was 249 smallholders. That number represents a share of 5.5% of the overall estimated number of 4,500 smallholders in the Colombian palm oil sector. In the same year, Rainforest Alliance (RAS) certified palm oil was produced by three companies and 47 certified smallholders. So far, there are no ISCC certified smallholders.
“Certification processes and the implementation of management and control systems are especially challenging for smallholders farmers," María Goretti Esquivel, palm oil manager at Solidaridad Colombia, said. “The design and the inclusion of an incentive scheme is required to add speed and scale to the uptake of sustainable practices in the palm oil value chain by including smallholders."
Creating market incentives
In view of the success of the international commitments and given that local markets make up half of the total sales of Colombian crude palm oil (CPO), there is a need to replicate the international sourcing commitments on sustainable palm oil to the local context, including the CPO bound for the local biofuel industry.
“The example of oversupply of certified sustainable products in other agricultural commodities should serve as a reminder to find a healthy balance between production and demand. Without an adequate economic recognition from the market for the environmental and social value produced by sustainable palm oil, the incentives are limited for farmers to continue investing in the adoption of the criteria of Voluntary Sustainability Standards," Brounen concluded.
Barometer on Sustainable Production and Trade of Palm Oil in Colombia