Responsible Sourcing - Palm Oil

Responsible Sourcing: Palm Oil

Palm oil is the world’s most widely used vegetable oil. It is produced from the fruit of oil palm trees and is found in many household commodities due to its versatile nature. Palm oil uses include cooking oils, margarine, chocolate and most baked goods. Palm oil is in one in ten supermarket products, soaps and detergents, cosmetics and foods.  Demand for edible vegetable oil is predicted to double by 2030 and to triple by 2050, fuelling increased demand for palm oil.

Palm oil is a versatile, low-cost ingredient that is perfectly suited for making many food products. It is also highly productive, with a yield per hectare far greater than other vegetable oils. In fact, while it represents 38% of the world’s supply of edible oil, it is grown on only 5% of the land dedicated to oilseed crops. This means that palm oil, if grown responsibly, can play a key role in making our food systems capable of feeding a growing world population and eliminating hunger, while using less land, limiting greenhouse gas emissions and protecting ecosystems and biodiversity.

However, palm oil production in the wrong place can have significant negative impacts in terms of both climate change and biodiversity. The increasing demand for palm oil is increasing demand on land suitable for palm oil production.  The key production regions are Indonesia and Malaysia, where expansion of cultivation is driving the loss of prime forest.  Deforestation results in the loss of significant carbon stores from both the trees themselves and the sensitive peat soils underneath.  In addition the destruction of these forests is reducing the habitat available for critically endangered species such as orang-utans, elephants, rhinos and tigers. Palm oil cultivation and production is a hot topic for consumers, media and increasingly for governments which presents a challenge for supply chain/ CSR managers, marketers and business strategists.

ADAS can help your company reduce the risks associated with procurement of palm oil


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