06 Oct 2017

IPNI SEAP Quarterly Newsletter 2017 - 3

Quarter 3, 2017


Oil for thought: A look at palm oil, kernel oil and palm kernel cake
When we talk about soy bean, most of us are aware that there is oil and meal that is produced, traded and used in different ways. When it comes to oil palm, many only know about its prominent product, crude palm oil, when the plant has much more to offer than that. In fact, Alonso-Alanso-Fradejas and colleagues (2015) applied the flex crop concept when studying oil palm (Figure 1). According to Borras and colleagues (2014), flex crops and commodities are those with multiple uses that are considered to be flexibly inter-changed, and the value of flex crops is related to the versatility of its derived commodities in volatile markets. Borras and colleagues (2014) argue that flex crops reduce uncertainty in a single crop sector through diversification of the product portfolio. This in turn may place investors in a position to react to changing prices for one or more of the different products from a single flex crop.

Figure 1: Modified from Alonso-Fradejas and colleagues (2015)

In this column, we have a look at crude palm oil (CPO) and palm kernel oil (PKO). The market dynamics for these two commodities have changed significantly during the last few years. Since early 2014, PKO has traded above the 1,000 USD per ton mark, while CPO has remained below that ceiling, and the premium at which PKO is traded has increased (see Figure 2). Let’s assume one hectare of oil palm produces about 20 t/ha fresh fruit bunches on average in Malaysia. At 20% oil extraction rate, that gives us about 4 t/ha CPO, or more or less, USD2,800/ha. The same 20 t/ha fresh fruit bunches generate, at 4% kernel extraction rate, about 0.8 t/ha palm kernels. The kernel crusher plant turns these, at 45% oil exchange rate, into 0.36 t/ha PKO, generating USD432/ha at current prices of USD1,200/t PKO. Additionally, the process produces about 0.4 t/ha palm kernel cake (PKC) that at USD200/t may add another USD80/ha for a total of USD3,312/ha. The value of PKC for animal nutrition is lower than that of soy meal (Alimon 2004 and Oladokun et al., 2016). At the same time, technological advances make it possible to replace more soy meal with PKC in feed mixtures (Sinurat et al., 2014; Fadil et al., 2014). Given the much higher productivity and cost efficiency of oil palm compared to soy (Cash Crop Report 2009), this could have a significant positive impact on land use requirements to supply the ever growing demand for animal feeds.

The question has come up whether it is worth breeding oil palms that will give more kernel (Corley and Tinker 2016; Hartley 1988). Recently, palms have been identified that could be used for breeding to increase kernel extension rate to more than 9%, doubling the PKO and PKC yield. Of course, CPO will likely decrease. At this time, it is difficult to estimate how much such reduction may be. The question remains to be answered whether this will be better for business, sustainable oil production for human consumption, animal feed stock production and growing industrial uses.

Figure 2: Prices of CPO and PKO in monthly basis per metric ton of oil respectively

Crop nutrition may also be used to influence the ratio between the proportions of palm kernels and mesocarp in a fruit bunch. Prabowo and Foster (1998) showed that potassium fertilizer significantly increased kernel to fruit bunch ratios in 3 out of 6 trials, while magnesium fertilizer reduced them. Furthermore, the few reported nutrient removals of palm kernels, as the source of PKO and PKC seem to be higher than those of the mesocarp that is processed to produce CPO. Corley and Tinker (2016) cite Kok and colleagues (2011) and give approximate mineral contents of palm kernels as 3050 mg magnesium per kg dry weight, up to 7500 mg/kg potassium, and 6500 to 7000 mg/kg phosphorus. Rui Li and colleagues (2012) indicated lower values for palm kernel produced in China. They found 1564 mg/kg magnesium, 5098 mg/kg potassium, and 4000 mg/kg phosphorus, while the corresponding values in mesocarp were only 853 mg/kg magnesium, 3264 mg/kg potassium, and 300 mg/kg phosphorus. Prabowo and Foster (2006) also found higher values for phosphorus and nitrogen in the kernel of tenera palms (0.354%, 1.72%) than corresponding values in the mesocarp (0.065%, 0.62%). Their values for magnesium and potassium were however similar in palm kernels and mesocarp, and more research remains to be done on the issue.

Agri Benchmark (2009). Cash Crop Report 2009: Benchmarking farming systems worldwide.

