Honduras: Law for the Palm Sector

A bill is being discussed in Congress to facilitate financing for producers and to support them in certifying the quality of their plantations.

Wednesday, September 4, 2019

Because of the complex scenario faced by African palm producers because of low international prices, the Hernandez administration presented to Congress the bill "Law for the Strengthening of the Productive Sector of Oil Palm."

Laprensa.hn reports that "... according to the Executive, it will achieve, among other points, to propitiate the legal framework and financial mechanisms or schemes that allow access to financing for oil palm producers; to strengthen the industry through the adoption of sound agricultural practices that lead to obtaining quality and environmental certification of herbicide-free plantations. There will also be crop diversification and value will be added to the industry through business alternatives derived from the production of biofuel, bi-gas and other renewable energy schemes.

See "Palm Oil: Exports Up to September 2018" and "Palm Oil: Emergency Is Declared for Low Prices

Héctor Castro, leader of the palm sector, explained that "... with the validity of this law, producers will be able to access fresh resources from the financial system to recover their plantations. The situation is fragile, as some plantations have lost between 30% and 40% of their production."

According to reports from CentralAmericaData, between February 2016 and March 2017, the average price of Central American palm oil exports reported a 37% increase, rising from $0.54 per kilo to $0.74 per kilo, but that trend then reversed, falling from $0.70 per kilo recorded in April 2017 to $0.53 per kilo in March this year.

This bill seeks to complement actions that are already being implemented, such as the program to change the conditions of debts of producers and traders of palm oil, who will have until December 31, 2019 to request the refinancing or readjustment of loans they have with supervised financial institutions in the country.

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