Oil palms were introduced to Southeast Asia by European traders in the early 19th century, where the climate is more humid and therefore more conducive to oil palm growth.
Indonesia and Malaysia produce more than 85% of the world’s palm oil, while India and China are two of the largest importers of palm oil globally.
- Indonesia is a core palm oil growing, processing, and trading country, as well as a large consumer of palm oil.
- It is the world’s largest producer of palm oil and the largest producer of certified sustainable palm oil (CSPO), producing 51% of annual production capacity of CSPO.
- Indonesia has a total RSPO certified area of 1,612,515 hectares.
- Its first and second ranked growers by production area are Wilmar International and Sime Darby, which are based in Singapore and Malaysia respectively.
- Indonesia currently has 116 RSPO members.
- PT Mikie Oleo Nabati Industri was Indonesia’s first consumer goods manufacturer member of the RSPO.
- In 2011, pilot field testing of the Indonesia Sustainable Palm Oil (ISPO) certification scheme began. This government-initiated scheme was developed to better implement the country’s laws and regulations and is mandatory for all Indonesian growers.
- In September 2011, the Indonesian Palm Oil Association (GAPKI) left the RSPO and committed itself to the ISPO process.
- Malaysia is a core palm oil growing, processing, and trading country.
- 42% of annual production capacity of CSPO comes from Malaysia – the second largest producer of CSPO in the world.
- Malaysia has a total RSPO certified area of 735,310 hectares.
- Currently the country has 130 RSPO members,
- Consumer goods manufacturer members include Berg + Schmidt (M) Sdn Bhd and Custom Food Ingredients Sdn Bhd.
- China is the world’s third largest importer of palm oil after India and Europe. In 2010–2011, its palm oil imports amounted to approximately 6 million tonnes.
- About 70% of the palm oil imported is consumed as edible oil, and the instant noodle industry accounts for a large proportion of this.
- Demand for palm oil is expected to grow by about 10% per year in the coming years to keep pace with rising standards of living.
- Many of the large palm oil stakeholders operating in China are vertically integrated within the supply chain and are involved in a range of different activities, from importing and processing right through to manufacturing and retailing.
- The market for palm oil in China is highly price sensitive. There is still little demand for sustainable palm oil and unwillingness to pay a higher premium for certified sustainable palm oil (CSPO) when there are cheaper alternatives available.
- China’s first four members joined the RSPO in 2011 (two processors & traders and two consumer goods manufacturers). Since then another 48 members have joined.
- India is the world’s largest importer of palm oil. In 2015, its palm oil imports amounted to approximately 10 million tonnes.
- About 95% of the palm oil used in India is sold as edible oil to domestic and commercial consumers.
- The market for vegetable oils in the country is very much influenced by the government’s domestic import tariff policies.
- The Indian market is highly price sensitive. There is little demand for sustainable palm oil and unwillingness to pay a higher premium for CSPO when there are cheaper alternatives available.
- RSPO membership in India has increased from just four members in 2011 (all in the processors and traders category) to 46 members in 2016 including 6 from the consumer goods manufacturers sector.
- Japan is the worlds 14th largest importer of palm oil, at around 650,000 tonnes.
- Food producers are facing difficulties in passing on higher raw-material costs to consumers. The decreasing demand for soy oil has led to an increased demand for palm oil – palm oil consumption in Japan’s margarine production increased 1.2% to 52,572 tonnes in 2010, while soy oil use dropped 12% to 10,643 tonnes.
- Japan’s production of soy oil declined 14% to 401,455 tons, while imports of palm and palm-kernel oils increased 3.5% to 649,604 tonnes.
- Japan currently has 44 RSPO members.
- Pakistan is the 4th largest importer of palm oil globally, at around 3 million tonnes.
- In 2014, Pakistan imported 2.38 million tonnes of edible oils and fats, of which 95% was palm oil, 70% of which came from Indonesia and the rest from Malaysia.
- Palm oil is mainly used as a cooking oil as well as in other food products.
- Imports rose by 5 to 7% in 2015 due to an increasing demand from the food industry.
- It currently has two RSPO members; one consumer goods manufacturer, IFFCO Pakistan Pvt. Ltd., and one processor/trader, Nimir Industrial Chemicals Ltd.
- Russia is the ninth largest importer of palm oil in the world, importing around 800,000 tonnes, but accounts for only 2% of total global consumption.
- Around 90% of this oil is used to produce margarines and fats (for cooking, confectionery and substitutes for milkfat), while the remaining 10% is used in the manufacture of soap products.
- In 2015, imports of palm oil in the country rose by 37% compared to 2014. This was mostly due to cheese manufacturers using palm oil as a substitute for milk fat, to replace European cheeses and dairy products that used to be imported from the European Union until it was banned in August 2014.
- Russia plans to introduce a 30% excise tax on palm oil in the summer of 2016, to try and prevent the production of counterfeit dairy products (according to Rosselkhoznadzor; the department entrusted with monitoring the quality of products sold in the country; 78.3% of cheeses sold are counterfeit products, to which vegetable fat, usually palm oil, has been added).