Alimon, A.R. (2004). The nutritive value of palm kernel cake for animal feed. Palm Oil Development, 40:12–14.

Alonso-Fradejas, A., J. Liu, T. Salerno and Y. Xu (2015). The Political Economy of Oil Palm as a Flex Crop and its Implications for Transnational Advocacy and Campaigning: A Preliminary Discussion. In Think Piece Series on Flex Crops & Commodities, No. 5. Amsterdam: TNI.

Borras, S. M., J.C. Franco, R. Isakson, L. Levidow and P. Vervest (2014). Towards understanding the politics of flex crops and commodities: implications for research and policy advocacy. Amsterdam: Transnational Institute (TNI) Agrarian Justice Program.

Corley, R.H.V. and P.B. Tinker (2016). The Oil Palm. Fifth Edition, Blackwell Publishing Ltd., Oxford, UK. 639p.

Fadil, M., A.R. Alimon, Y.M. Goh, M. Ebrahimi and A.S. Farjam (2014). Palm kernel cake as a potential ingredient in muscovy ducks diet. Italian Journal of Animal Science, 13:1, 3035.

Hartley, C.W.S. (1998). The oil palm: Tropical agriculture series. Third Edition, Longman Scientific & Technical, Harlow. 761p.

Kok, S., M. Ong-Abdullah, E.E.G. Chenglian, P. Namasivayam (2011). Comparison of nutrient composition in kernel of tenera and clonal materials of oil palm (Elaeis guineensis Jacq.). Food Chemistry, 129 (4): 1343–1347.

Li, R., Q. Xia, M. Tang, S. Zhao, W. Chen, X. Lei and X. Bai (2012), Chemical composition of Chinese palm fruit and chemical properties of the oil extracts. African Journal of Biotechnology, 11(39):9377-9382.

Oladokun, A.A., W.A. Rahman and N.M. Suparjo (2016). Prospect of maximizing palm kernel cake utilization for livestock and poultry in Malaysia: A review. Journal of Biology, Agriculture and Healthcare, 6(13).

Prabowo, N.E. and Foster, H.L. (1998). Variation in oil and kernel extraction rates of palms in North Sumatra due to nutritional and climatic factors. In: Proc. 1998 International Oil Palm Conference. ‘Commodity of the past, today and the future’ (Eds. A. Jatmika et al.), Indonesia Oil Palm Research Institute, Medan, Indonesia, pp. 275-286.

Prabowo, N.E. and Foster, H.L. (2006). Nutrient uptake and fertilizer recovery efficiency. In: Proc. Workshop on Nutrient Needs in Oil Palm: A dialog among experts, Singapore.

Sinurat, A.P., Purwadaria, T., Ketaren, P.P., Pasaribu, T. (2014). Substitution of soybean meal with enriched palm kernel meal in laying hens diet. Indonesian Journal of Animal and Veterinary Sciences (JITV), 19:159-238.

IPNI Newsletter 2017-3 Oil for Thought.pdfIPNI Newsletter 2017-3 Oil for Thought.pdf

New Book (Free Download)
We recently launched the Bahasa Indonesia version of the book "4R Plant Nutrition: A Manual for Improving the Management of Plant Nutrition". Click on the title to access the eBook: 4T Hara Tanaman: Pedoman Peningkatan Manajemen Hara Tanaman


Revitalizing the agricultural sector
“President Joko “Jokowi” Widodo has challenged the Bogor Institute of Agriculture to design a new development model to revitalize the agricultural sector. Though its role in the economy has declined, agriculture is still a very important source of livelihood for people in rural areas who account for around 40 percent of the total population.”

Source: The Jakarta Post, September 11, 2017

Indonesia to increase palm oil production to 42 million tons by 2020
“As the world’s biggest exporter of palm oil, Indonesia plans to increase production to 42 million tons by 2020 to maintain its global lead, according to a top industry player.
Indonesian Palm Oil Producers Association (GAPKI) chairman Joko Supriyono said in New York on Wednesday that Indonesia had a lot of room to increase production, especially in improving the productivity of palm oil plantations.”

Source: The Jakarta Post, September 8, 2017

Felda Global Ventures stops peat clearance, faces potential deforestation liability equal Q2 2017 net income
“As published by Chain Reaction Research, following a Board meeting on August 24, Felda Global Venture’s (FGV) executives updated its Sustainability Policy. The new policy states FGV pledged to halt peat forest clearance by its subsidiaries in West Kalimantan, Indonesia, operating under the names PT Citra Niaga Perkasa (PT CNP) and PT Temila Agro Abadi (PT TAA). It also pledges to rehabilitate peat land developed after August 25, 2016, when FGV first adopted its Sustainability Policy.”

