Chapter 5 - Global Politics of Palm Oil

Summary

Our Palm Oil Conundrum

First published in Diplomatic Voice, Volume 1 2017.

The latitude and tropical weather of Malaysia create the ideal conditions for the oil palm tree to flourish. The country is currently the world's secondlargest producer of this “golden crop”. Malaysia held the pole position until 2008, when Indonesia became the world's biggest producer, a position it still proudly holds today. Combined, Indonesia and Malaysia produce more than eighty per cent of the world's palm oil.

Palm oil is one of the most important type of oils, or fats, available in the world today. Its use is ubiquitous; palm oil is not only a common ingredient in foodstuffs but it is also widely used in the cosmetics industry and in cleaning products. It is also increasingly used as a biofuel.

The demand for this “green gold” has kept prices high on the commodity markets and has been credited with bringing about national development and improving standards of living across the board in producing countries. As the world population continues to increase, the demand for oils and fats is expected to continue to rise.

The oil palm is one of the most efficient oil crops for oils and fats. A relatively large amount of palm oil can be produced from quite a small area of land. For the same quantity, soya bean oil production would require almost ten times the land area. This means less land is exploited to produce a target amount of palm oil compared to any other vegetable oil.

Palm oil, unfortunately, has been linked to several environmentally unsustainable practices. These include deforestation, fires and hazepollution, habitat loss for endangered animals, and reduced biodiversity as a result of mono-cropping. Furthermore, some palm oil plantations have faced allegations of land grabs and human rights violations. The “healthiness” of palm oil for consumption had also been an issue in the past, but this has largely been debunked—palm oil's safety for consumption is no different than other widely available vegetable oils in the market.

Because of such perceived issues, there have been various campaigns in developed countries, especially in Europe and Australia, seeking to discourage consumers from buying products containing palm oil. These campaigns have been relatively successful, and some products have met with commercial success simply by promoting the fact they do not use palm oil.