Golden Agri aims to maintain EU shipments after deforestation law takes force

Golden Agri-Resources

08/03/2024 07:48

JAKARTA, March 8 (Reuters) - Palm oil producer Golden
Agri Resources (GAR) intends to maintain its exports to the
European Union at around 800,000 metric tons next year even
after the EU's landmark new deforestation regulation takes
effect, a company official said. 
    The European Parliament approved a law last April that will
ban imports of seven commodities including palm oil, soyoil, and
beef if they are linked to destruction of the world's forests.
    "We want to continue trading in the EU. It is not the
biggest of our export markets but it is an important one - 
obviously, a premium-paying one. We want to stay in that space,"
Anita Neville, the firm's chief sustainability and
communications officer, said in an interview in Kuala Lumpur
this week.
    Based in Indonesia, Golden Agri exports 700,000-800,000 tons
of crude palm oil and laurics to the EU annually, which
represents 10% to 15% of its revenue, she said.
    The company believes that it's own-sourced palm oil is
compliant with the EU Deforestation Regulation (EUDR), and has
traceability tools in place, Neville said. 
    It is arranging its supply chain, including rerouting trucks
and preparing separate vessels to segregate EUDR complaint
products from those without proof of land legality, geolocation,
and that they are deforestation-free.
    "GAR has been working on preparing for EUDR for two years
and we feel reasonably confident that we are well placed to
comply to EUDR,” she said.
    While Golden Agri will prioritise its own products when EUDR
takes effect on Dec 30 this year to ensure compliance and avoid
financial penalties, in the long term it needs its smallholder
suppliers to help meet demand, especially for palm kernel oil. 
    "To achieve perfect compliance from day 1, you will see some
people excluding smallholders because of the level of risk,"
Neville said.
    But, she added, "this rule is not going away."
    "So we also need to be thinking how we build our system and
opportunity to bring more smallholders in day 21, 51, and so
on," Neville said, adding that the company is working on lists
of compliant third parties.     
    The world's two biggest palm oil producing countries,
Indonesia and Malaysia, have voiced concerns that the
deforestation law could be detrimental to small farming
businesses.
    

 (Reporting by Bernadette Christina; Editing by Michael Perry)
 ((Bernadette.Christina@thomsonreuters.com;))