29. Palm Oil

"The oil palm (Elaeis guineensis) is a remarkable tropical crop that has revolutionized the vegetable oil industry. Native to West Africa, this versatile palm species has been cultivated for thousands of years and has gained immense commercial importance in recent decades."

Palm oil is the largest vegetable oil production in the world close to 80 million tonnes. (It used to be 2 million tonnes in 1970, and like the rest of the vegetable oils, it has grown significantly.)

"Palm oil is a very productive crop; it produces over a third of the world’s oil but uses less than a tenth of croplands devoted to oil production." 

On the recent negative conversation around Palm Oil:

"Global demand for vegetable oils has increased rapidly over the last 50 years. As palm oil is the most productive oil crop, it has taken up a lot of this production. This has had a negative impact on the environment, particularly in Indonesia and Malaysia. But it’s not clear that the alternatives would have fared any better. In fact, because we can produce up to 20 times as much oil per hectare from palm versus the alternatives, it has probably spared a lot of environmental impacts from elsewhere."

Uses of Palm Oil 

"Palm oil is very versatile and is used in a range of products across the world:

Foods: over two-thirds (68%) is used in foods ranging from margarine to chocolate, pizzas, bread, cooking oils, and food for farmed animals;

Industrial applications: 27% is used in industrial applications and consumer products such as soaps, detergents, cosmetics and cleaning agents;

Bioenergy: 5% is used as biofuels for transport, electricity, or heat."

Oil palms are perennial crops with a productive lifespan of 25-30 years. They produce two types of oil: palm oil from the fruit’s flesh and palm kernel oil from the seed

"Palm oil is traditionally, and still industrially, produced by milling the fruits of oil palm."

Production

Following two charts show palm oil production across the globe, first in 1961, dominated by Nigeria, and as of now, where Indonesia and Malysia are the key producing countries.

Oil Palm is best grown close to equator

Of the total 79 million tonnes of palm oil, Indonesia and Malaysia contributed ~ 65 million tonnes.

Following is the acreage devoted to different oil crops, and then to Oil palm across the key countries:

So although the acreage has increased over time, the yields seem to have improved significantly to deliver the production volumes in the charts earlier.

Here perhaps the standout is Nigeria. Malaysia has a production of 18.5 million tonnes and Nigeria, 1.42 million tonnes, but the acreage is not significantly different.

Here's a look at the yield. The data is from 2013, and to be referred as indicative only.

FFB = Fresh Fruit Bunch, CPO= Crude Palm Oil

OER = Oil Extraction Rate. Note the rates for Malaysia against Nigeria. Both the FFB rate (fruit per hecatre) and the OER from that fruit.

In Nigeria, small holders.

From here.

The traditional and semi-mechanised methods used by small holders for processing fruit bunches are inefficient. Consequently, losses of between 25 – 50% of potential palm oil production are incurred.

Impact:  In most of the oil palm belt of Nigeria, the oil palm is intercropped with food crops by the small holders because of:

- Diminishing land for food crop production in high areas of the oil palm belt; and inter-cropped with population density

- The need to offset part of the initial investment in the oil main crop, which has a long gestation period.

This practice was for many years criticized by the World Bank, which advocated sole cropping in its Small-Holder Assisted Projects because of the fear of harmful effect of arable crops on oil palm growth and yield. Consequently these projects failed in some states because the farmers insisted on intercropping.

With the outcome of these studies at NIFOR, the World Bank now accepts oil palm/arable crop inter-cropping as agronomic and economically sound system, which should be encouraged among smallholder farmers.