The US and Canada are two of the world’s major consumer markets; however, their palm oil consumption is relatively low with domestically produced soybean and corn oils dominating the edible oils market. Consequently, the issue of sustainable palm oil sourcing has not been a high priority for companies in North America, and there is still a relatively low level of awareness of the impacts of palm oil production among consumers.
Latin America represents another new frontier for oil palm expansion, as the availability of suitable land in Malaysia and Indonesia becomes increasingly limited and global demand for palm oil continues to grow. Oil palm cultivation has already increased rapidly in the last decade at around 3.6% annually, and in some countries at a much higher rate.
As Central and South America holds more than one quarter of the world’s forest area, and two-thirds of its tropical rainforests, it is vital that the region adopts sustainable practices in palm oil production to avoid the negative impacts occurring in other regions such as Southeast Asia.
- Domestic palm oil consumption in Canada was 88,000 metric tonnes in 2015, a relatively small amount compared to global use.
- 26 companies are members of the RSPO; including 9 Canadian consumer goods manufacturers as well as 3 retailers (Loblaws Inc., Sobeys National Merchandising Group and Tim Hortons Inc.) and one palm oil processor and trader (Natu’oil Service Inc.).
- By law, if food products contain palm oil it must be listed in the ingredients, and the general term “vegetable oil” is not acceptable.
- Total US domestic consumption of palm oil is currently only 1 million tonnes, which represents only 2% of global use and only about 8% of total domestic vegetable oil consumption.
- The US became the RSPO’s seventh largest membership base in 2011.
- US membership in the RSPO spans a broad spectrum, including consumer goods manufacturers, cosmetics companies, processors & traders, the financial sector, retailers, and NGOs.
- US headquartered global companies—Walmart, Hersheys, Citigroup, and McDonald’s Corporation—have joined the RSPO.
- These newer members join other established names who had joined previously, including PepsiCo, P&G, Avon, MARS Incorporated.
- Five US-based environmental/conservation organisations have also joined: National Wildlife Federation, Orang Utan Republik Foundation, Conservation International, World Resources Institute, and Cheyenne Mountain Zoo.
- WWF-US has directly engaged major companies that use palm oil in their global supply chains, including General Mills, Johnson & Johnson, Kellogg’s, Kraft Foods, Mars, Proctor & Gamble and Walmart. Because of this engagement, many of these US food companies and retailers have joined the RSPO and committed to source 100% certified sustainable palm oil by 2015.
- Food labelling regulations (Code of Federal Regulations Title 21) state that ingredients shall be listed by common or usual name. Blends of vegetable oils may be listed as ‘blend of vegetable oils’, followed by the common or usual name of each individual oil in parentheses.
- Both production and consumption of palm oil are on the increase in the region.
- In total, 12 countries in Latin America grow commercial oil palm, contributing nearly 6% of global production per annum.
- Colombia is the region’s largest palm oil producer and is among the top five producers worldwide. As of 2012, the country had more than 400,000 hectares of oil palm, with production expected to increase sixfold by 2020, requiring around 2.8 million hectares of land.
- In Ecuador, palm oil production has grown 7% per year over the past decade, with 250,000 hectares in production.
- Peru only had around 56,000 hectares of oil palm concessions as of 2011, although production more than doubled between 2006 and 2012.
- Brazil has around 141,000 hectares of oil palm plantations in the state of Para, with plans to increase that number to 688,000 hectares by 2022 (original figures taken from ICAA presenta libro sobre cambio de uso de suelo en la Amazonía para cultivo de palma aceitera).
- Honduras, Guatemala and Costa Rica have hundreds of thousands of hectares under production
- The main challenge facing Latin America is its rate of deforestation, which is among the highest in the world.
- In 2011, RSPO hit its first 1 million hectares of certified production area worldwide, which was made possible by the certification of Agropalma’s mills and supply base. This also marked the inaugural certification of sustainable palm oil in Brazil.
- Thirteen new plantations and mills were expected to be certified in 2015.
- As of 2015, RSPO has 64 members in Latin America, 26 of which are oil palm growers managing more than 250,000 hectares of oil palm plantations.
- Total CSPO production has reached 275,000 metric tonnes – derived from 59,000 hectares of plantations and eight RSPO-certified extractors located in Brazil, Colombia, Guatemala and Ecuador.
- Sustainably produced palm oil is expected to exceed more than a million tons by the year’s end. Achieving this milestone would turn Latin America into the region with the highest percentage of sustainable palm oil in the world.
- While palm oil in other regions is harvested from the African oil palm, Elaeis guineensis, the American oil palm, Elaeis oleifera, is naturally distributed in Central America, from Honduras to Colombia, and in the Amazon region. The Maripa palm, Attalea maripa, is another oil palm native to tropical South America and Trinidad and Tobago, also grown for palm oil production, though to a far lesser extent and impact than African oil palm, Elaeis guineensis.
- In addition to palm oil, Brazil is a significant producer of other key commodities. It is one of the world’s biggest exporters of soy, sugar, beef, and coffee.
SPOTT companies in this region
Resources and references
- Agropalma – Forest Patrol Programme: conservation of forest integrity and biodiversity protection
- Deforestation and palm oil cultivation in Latin America
- Food Labelling Laws in Canada
- Food Labelling Laws in US
- ICAA presenta libro sobre cambio de uso de suelo en la Amazonía para cultivo de palma aceitera
- Palm oil in the North American consumer market
- Soybean and oil palm expansion in South America: a review of main trends and implications
- Walmart – Walmart’s Challenge: Sourcing Sustainable Palm Oil by 2015
Last updated: 17/08/2016