- The Russian Union of Oils and Fats defined the maximum necessary level of palm oil use in Russia at 450,000 tonnes per year in 2012, which has now been exceeded by 76%.
- The increased use of palm oil and similar ingredients is connected to the drop in profitability and rise in production costs of the milk processing business in the country, seen over the last 2 years.
- Russia currently has 5 RSPO members, 3 of which are processors or traders.
- Whilst there are no large scale plantations on the island, the African oil palm (Elaeis guineensis) was first introduced to Singapore in 1875 by the Royal Botanic Gardens in Kew, where it was planted mainly for ornamental purposes in Singapore’s Botanic Gardens.
- Approximately 445,000 metric tonnes of palm oil is imported for domestic consumption every year.
- The Singapore Alliance for Sustainable Palm Oil was recently formed by 5 big companies; consumer goods giant Unilever, local manufacturer Ayam Brand, food and beverage company Danone, home furnishing retailer Ikea and Wildlife Reserves Singapore. The alliance is supported by environmental group World Wide Fund for Nature (WWF) Singapore and aims to get more manufacturers and retailers to use sustainable palm oil. The Alliance was set up in response to the severe haze in 2015 that was caused largely by palm oil producers clearing land for oil palm plantations through slash-and-burn techniques.
- Singapore has 41 RSPO members, including 6 oil palm growers such as Olam International, Golden Agri Resoursces Ltd and Bumitama Agri Ltd. Whilst these companies have headquarters in Singapore their plantations are in mainly in Indonesia and Malaysia.
- Thailand is an important palm oil growing, processing, and trading country.
- It is a distant third ranked producer of palm oil in the world.
- Thailand’s palm oil is largely grown by smallholder farmers; smallholders constitute approximately 98% of the country’s growers.
- At the end of 2011, RSPO together with the Thai Oil Palm and Palm Oil Association, Palm Oil Crushing Mill Association, Thai Biodiesel Producer Association, and Palm Oil Refinery Association announced the approval and publication of the National Interpretation (NI) of the RSPO in Thailand.
- The approved Thai NI allows the Thai Palm Oil Industry to certify palm oil as sustainable under the RSPO certification scheme. The Thai NI development process was supported by GIZ (Deutsche Gesellschaft für international Zusammenarbeit) and funded by the German Federal Ministry of Environment.
- Thailand has 64 RSPO members, including 13 growers.
- The total area of RSPO certified land is 12,903 ha.
- The Natural Palm Group Co. Ltd, owns a refinery in southern Thailand with a capacity of 600 metric tonnes per day.
SPOTT companies in this region
- Anglo-Eastern Plantations plc
- Asian Agri Group
- Astra Agro Lestari Tbk PT
- Austindo Nusantara Jaya Tbk PT
- Bakrie Sumatera Plantations Tbk PT
- Boustead Plantations Bhd
- Bumitama Agri Ltd
- Cargill Inc
- Daewoo International Corporation
- Darmex Agro Group PT
- Eagle High Plantations Tbk PT
- Felda Global Ventures Holdings Sdn Bhd
- First Resources Ltd
- Genting Plantations Bhd
- Glenealy Plantations Sdn Bhd
- Golden Agri Resources Ltd
- Hap Seng Plantation Holdings Bhd
- IJM Plantations Bhd
- IOI Corporation Bhd
- Jaya Tiasa Holdings Bhd
- Keck Seng (Malaysia) Bhd
- Kencana Agri Ltd
- KS Oils Ltd
- Kuala Lumpur Kepong Bhd
- Kulim (Malaysia) Bhd
- London Sumatra PP Tbk PT
- Malaysia Airport Holdings Bhd
- M.P. Evans Group plc
- Musim Mas Group PT
- Noble Group Ltd
- QL Resources Bhd
- R.E.A. Holdings plc
- Sampoerna Agro Tbk PT
- Sime Darby Plantation Sdn Bhd
- Salim Ivomas Pratama Tbk PT
- Socfin Group S.A.
- Sarawak Oil Palms Bhd
- Tradewinds Plantation Bhd
- Triputra Agro Persada Group PT
- TSH Resources Bhd
- Tunas Baru Lampung Tbk PT
- United Plantations Bhd
- Wilmar International Ltd
Resources and references
- GreenPalm: Kick-starting Sustainability in China and India
- Mongabay.com: Legislation and palm oil: South America and Southeast Asia
- Musim Mas: Establishing biogas plants to process Palm Oil Mill Effluent (POME)
- REA Holdings: Using the RSPO PalmGHG Greenhouse Gas Emissions Calculator
- Wild Asia: Biodiversity for Busy Managers (B4BM)
- Wild Asia: Wild Asia Group Scheme (WAGS)
- Wilmar International: The case of segregated versus mass balance
Last updated: 18/08/2016