Palm oil

Palm oil

Palm oil has many advantages. This vegetable oil gives many foods the right texture and consistency. Its neutral taste, heat resistance and great versatility in foodstuff production make it an extremely attractive oil in the industry. Moreover, oil palms are a high-yield crop. They need less land than any other oilseed crops, are more resistant to disease than other crops and generate consistent yields for up to 30 years. That makes palm oil cheaper than other oils.

Comparison of the yield efficiency of vegetable oils

Source: Oil World

The global palm oil boom

In the past 20 years, palm oil production has more than tripled. Indonesia and Malaysia account for 84% of worldwide production. Currently, palm oil is the most used vegetable oil in the world.

Worldwide production of vegetable oils (2018)

Source: Oil World

Vital income

In many tropical countries, palm oil production has become one of the most important drivers of rural development. In Indonesia and Malaysia, around 4.5 million people earn their livelihood from palm oil production, processing and trading. Around 3 million smallholders worldwide make their living from palm oil cultivation.

«SECO works to promote the use of sustainability labels and standards in the production of agricultural raw materials. That is why it is also involved in the development of sustainable palm oil supply chains.»

Monica Rubiolo, Head Trade Promotion SECO

Decline in palm oil imports

In 2019, Switzerland imported 23,700 metric tons of palm oil and palm kernel oil for the food industry. A decade ago and at 32,000 metric tons, the volume of imports was one-third higher than it is today. Malaysia and the Solomon Islands each account for around 30% of the palm (kernel) oil imports. Other source countries include Cote d’Ivoire, Papua New Guinea and Cambodia.

The problem

In the wake of the global palm oil boom, new plantations are being created not only in Indonesia and Malaysia but also in other tropical countries, such as Papua New Guinea, Colombia, Nigeria and Cote d’Ivoire. New palm oil plantations often replace valuable tropical rainforests, thus robbing many species of their habitats. Slash-and-burn agriculture and the draining of peat swamp forests are releasing large amounts of greenhouse gases such as carbon dioxide and methane. New plantations often also trigger conflicts over land use.

Sustainability

In 2004, producers joined forces with financial institutes and representatives of society, industry and trade to form the Roundtable on Sustainable Palm Oil (RSPO) in an attempt to limit the destruction of tropical forests and consequently the habitats of countless species. Fifteen years later, it is satisfying to note that 20% of worldwide production is now sustainable and certified. Nonetheless, as the majority of producers continue to produce and market palm oil without implementing any standards, the RSPO and its monitoring systems continue to be under fire. Critics point to internal shortcomings and institutional weaknesses (a lack of monitoring and a weak whistleblower mechanism). These are some of the issues that the Palm Oil Network aims to tackle.

Radio report (in German): Malaysian palm oil – the bitter fight for sustainability

Alternatives

Switzerland’s palm oil imports have declined because manufacturers are partly switching to alternative oils derived from soybeans, coconut, sunflower or rapeseed. A transition from palm oil to other oils, however, does not solve the problem because the alternatives are hardly any better: coconut plantations would have to be created in the Philippines and Indonesia. Likewise, soy plantations would have to be created in South America. Moreover, to produce one litre of oil from sunflower or rapeseed, a much larger area is required for the cultivation these crops.

«If you take a look at the catastrophic effects of palm oil (...), you realise that there are no easy solutions. Half of the world's population uses palm oil in its food. If you ban or boycott it, it will simply be replaced by other oils. At the same time, however, you will need far more acreage to grow the crop.»

Inger Andersen, former Director General IUCN