IDX-Listed Palm Oil Growers

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Analysis: IDX-Listed Palm Oil Growers
June 30, 2015
Six out of ten largest palm oil growers listed on the Indonesian stock exchange (IDX) have high-risk exposure to major buyer/traders’ No Deforestation, No Peat, No Exploitation (NDPE) purchasing policies. Six out of these ten growers sell 50% or more of their crude palm oil and/or palm kernel oil to buyers that have adopted such policies for their supply chain.

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Six out of ten largest palm oil growers listed on the Indonesian stock exchange (IDX) have high-risk exposure to major buyer/traders’ No Deforestation, No Peat, No Exploitation (NDPE) purchasing policies. Six out of these ten growers sell 50% or more of their crude palm oil and/or palm kernel oil to buyers that have adopted such policies for their supply chain.

Two of the top ten growers (SSMS and ANJT) have recently had their purchasing contracts suspended over sustainability concerns. Two other growers (SMART and Astra) were recently pressured by investors and campaigners to establish stronger sustainability standards.

Growers that try to avoid traders’ higher sustainability standards are subject to significant risk exposure as they face downstream purchasing policies from consumer brands and manufacturers that are increasingly committed to NDPE policies.

Crude palm oil from the ten largest IDX-listed growers accounts for 10% of global production.

Chain Reaction Research concludes that the transformation to sustainable practices in the palm oil industry is unavoidable, particularly for publicly traded plantation companies.

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