Certification for palm oil alternatives becoming more important

The Sustainable Coconut Charter was launched to encourage sustainable production of coconuts and coconut oil. A growing number of cosmetic and food companies are looking at palm oil alternatives. As such, the charter provides certainty about ethical sourcing.

On 16 November 2020, some of the leading private sector companies in the coconut industry signed the first global Sustainable Coconut Charter. This included the companies AAK, Barry Callebaut, Friesland Campina, Nestlé and Unilever. The charter aims to:

• Reduce the carbon footprint of coconuts;
• Enhance the lives of farmers;
• Encourage sustainable production of coconuts and coconut oil; and  
• Boost supply to meet the increasing global demand for coconuts.

The charter includes the main sustainability principles of the coconut industry. It also outlines goals in supply chains.

Sustainable Roundtable for Coconut Oil initiative

The charter was signed as a part of the Sustainable Roundtable for Coconut Oil initiative, which was created in March 2019. The Roundtable focuses on various areas, such as:

• Improving smallholder incomes;
• Replanting trees;
• Improving productivity;
• Traceability;
• Increasing access to technology; and
• Reducing deforestation and misconduct.

Around 49 companies participated in the event. Together, these companies represent over 40% of global coconut oil production.

The sustainable coconut charter was established to encourage the sustainable production of coconuts. Demand for coconut products has increased in recent years. A growing number of cosmetic and personal care companies use coconut oil as an alternative to palm oil. There is also a high demand from the food industry. This is partly due to the growing popularity of coconut water and plant-based foods. However, supply is not keeping up with demand. Because of this, there is an increasing number of incidents of fraud and adulteration (the mixing of ingredients).

Issues in the coconut industry

Up to 98% of coconut producers are smallholders. This leads to inefficiency in supply chains. Other major issues that the coconut industry faces include:

• Lack of investment;
• Ageing trees; and
• Competition from crops like palm oil.

The industry is realising that certified coconut plantations are better managed. Journalist Nithin Coca states, “sustainability encourages farmers to develop efficient practices.”

Expected increase in demand

The charter is expected to increase demand for sustainable coconut oil in the future. Exporters of palm oil alternatives from developing countries should look at following similar sustainability schemes for their ingredients. Sustainability schemes and ethical standards are expected to become more popular in the coming years. A representative from AAK says, “I hope and trust this will result in a new momentum. I encourage more coconut growers, processors and end-users as well as other stakeholders to join us to make better coconut production really happen.”  

For more information, read the CBI studies on exporting palm oil alternatives to Europe. Also, visit the CBI website for a range of studies on exporting natural ingredients for cosmetics to Europe.

This news article was written for CBI by Ecovia Intelligence.

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