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The palm oil advantage in Biofuel |
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Written by Administrator
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Thursday, 05 April 2007 |
THE high prices of petroleum have stimulated the rapid development of
the biofuel industry in the European Union, United States and to some
extent in Malaysia. Biofuel offers strategic advantages for different
sectors and stakeholders.
For the Malaysian palm
oil industry, it creates new market demand which will lead to the
firming up of commodity prices. This reduces the risk of prices falling
to a low level as seen during the period of excess supply in 2001.
Farmers in the EU and the US see biofuel as an outlet for locally-grown
vegetable oils. But subsidy is needed to make their costly oils
competitive. Subsidies for biofuel in these countries have naturally
attracted imports of cheaper palm oil as an alternative raw material.
This has raised concerns among several politicians and farmers’ groups,
who claim that their countries may unintentionally be subsidising
foreign-produced oils.
Environmental non-governmental organisations and parliamentarians in
the EU and US allege that the new demand for palm oil in their newly
developed biofuel industry will lead to deforestation in Malaysia and
Indonesia to accommodate the expanding cultivation of oil palm. The
alleged conversion of forests is then linked to habitat loss,
biodiversity and now global warming.
In reality, protectionist measures are being cleverly disguised as
environmental issues, which are being exploited and propagated as
anti-palm oil campaigns by environmental NGOs to increase financial
contributions from unaware sympathisers. Any measure to exclude palm
oil will naturally contravene World Trade Organisation provisions.
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Last Updated ( Thursday, 05 April 2007 )
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