Source: Seeking Alpha, September 5, 2017

Unilever resumes palm oil sourcing from IOI Group
“Unilever has resumed sourcing palm oil from the IOI Group following big improvements in the company’s policy, but the multinational warns that it will closely monitor progress to make sure sourcing practices stay on track.
‘We are pleased to see the progress IOI has made so far, in particular, on third party suppliers, independent verifications, and increased transparency,’ Unilever says in a statement.”

Source: Food Ingredients First, August 31, 2017

Indonesia plans to replant 4.7 million hectares of palm oil plantation
“The government of Indonesia has set a replanting plan for 4.7 million hectares of palm oil plantation in the country to boost productivity, an Agriculture Ministry official said on Tuesday.
Director General for Plantation of Indonesian Agriculture Ministry Bambang M.M. disclosed that the decision was made due to aging age of the plants and low quality of seeds.
Productivity of the plantations is only 2 to 3 tons per hectare, lower than that of 12 tons per hectare in Malaysia, said Bambang.
‘We can raise the productivity to 8 tons per hectare,’ he added.”

Source: XinhuaNet, August 29, 2017

Indonesian government forcing private companies to pay for damaging forests
The Indonesian government is struggling to collect fines from companies found guilty of damaging the environment, leaving trashed rainforests and peat swamps to stay barren as restoration work cannot begin in earnest before the money is paid.
Since 2014, the Ministry of Environment and Forestry has stepped up its prosecution of environmentally destructive companies, such as plantation firms that use fire to clear land and miners operating illegally.

Source: Pacific Standard Magazine, August 23, 2017

Cassava exports see further surge
“The export value of cassava is expected to continue to rise this year after a jump in value for the first six months (Q1 and Q2). Laos earned over US$77.3 million in the first six months of this year - an increase of 16.7 percent compared to the almost US$66.3 million earned last year, according to the Ministry of Industry and Commerce.”

Source: Asia News Network, August 30, 2017

Philippine sugar production hits 2.5 million metric tons
“The country’s sugar output has reached 2.5 million metric tons as of August 6, surpassing the production target of the government for the current crop year, according to data from the Sugar Regulatory Administration (SRA). Data from the SRA showed that sugar production as of August 6 is 11.7 percent higher than the 2.238 million metric tons recorded in crop year 2015-2016. It is also 11.1 percent higher than the SRA’s initial forecast of 2.25 MMT for crop year 2016-2017, which will end on August 31.

Source: Business Mirror, August 15, 2017

Indonesian company makes eco-bags from cassava starch
“As the global epidemic of plastic bag pollution continues to cause widespread damage to the environment and wildlife, an Indonesian company has developed an eco-friendly alternative with the use of cassavas. Bali-based Avani Eco says its ‘groundbreaking technology’ enables it to replace the otherwise disposable plastic products which take hundreds and even thousands of years to decompose.”

Source: FreshFruitPortal, August 4, 2017

Việt Nam’s corn imports to continue
“Việt Nam imported 3.53 million tons of corn in the first half of this year, up 5.6 per cent over the same period last year, according to the Crop Production Department. Last year 8.5 million tons had been imported, a year-on- year increase of 9.5 per cent, with Argentina, Brazil accounting for 47.2 per cent and 41.2 per cent of the imports.”

Source: Viet Nam News, July 28, 2017

ARMM wants to supply cassava, cassava flour from Marawi to Nestlé’s MILO plant
“ARMM wants to supply cassava and cassava flour from Lanao del Sur to Nestlé Philippines’s MILO plant in Batangas. Nestlé Philippines announced that its processing plant will soon start its operation. The company is looking for sources of around 70,000 metric tons of cassava every year.”

Source: Kicker Daily News, July 24, 2017

Vietnam to supply majority of 250,000 metric tons rice import
“Six companies from Southeast Asia, four from Vietnam, will likely supply the 250,000 metric tons of rice as part of the planned government to private sector importation scheme to boost the country’s dwindling buffer stock. During the bidding on Tuesday, the National Food Authority announced that four companies from Vietnam, one from Singapore and one from Thailand had the lowest bids for the procurement of the 250,000 MT, out of the 16 companies that submitted their bids.”

