palm oil to kill for
Once planted, the tropical tree can produce fruit for more than 30
years, providing much-needed employment for poor rural communities.
T
he benefits of the oil palm are difficult for Indonesia to ignore.
Once planted, the tropical tree can produce fruit for
more than 30 years, providing much-needed employment for
poor rural communities. And its oil is highly lucrative, due
largely to the fact that the plant yields more oil per hectare
than any major oilseed crop.
Indonesia is now the leading supplier for a global market that
demands more of the tree’s versatile oil for cooking, cosmetics, and biofuel. But palm oil’s appeal comes with significant
costs. Oil palm plantations often replace tropical forests,
killing endangered species, uprooting local communities, and
contributing to the release of climate-warming gases. Due
mostly to oil palm production, Indonesia emits more greenhouse gases than any country besides China and the United
States.
Like most crop-based commodities, Indonesian palm oil benefited mightily from the 2008 food crisis, as the price of the oil
rose above $1,000 a ton last spring. After dropping 56 percent
in value by year’s end, the price has since settled at around
$555 a ton as of last month.
The Center for Orangutan Protection
warned last year that the great ape may
become extinct in Central Kalimantan, a
region of the rapidly developing island of
Borneo, if the rate of plantation growth
continues for another two or three years.
PALM OIL
THE PRICE DROP/BIOFUEL
The price drop has put a significant dent in the palm oil
industry. Yet observers are confident that international buyers,
especially in China, India, and the Middle East, will continue
to buy more palm oil, regardless of the commodity’s environmental or social effects.
“Palm oil has become the edible oil of choice, if you will, for
much of the world,” said Michael Shean, a global crop analyst
with the U.S. Department of Agriculture (USDA). “More land
will have to come into line to meet that demand.”
62 TrafficMagazine/ Spring, 2014