Malaysia's FGV Holdings says it will achieve 100 per cent traceability by 2021

KUALA LUMPUR: FGV Holdings, the world's largest crude palm oil producer, said on Thursday it expects to achieve 100% supply-chain traceability by the fourth quarter of 2021.

Supply-chain traceability allows buyers to track the source of palm fruit back to the estate it is harvested from, and ensures that the palm oil is legally sourced and produced.

The Malaysian company said it had achieved an 81% traceability to plantation, in an effort to ensure its fresh fruit bunch (FFB) sources are not linked to deforestation, planting on peat and open burning.

"While we are 100% traceable to the mills, tracing FFB to the plantations of origin presents a unique set of challenges attributed to the complexity of the supply chain in FFB traders' network," Group Chief Executive Officer Haris Fadzilah Hassan said in a statement.

He said FGV sources two-thirds of its FFB from external suppliers comprising state-owned palm oil plantation agency Felda, independent smallholders and traders.

Large palm companies have adopted traceability as well as no deforestation, no planting on peat and no exploitation policies for responsible production of palm oil, and major global buyers like Nestle and Unilever have also demanded these sustainable requirements.

Environmental groups have in recent years blamed palm oil cultivation in top producers Malaysia and Indonesia for widepsread deforestation and the killing of endangered animals.