FRANKY WIDJAJA, head of one of the world’s biggest palm plantation companies, warned that the European Union’s plans to restrict use of the tropical oil in biofuel will misfire as the move will hurt growers and jeopardize future supplies of the vegetable oil.

The world needs palm oil as supplies from alternative oilseeds just won’t be enough to meet rising demand for food and fuel, said the chairman and chief executive officer of Singapore-based Golden Agri-Resources Ltd., and scion of one of Indonesia’s richest families. Buyers and suppliers will probably end up compromising to find a solution to the dispute, he said.

He said the EU limits on use in biofuel are irresponsible because they threaten the incomes of 17 million people in Indonesia.

The dispute between the 28-nation bloc and some of the world’s leading developing nations escalated this year as Indonesia and Malaysia, which together supply about 85 percent of the world’s palm oil, warned that they are ready to retaliate against what they see as “discriminatory” rules.

While the EU says palm oil leads to deforestation and climate change, producing nations say the claims are misleading and detrimental to countries that depend on the industry. Palm exports fetched Indonesia US$17.8 billion last year and the industry contributes about 3.5 percent to gross domestic product. (SD-Agencies)