Time for apologies?
February 27th, 2019
⏰ 2 minute read
⏰ 2 minute read
Business as usual?
If you work in palm oil, weekends can often be like this. Saturday’s are a good time to catch up the latest palm oil news, which of course means something negative. Last Saturday was business as usual as someone sent me the latest U.K. Guardian newspaper hit piece on how terrible our oil is....but...
History
Egyptian
This long article, written by someone far away, talked about palm oil as if it was a new invention & has only recently become used in products like soaps, shampoos & food. Shocked an article like this could be written without even basic knowledge, I wrote back on Twitter. My first point, palm oil dates back to ancient Egypt.
Palmolive
The first discovery of palm oil use is from an Egyptian tomb. Palm oil made the first commercial soap, Palmolive in the late 1800s. Palmolive had one of the first ever advertising campaign which used luxurious images of ancient Egypt ‘If you’d been a princess 1000 years ago, your servants would‘be brought palm oil for your bath’,
Iceland
The article was so wrong, and so anti palm oil. But it did discuss one recent news story highlighting a major issue for the anti palm oil crowd. That Iceland the U.K. supermarket which tried to remove palm oil from their products, couldn’t. They had to remove their brand labels instead.
Stunner research
Google Earth
Almost immediately after seeing this article, I found another one. The first one showed how misinformed the anti palm crowd are, the second one showed how even us palm oil supporters have been wrong. It was a study of land change using Goggle Earth Pro which gives you access to satellite image history. The conclusions were astonishing.
If you work in palm oil, weekends can often be like this. Saturday’s are a good time to catch up the latest palm oil news, which of course means something negative. Last Saturday was business as usual as someone sent me the latest U.K. Guardian newspaper hit piece on how terrible our oil is....but...
History
Egyptian
This long article, written by someone far away, talked about palm oil as if it was a new invention & has only recently become used in products like soaps, shampoos & food. Shocked an article like this could be written without even basic knowledge, I wrote back on Twitter. My first point, palm oil dates back to ancient Egypt.
Palmolive
The first discovery of palm oil use is from an Egyptian tomb. Palm oil made the first commercial soap, Palmolive in the late 1800s. Palmolive had one of the first ever advertising campaign which used luxurious images of ancient Egypt ‘If you’d been a princess 1000 years ago, your servants would‘be brought palm oil for your bath’,
Iceland
The article was so wrong, and so anti palm oil. But it did discuss one recent news story highlighting a major issue for the anti palm oil crowd. That Iceland the U.K. supermarket which tried to remove palm oil from their products, couldn’t. They had to remove their brand labels instead.
Stunner research
Google Earth
Almost immediately after seeing this article, I found another one. The first one showed how misinformed the anti palm crowd are, the second one showed how even us palm oil supporters have been wrong. It was a study of land change using Goggle Earth Pro which gives you access to satellite image history. The conclusions were astonishing.
@IOPscience
Fires
The study shows how the land in Indonesia changed from 2001 from palm oil development, timber, other plantations, local farming & forest fires. The consensus has been that a huge expansion of palm oil up to now has destroyed forests & led to massive fires. The study shows the exact opposite.
Slowdown
The Palm oil expansion runs up to 2008, buy at levels way below Greenpeace claims of a football field of forest disappearing every 20 seconds. Fires decline. Then growth declines to almost 0 by 2016. During the decline is when the forest fires start running rampant from small farm activity, not palm oil.
Implications
Collapse
The implications are huge. The narratives of the anti palm oil crowd are being shown to be 100% wrong. We already saw orangutan numbers are rising not declining. New plantings are not running at a soccer field every 20 seconds, they’re almost zero & palm has not caused huge fires, they were mostly natural.
Supply
What is even more clear is that the biggest issue facing the industry is the potential slow supply ahead. The Google Earth data shows a slowdown from 2008, faster than anyone imagined or current consensus estimates. As near zero is reached by 2016, production will stop growing by 2030.
Price
The anti palm oil crowd has clearly played a role in the slowdown & its speed. The implications of supply no longer growing is that prices must now rise cyclically, until new supply growth starts again. When could that be? As Indonesia now produces about 55% of world palm oil & we have a moratorium, the answer is not soon:
Apology?
What is important for you as investors here? Anti palm oil arguments are collapsing. Many large investor funds have not been able to invest in palm oil companies because of them & this will now change. A rising palm oil price & increased investor interest will be great for you. Only 1 question left... will we get an apology.?
The study shows how the land in Indonesia changed from 2001 from palm oil development, timber, other plantations, local farming & forest fires. The consensus has been that a huge expansion of palm oil up to now has destroyed forests & led to massive fires. The study shows the exact opposite.
Slowdown
The Palm oil expansion runs up to 2008, buy at levels way below Greenpeace claims of a football field of forest disappearing every 20 seconds. Fires decline. Then growth declines to almost 0 by 2016. During the decline is when the forest fires start running rampant from small farm activity, not palm oil.
Implications
Collapse
The implications are huge. The narratives of the anti palm oil crowd are being shown to be 100% wrong. We already saw orangutan numbers are rising not declining. New plantings are not running at a soccer field every 20 seconds, they’re almost zero & palm has not caused huge fires, they were mostly natural.
Supply
What is even more clear is that the biggest issue facing the industry is the potential slow supply ahead. The Google Earth data shows a slowdown from 2008, faster than anyone imagined or current consensus estimates. As near zero is reached by 2016, production will stop growing by 2030.
Price
The anti palm oil crowd has clearly played a role in the slowdown & its speed. The implications of supply no longer growing is that prices must now rise cyclically, until new supply growth starts again. When could that be? As Indonesia now produces about 55% of world palm oil & we have a moratorium, the answer is not soon:
Apology?
What is important for you as investors here? Anti palm oil arguments are collapsing. Many large investor funds have not been able to invest in palm oil companies because of them & this will now change. A rising palm oil price & increased investor interest will be great for you. Only 1 question left... will we get an apology.?