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Malaysia to pilot blockchain for sustainable palm oil

palm tree oil

Blockchain firm BloomBloc and the Malaysian Palm Oil Council (MPOC) are piloting a traceability platform to improve palm oil supply chains and revenues. The initiative was announced at the recently held World Economic Forum (WEF) in Davos, Switzerland. Bloombloc has offices in Switzerland and Malaysia.

Like so many countries, in response to Covid-19, Malaysia has imposed social distancing rules and shut schools and businesses. However, after a temporary closure, palm oil plantations were granted an exemption. 

Today the UN warned of concerns that Covid-19 interruptions could result in global food shortages. 

Malaysia is among the top producers of palm oil in the world, just behind Indonesia. The two countries produce about 84% of the planet’s palm oil. While palm oil is used for a variety of applications, including cosmetics, Malaysia accounts for 65% of global edible oil exports. 

Using blockchain, Malaysia aims to provide customers with transparency into palm oil supply chains, focusing on sustainability. 

BloomBloc has developed a mobile application and a web interface for recording information to the blockchain. The data stored includes details of each tree, fruits harvested, extraction processes and more. BloomBloc and MPOC previously trialed the blockchain platform and will now run pilots with Malaysian palm plantations, smallholders, and palm oil processors. It uses enterprise blockchain Hyperledger Fabric.

“The MPOC’s pioneering venture into blockchain technology demonstrates our commitment to maintaining our industry’s sustainability and enhancing its marketability. It speaks volumes about our trust in our supply chain,” said Malaysian Palm Oil Council CEO, Kalyana Sundram.

BloomBloc and MPOC believe that family farms or smallholders can improve their processes using blockchain traceability, resulting in higher productivity and reduced costs. It could even potentially help them get a better price for their produce. 

The blockchain project is in line with the Malaysian Sustainable Palm Oil (MSPO) certification standard, which became mandatory last year. Using blockchain, producers can address the environmental, social, and economic aspects of palm oil production.

Turning to BloomBloc, the firm aims to create sustainable supply chains. It is a unit of Lardi & Partner Consulting (Switzerland), established in partnership with VIKNAtech Engineering, which has interests in the Malaysian palm oil industry. 

Last year, Nestlé, one of the first companies to use blockchain for food traceability, announced a collaboration with OpenSC. The food manufacturer is using the OpenSC blockchain for tracking the supply chain of New Zealand milk to Nestlé factories and for verifying palm oil sustainability. 

A few months ago, the World Wide Fund for Nature (WWF) Philippines and UnionBank announced they were working on a blockchain fish traceability platform. The focus is on sustainability and financial support for fishers. 

Another well-known food traceability initiative is IBM’s Food Trust, which has partners around the world.