Palms yield up to five times the oil of other crops ©123RF
Palms yield up to five times the oil of other crops ©123RF

What does the future hold for palm oil?

Production of palm oil continues to rise, despite mass plantations already replacing much-needed biodiverse tropical rainforests

Palm oil is the new plastic, the Daily Telegraph pronounced recently. In the wake of the supermarket Iceland’s decision to phase out the oil from its own-brand products by the end of the year, the newspaper was advising readers on how to rid their shopping baskets of the commodity.

According to Iceland, around half of all supermarket products contain palm oil, and after visiting Indonesia, MD Richard Walker said there is no such thing as “guaranteed sustainable palm oil available in the mass market”. So will a flood of companies follow Iceland and ban the oil?

Global production over the past two decades would suggest otherwise – it has ballooned from 15.2m tonnes in 1995 to 62.6m tonnes in 2015, according to the European Palm Oil Alliance (EPOA).

Prices, meanwhile, are on an upward trajectory, and predicted to climb steadily at least to 2025 (see table).

Growing demand for palm oil, used in food products, cosmetics and biodiesel, is “devastating tropical rainforests across Southeast Asia”, says Iceland. Indonesia and Malaysia are the two biggest producers – 53% and 32% respectively, according to EPOA – and palm oil and wood pulp production is driving deforestation and species extinction, including the orangutan, says Iceland. The supermarket has removed palm oil from 50% of its product range and 130 products will have been reformulated by the end of 2018, reducing demand for the oil by more than 500 tonnes a year.

But some question Iceland’s logic. Palm oil yields up to five times the oil per unit of land compared to other oils, and requires far less pesticide and fertiliser. It is not the problem but part of the solution, they argue.

Non-profit The Forest Trust (TFT) says transparency is the key, and that firms should engage more closely with their supply chains and use transformation tools available. Unilever plans to kick-start the industry and disclose all its palm oil suppliers and mills, saying: “We can only effectively address the systemic issues associated with how palm oil is cultivated and produced… if we know exactly where the problems are.”

Palm oil prices table

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