Source: PhilStar, July 25, 2017

The problem with palm oil
“The problem with palm oil is not so much that it causes deforestation in tropical countries and threatens exotic animals like the orangutans in Southeast Asia or gorillas in Nigeria with extinction. The problem is not even the frequent stories of land grabs and human rights abuses when it’s grown in large plantations.
The problem with palm oil is that it is such an efficient crop, that everybody wants in.”

Source: Huffington Post, July 12, 2017

It took these monkeys just 13 years to learn how to crack nuts
“The macaques of southern Thailand have started a new tradition. For at least a century, they have used simple stone tools to smash open shellfish on the seashore. Now the monkeys have begun using stones to crack open oil palm nuts further inland.
The finding means they may be the first non-human primates to have begun adapting their Stone Age technology to exploit a new ecological niche.”

Source: The New Scientist, September 4, 2017


Oil Palm Breeding: Genetics and Genomics
The oil palm is a remarkable crop, producing around 40% of the world’s vegetable oil from around 6% of the land devoted to oil crops. Conventional breeding has clearly been the major focus of genetic improvement in this crop. A mix of improved agronomy and management, coupled with breeding selection have quadrupled the oil yield of the crop since breeding began in earnest in the 1920s. However, as for all perennial crops with long breeding cycles, oil palm faces immense challenges in the coming years with increased pressure from population growth, climate change and the need to develop environmentally sustainable oil palm plantations.

In Oil Palm: Breeding, Genetics and Genomics, world leading organizations and individuals who have been at the forefront of developments in this crop, provide their insights and experiences of oil palm research, while examining the different challenges that face the future of the oil palm. The editors have all been involved in research and breeding of oil palm for many years and use their knowledge of the crop and their disciplinary expertise to provide context and to introduce the different research topics covered.

Source: CRC Press, Taylor and Francis Group, Aug 2017

Agronomics: transforming crop science through digital technologies
Abstract: Good progress in crop husbandry and science requires that impacts of field-scale interventions can be measured, analysed and interpreted easily and with confidence. The term ‘agronomics’ describes the arena for research created by field-scale digital technologies where these technologies can enable effective commercially relevant experimentation. Ongoing trials with ‘precision farm research networks’, along with new statistical methods (and associated software), show that robust conclusions can be drawn from digital field-scale comparisons, but they also show significant scope for improvement in the validity, accuracy and precision of digital measurements, especially those determining crop yields. - R. Sylvester-Bradley, D.R. Kindred , B. Marchant , S. Rudolph , S. Roques, A. Calatayud, S. Clarke and V. Gillingham.

Source: Advances in Animal Biosciences: Precision Agriculture, 8:2, 728–733 (2017)

Spatial variation in Nitrogen requirements of cereals, and their interpretation
Abstract: A range of precision farming technologies are used commercially for variable rate applications of nitrogen (N) for cereals, yet these usually adjust N rates from a pre-set value, rather than predicting economically optimal N requirements on an absolute basis. This paper reports chessboard experiments set up to examine variation in N requirements, and to develop and test systems for its prediction, and to assess its predictability. Results showed very substantial variability in fertiliser N requirements within fields, typically >150 kg ha−1, and large variation in optimal yields, typically >2 t ha−1. Despite this, calculated increases in yield and gross margin with N requirements perfectly matched across fields were surprisingly modest (compared to the uniform average rate). Implications are discussed, including the causes of the large remaining variation in grain yield, after N limitations were removed. - D.R. Kindred, R. Sylvester-Bradley, A.E. Milne, B. Marchant, D. Hatley, S. L. Kendall, S. Clarke, K. Storer and P.M. Berry.

Source: Advances in Animal Biosciences: Precision Agriculture, 8:2, 303–307 (2017)

