Palm Oil Jamin Rivera, Diana McCarthy-‐Bercury, Padma Mahadevan, Agustina F. Besada 1. An Introduction to Palm Oil For many developing nations in tropical climates domestic produce is often considered as a staple ingredient for meals while outside investor simply define these goods as just another crop commodity; palm oil is no exception to this rule. Palm oil is an edible, natural liquid extracted from the fruit or kernel of palm trees. Palm Oil has many uses in both its natural and processed form. The oil is extracted from the fruit of the palm tree, processed and is used as an alternative, and less expensive greasy substance in which to fry foods. Originally, naturally extracted palm oil was primarily used in cooking, lotions and soaps. Traditionally, palm oil was a basic common ingredient in households throughout countries in sub-‐Saharan Africa, Southeast Asia and South America. Over the past few decades’ palm oil has evolved to become a more common ingredient throughout a more broad range of products. Products like processed foods, household cleaners, sweets and more recently palm oil is being tried as biofuel; an alternative to gasoline, diesel and other biofuels. In response to the market demands, many developing nations entered into the exportation palm oil industry. Countries like Indonesia and Malaysia quickly became leaders in the production of palm oil in large quantities. Emerging nations which are advancing steadily have also identified the financial and economic benefits of the palm oil industry and are actively developing their own infrastructure, one example is Brazil. As more nations become palm oil producers the international community has begun weighing the domestic positive benefits with the global negative implications. The overall goal is to find a sustainable balance that is both advantageous for developing countries as well as safe for the existing ecosystems and the global community. 2. Challenges of the Palm Oil Industry 2.1 Economic Factors
There are many economic factors that come into play when discussing the palm oil industry. The majority of countries that harvest palm oil are considered developing nations. These nations rely heavily upon the palm oil for both domestic purposes as well as a source of income from international exports. Approximately thirty-‐five countries export palm oil to the international community, however only a few of these countries dominate approximately 90% of all palm oil exports. The two largest of these countries are Indonesia and Malaysia. Both of these countries are developing nations who economies rely heavily upon the income earned by the production and exportation of palm oil. These countries