FGV, Sime Darby products face snub after US ban

 

Some food companies have issued a ‘no buy order’ for products from FGV and Sime Darby.

PETALING JAYA: Major palm oil buyers are seeking to block FGV Holdings and Sime Darby Plantations from their global supply chain after the US banned imports from the two biggest producers, Reuters reports.

Citing sources, the news agency said these buyers have requested suppliers to reduce or reject altogether products from the two companies entering the US, Europe, Australia and Japan.

US food company General Mills has also issued global “no buy orders” for FGV Holdings and Sime Darby Plantations, whose products were banned last year by the US Customs and Border Protection over allegations of forced labour.

“Customers are very afraid, and very cautious … They are questioning to what extent we are sourcing from them,” Reuters quoted one source as saying.

“Companies are fearing the risk to their own reputation if they buy from Sime Darby and FGV,” the source added.

Hershey, one of the largest chocolate manufacturers in the world, said its North American suppliers have removed “all Sime Darby volumes in compliance with the US order.”

According to Reuters, brands like Nestle, Unilever and Hershey had suspended FGV since 2018 after the Roundtable on Sustainable Palm Oil (RSPO), an industry watchdog, found “exploitative” labour practices.

Meanwhile, Sime Darby said many of its key customers have expressed continued support following the US ban and that it has gotten in touch with independent firms to address the issue.

“We believe our customers recognise our honest commitment to continuous improvement, and our credibility as the world’s largest producer of RSPO-certified sustainable palm oil, accounting for about 17% of total global certified sustainable palm oil supply,” Sime Darby Oils managing director Mohd Haris Mohd Arshad told Reuters.

FGV, however, has not responded to a request for comment. - FMT