Global economic trade-offs between wild nature and tropical agriculture
Abstract: Global demands for agricultural and forestry products provide economic incentives for deforestation across the tropics. Much of this deforestation occurs with a lack of information on the spatial distribution of benefits and costs of deforestation. To inform global sustainable land-use policies, we combine geographic information systems (GIS) with a meta-analysis of ecosystem services (ES) studies to perform a spatially explicit analysis of the trade-offs between agricultural benefits, carbon emissions, and losses of multiple ecosystem services because of tropical deforestation from 2000 to 2012. Even though the value of ecosystem services presents large inherent uncertainties, we find a pattern supporting the argument that the externalities of destroying tropical forests are greater than the current direct economic benefits derived from agriculture in all cases bar one: when yield and rent potentials of high-value crops could be realized in the future. Our analysis identifies the Atlantic Forest, areas around the Gulf of Guinea, and Thailand as areas where agricultural conversion appears economically efficient, indicating a major impediment to the long-term financial sustainability of Reducing Emissions from Deforestation and forest Degradation (REDD+) schemes in those countries. By contrast, Latin America, insular Southeast Asia, and Madagascar present areas with low agricultural rents (ARs) and high values in carbon stocks and ES, suggesting that they are economically viable conservation targets. Our study helps identify optimal areas for conservation and agriculture together with their associated uncertainties, which could enhance the efficiency and sustainability of pantropical land-use policies and help direct future research efforts. - L.R. Carrasco, E.L. Webb, W.S. Symes, L.P. Koh, N.S. Sodhi.

Source: PLoS Biology 15: 7 (2017)

"The Range Problem" After a Century of Rangeland Science: New Research Themes for Altered Landscapes
Abstract: The rangeland science profession in the United States has its roots in the widespread overgrazing and concurrent severe droughts of the late 19th century. These drivers contributed to rangeland resource degradation especially in the American Southwest—what E. O. Wooton (1908) called the “Range Problem.” Although logical for the time, the scientific activities and resulting policies that arose out of this catastrophe were based on reductionist experimentation and productionist emphases on food and fiber. After a century of science and policy, there are two additional perspectives that shape our vision for the emphases of the future. First, rangeland landscapes are extremely heterogeneous; general principles derived from scientific experimentation cannot be easily or generally applied without adjusting to the distinct societal and ecological characteristics of a location. Second, rangeland management occurs at spatial scales considerably larger than those that have typically been addressed in range science. Scaling up science results is not a simple, additive process. The leading features of the emerging science are 1) research at landscape scales and 2) over longer time spans that 3) approaches conservation and management practices as treatments requiring scientific evaluation, 4) incorporates local knowledge, 5) is explicitly applied in nature, and 6) is transparent in its practice. We strongly argue for a science that supports resource management by testing hypotheses relevant to actual conservation practices and iteratively applying its findings in partnership with managers in an ongoing, adaptive fashion. – N.F. Sayre, W. deBuys, B.T. Bestelmeyer, and K.M. Havstad.

Source: Rangeland Ecology & Management 65:6, 545 - 552 (2012)


We have also updated our SEAP Reference Database with references on the following topics: commodity markets, global economy and crops such as cocoa, pepper and oil palm. For a complete listing of these references, please click here.


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Press Release
IPNI Southeast Asia Program has disseminated the following press releases in the third quarter of 2017:
Published in Fertilizer Focus (July/August 2017 edition): On farm experimentation to identify fertilizer management practices and products for cocoa in Indonesia

Webinar Recordings
Conducted these webinars with recordings for those who have missed them:
Quick Glance
Shared some photos we love in a new section called "Photo of The Week" on our website:


Webinar - Managing Plant Nutrition for Multiple Ecosystem Services
11 October 2017

Oils and Fats International Congress (OFIC) 2018
16-18 October 2017
Kuala Lumpur, Malaysia

Webinar - Crops and land use in Southeast Asian region
19 October 2017

13th Indonesian Palm Oil Conference (IPOC)
1-3 November 2017
Bali, Indonesia

International Palm Oil Congress and Exhibition (PIPOC) 2017
13-16 November 2017
Kuala Lumpur, Malaysia

20 – 22 November 2017
Brisbane, Queensland, Australia

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Disclaimer: News from the Region is a selection of regional agriculture-related articles extracted from internet sources. IPNI does not verify, endorse, or take responsibility for the accuracy, currency, completeness or quality of the content in these sites. Due to the nature of this service, IPNI cannot always verify every single news item. Be sure to check with the official websites of the companies, universities, research centers, and government agencies before using any information in the IPNI SEAP Quarterly Newsletters or webpages, as IPNI cannot vouch for news items submitted by the public. Links to external websites are included for the sole purpose of providing easy access to the source. The inclusion of external hyperlinks does not constitute IPNI’s endorsement of the views expressed by these websites. IPNI shall not be responsible for any damages caused directly or indirectly by the use of any information or content from within linked websites.

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