The World’s Growing Appetite for Palm Oil

Palm oil is a vegetable oil obtained from oil palms and is used in many consumer goods, from processed food to biofuel. In recent years, worldwide production of palm oil has increased in volume to meet demand.

Indonesia is the leading producer of palm oil, with a recorded 41.5 million thousand metric tons of palm oil produced in 2018/2019. Malaysia, which produces the second-largest amount of palm oil, is headquarters to the majority of the leading palm oil companies.

 Infographic: The World’s Growing Appetite for Palm Oil | Statista

According to the latest data from the United States Department of Agriculture, global annual palm oil production stood at 73 million metric tons in the fiscal year of 2019/20.

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The number is set to increase further to 77 million tons in the fiscal year of 2020/21, almost double the 2007/08 figure.

Palm oil is predominately used in foods like chocolate and ice cream, but also bread or potato chips. More than 65 percent of palm oil is used in foods.

At the same time, industrial uses, including the production of biofuels and cosmetics, is constantly expanding and now accounts for 31 percent of total consumption (compared to 21 percent in FY2007/08).

Which Countries Produce The Most Palm Oil?

Palm oil production has risen sharply over the past five decades thanks to its versatility and resilience. It doesn’t spoil easily and it has a high melting point, key advantages over other vegetable oils along with its cheaper price.

That has ensured that it is now present in a whole host of commonly used products including lipstick, shampoo, bread, chocolate and biodiesel. Annual production quadrupled between 1995 and 2015 and it is expected to quadruple again by 2050.

Infographic: Which Countries Produce The Most Palm Oil? | Statista

 Palm oil’s rise has had devastating consequences for the environment, given that it is cultivated in tropical rainforests.

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That has led to mass and uncontrolled deforestation, destroying the habitat of a number of endangered species including the orangutan, Sumatran tiger and Sumatran rhino.

It has also had an impact on rural regions of poorer countries where it has led to bigger incomes but also widespread labor violations and human rights abuses.

Given just how widespread palm oil has become, which countries produce it? Data from the United States Department of Agriculture shows that nearly 85 percent of palm oil production occurs in just two countries, Indonesia and Malaysia.

In 2019, Indonesia produced 42.5 million tons or 58 percent of global supply while Malaysia made 19 million tons or 26 percent.

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