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.

Global production of palm oil

Source: USDA

Worldwide production of vegetable oils in million tons (2018)

Source: Oil World

TV report: Palm oil harvesting and processing

Vital income

In many tropical countries, palm oil production has driven rural development. Globally, palm oil is an important source of income for more than 7 million people. Although the cultivation areas of smallholder farms are small compared to industrial plantations, in Malaysia and Indonesia alone, small-scale production accounts for about 40 % of the total palm oil cultivation area (RSPO).

«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 2020, Switzerland imported 22’000 tons of palm oil and palm kernel oil for the food industry. Ten years ago, imports were 30 percent higher at 32’000 tons. Around 25 percent of palm oil imports come from Ivory Coast, Malaysia and the Solomon Islands each, 10 percent from Cambodia (more about the origin).

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

To limit the destruction of species-rich tropical forests, producers, financial institutions, civil society organisations, industry and trade founded the Round Table on Sustainable Palm Oil (RSPO) in 2004.

In 2021, more than 15 million tonnes, or 19% of global palm oil production, was RSPO certified. Estimates suggest that 20-25% of global production is certified according to a sustainability standard. This means that globally the majority of palm oil is still produced and traded without standards.

RSPO shows impact: RSPO now has more than 5000 member organisations in 100 countries. Over 168’000 smallholder farms are already RSPO certified, 6% more than in 2020. In 2021, RSPO saved as many greenhouse gas emissions as over 320’000 cars on the road.

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
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