The Benefits of Palm Oil

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Palm oil is used in about 50 per cent of all the products sold in a typical supermarket, and with good reason. 

It is extremely versatile, has lifted millions of people out of poverty and, properly managed, can be beneficial for the environment.

Palm oil is found in everything from ice cream to shampoo, with global per capita consumption reaching 7.7 kg in 2015 according to Gro Intelligence.

So what is it that makes the oil so popular? Here are three main reasons:


Efficiency

Oil palms are significantly more efficient than other oil-producing crops. A single hectare of land can produce 4.17 metric tons of palm oil a year, compared to just 0.56 tons of sunflower oil, 0.39 tons of soybean oil and 0.16 tons of groundnut oil. In fact in 2016 oil palm used just 7 per cent of the world’s oil farming land while accounting for 32 per cent of production.

That means that significantly less land needs to be cleared to meet demand for vegetable oil, as other crops require at least five times more land to produce the same volume as oil palms.

Oil palms also require significantly lower quantities of fertilizer, pesticides and energy. To produce a ton of soybean oil requires 315kg of fertilizer, 29kg of pesticides and 2.9 gigajoules of energy, compared to just 47kg of fertilizer, 2kg of pesticides and 0.5 gigajoules of power to produce the equivalent amount of palm oil, according to The Guardian.

Asian Agri combines these benefits with a commitment to ensuring that our entire supply chain adopts best practices in the production of sustainable palm oil.

We became a member of the Roundtable on Sustainable Palm Oil (RSPO) in 2006 and achieved our first RSPO certification in 2010. We have a time-bound plan to be fully certified by the end of 2018, and are working with smallholder farmers to help them gain certification.

All of our mills, plantations and smallholders have held International Sustainability & Carbon Certification (ISCC) since 2014.

Asian Agri is also part of the Indonesian Sustainable Palm Oil (ISPO) scheme, established by the Indonesian Ministry of Agriculture, and we are now 91% ISPO certified.

 

Economic benefits

The palm oil industry has helped lift millions of people out of poverty in Indonesia and Malaysia, which together account for around 85 per cent of global production. Oil palm plantations have created millions of well-paying jobs, and enabled tens of thousands of smallholder farmers to own their own land.

In Indonesia the palm oil industry accounts for 1.6 per cent of GDP and employs 4.5 million people. As the majority of the harvest is exported the industry brings in more than $18 billion a year in foreign exchange, the single biggest contributor in the country.

Asian Agri partners with 30,000 smallholder farmers as part of our One to One Commitment, which is our target to match each hectare of our own land with land owned by smallholders by the end of 2018. Smallholders represent 42 per cent of palm oil plantations in Indonesia but account for just 37 per cent of production, so our partnership provides an important way to increase their productivity and therefore their living standards.


Versatility

Palm oil has a long shelf life and is solid at room temperature, making it an ideal ingredient in a wide variety of foods. It gained significant popularity since the 1990s as manufacturers looked for alternatives to unhealthy hydrogenated and partially-hydrogenated fats. Like most natural seed oils, palm oil contains less than one per cent trans fats so can play an important role in a healthier diet.

It’s stable at high temperatures so is ideal for use in cooking and frying, while its high melting point makes it a cost-effective replacement for animal fats in products such as spreads and baked goods.

Palm oil is used to manufacture sodium lauryl sulfate, which is used as a foaming agent in many body care products such as soap and toothpaste, and is also often added to household cleaning products.

Its fat content also makes it an ideal emulsifier for moisturisers, makeup and even candles.