The world faces a growing shortage of its most versatile edible oil, palm oil. The solution may lie with emerging producers, half a world away from the vast palm oil plantations of Southeast Asia.
In Malaysia and Indonesia, which now account for most of the world’s palm oil production, the aging trees that cover much of the region are becoming less productive. Meanwhile, workers are increasingly scarce and controls on deforestation have been tightened, making replanting more difficult.
The scenario is different thousands of miles away for new planters in Colombia and Guatemala. Here, some farmers produce almost double the amount of palm oil per hectare compared to their Southeast Asian counterparts. Furthermore, to comply with imminent European rules banning imports of crops from recently deforested land, producers are already intensely focusing on satellite and geolocation technology to ensure supply chains are fully traceable.
With high yields and the ability to attract a broad customer base, free from deforestation concerns, Latin America is emerging as a new frontier for palm oil, increasing competition, especially in Europe.
Farmers in Latin America “have learned from the mistakes made by Indonesia and Malaysia when it comes to deforestation,” said Khor Yu Leng, an economist at Segi Enam Advisors, a consultancy in Singapore. “Short, simple, visible, low-emissions supply chains must win the long-term game.”
Palm oil exports from Central and South America are increasing. They have increased by about 70% over the past decade, compared with just a 14% increase in global shipments, according to data from the US Department of Agriculture – a sharp increase even though exports from these regions still represent just 5% of the total. worldwide, compared to almost 90% in Indonesia and Malaysia.
Colombia is already the fourth largest producer in the world and has “a lot of space” to develop its 600,000 hectares of plantations, according to Nicolás Pérez Marulanda, executive president of the National Federation of Palm Oil Producers.
The government has identified about 5 million hectares that are highly suitable for palm trees without the need for deforestation, Pérez said. An expansion of this size would put the country on par with Malaysia in terms of area.
Producers in Colombia are preparing to meet the new requirements of European deforestation rules, and both the country and Latin America have the opportunity to become reliable sources of sustainable palm oil for high-end markets like Europe.
Meanwhile, farmers in Guatemala, Latin America’s biggest palm oil exporter, are also seeing an increase in European demand because the country can show its production is deforestation-free through third-party satellite monitoring and certification. sustainable.
Indonesia and Malaysia also use satellites and drones to demonstrate traceability and prove sustainability and have certification systems in place. Still, the challenges are much greater due to the vast size of the plantations, and it has been an uphill struggle to alleviate European concerns about palm oil and deforestation.
2024-04-15 22:21:42