Quality sustainable palm oil in short supply, says confectioner

By Guy Montague-Jones

- Last updated on GMT

Related tags: Palm oil, Papua new guinea, Indonesia

Quality sustainable palm oil in short supply, says confectioner
Quality and supply problems stand in the way of buying palm oil entirely from certified sustainable sources, according to Nutella manufacturer Ferrero.

Palm oil has become popular with chocolate makers as a texture agent and as an inexpensive source of vegetable fat, but environmental campaigners claim that its cultivation is contributing to deforestation and the disappearance of the Orangutan.

One solution for industry is to buy certified sustainable palm oil, but according to Alessandro Cagli, Ferrero’s corporate social responsibility (CSR) director, there is currently not enough high quality sustainable oil available to meet the company’s needs.

New sustainable deal

Ferrero is working to improve the situation and has just signed a five year agreement with New Britain Palm Oil binding the Italian confectioner to buy oil that is certified as conforming to the sustainability criteria of the Roundtable on Sustainable Palm Oil (RSPO).

But the deal accounts for about a quarter of Ferrero’s palm oil requirements leaving the remainder to come from uncertified sources.

Cagli said the deal with New Britain allows the confectionery company to gain better control of its supply chain and source palm oil that is both sustainable and high quality. New Britain is building a new plant in Papua New Guinea to process palm oil for Ferrero, allowing the confectioner to track and control its supplies.

Supply problem

But the CSR director said there is not enough good quality certified palm oil for the company to stop buying from uncertified sources.

“Consumers are only happy if the taste is good – sustainability is not enough on its own,”​ said Cagli.

Cadbury recently removed palm oil from its Dairy Milk product in New Zealand following consumer complaints about the taste. Cagli said Ferrero wants to avoid such a reaction and is therefore only sourcing high quality palm oil adapted to its needs.

Greenpeace campaigner Ian Duff welcomed the deal between New Britain and Ferrero saying that New Britain is a pioneer in offering the market entirely traceable palm oil and therefore preventing certified and non-certified oils being blended together.

Need to pressurise suppliers

But Duff called on Ferrero and other food manufacturers to do more to prevent palm oil entering their supply chains from environmentally damaging sources.

He said: “We recognise there is a challenge but manufacturers like Ferrero need to put pressure on their suppliers to use sustainable sources of palm oil.”

Cagli claims that despite relying on non-certified sources for much of its supply, Ferrero says from regions in Malaysia and Papua New Guinea where it is not contributing to deforestation.

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