A major issue regarding tropical forests is deforestation, which is linked to the expansion of areas designated for palm oil production. It should be noted that palm oil production has a very significant socio-economic effect in its producing countries, which makes the situation quite complex.
Palm oil is a vegetable oil derived from oil palms and is used in many consumer goods, ranging from food products to biofuels. In recent years, the global volume of palm oil production has increased to meet rising demand. Indonesia is the leading palm oil producer, producing 45.5 million tonnes of palm oil in 2022/2023. Malaysia, which supplies the second largest volume of palm oil to the market, is home to most of the leading palm oil production companies.
International trade
As one might expect, Indonesia and Malaysia are also the world's largest exporters of palm oil, shipping more than 28 million and 16 million tonnes to the market respectively in 2022/2023. India imports the most palm oil of any country, with the value of its imports in 2021 being approximately 9.6 billion US dollars. The USA imported more than 1.8 billion US dollars' worth of palm oil in 2021. In October 2021, palm oil stocks in the United States were approximately 353 million pounds.
Palm oil and deforestation
Palm oil is the most widely used vegetable oil globally, used not only in food production but also in cosmetics and other healthcare and hygiene products. Since 2016, palm oil consumption in the European Union has increased. It can be assumed that in the period from 2005 to 2012, the correlation between deforestation and the expansion of palm oil plantations is directly linked to the expansion of private and commercial palm oil plantations.
How has land use changed over time for palm oil production?
Area used (in millions of hectares)
Indonesia – 15
Rest of the world – 7.57
Malaysia – 5.3
Thailand – 0.94
Indonesia has made serious efforts to obtain certified sustainable palm oil plantations, ensuring they meet specific social and environmental standards. However, the production of certified palm oil still accounts for only a small fraction of total global output. In Latin America, only just under 470 thousand hectares of oil palm plantations have sustainability certification.
Global palm oil production volume in the 2021/2022 trading year was approximately 73.8 million tonnes, an increase from approximately 73 million tonnes in 2020/2021. Indonesia and Malaysia were the world's leading palm oil exporters during this period.
In 2022, the average price of palm oil was 1,276 USD/t.
https://www.statista.com/topics/6079/global-palm-oil-industry/