Palm Oil Complementing Oils and Fats Industry of the Americas

North America, South America, Central America, and the Caribbean Islands are all part of the Americas continent. This region is synonymous with soybeans because it is home to the world’s top three soybean producers; the USA, Brazil, and Argentina. Rapeseed oil and palm oil are the two main oils and fats import by the Americas. Palm oil import by this region was around 2.9 million MT in 2020, with US, Mexico, Colombia, Haiti and Canada as the top five importers. Malaysian palm oil import by the whole region consisted of about 620,000 MT in 2020, or about 22% from the overall palm oil import.    

Source : Oil World

In promoting palm oil in the Americas, what must be taken into account is the region’s sensitivity and strength as a soybean producer. The potential to market palm oil in this region is very bright, however, palm oil suppliers would have to compete against domestic soybean oil companies who control the oils and fats network. In USA, soybeans are among the major agricultural crops planted, behind only corn and more than 80% of soybeans are cultivated in the upper Midwest of US in states such as Illinois, Iowa and Minnesota. Throughout the years, the USA has been the biggest producer of soybeans but as of May 2020, Brazil overtook the US as the leading soybean producing country with a production volume of about 126 million MT in 2020/21. Soybean occupied about 48.9% of Brazil’s cropland during its growing season and contributed to about 42% of the country’s agricultural output.

Source : Oil World

Promoting Palm Oil in the Region

Promotional activities for palm oil and palm products in US and Brazil which are two major soybean producing countries, should be targeted and must complement the oils and fats needs of the industries which use palm oil in their applications. In 2020, total soybean oil consumption in USA was at 10.4 million MT or 43.3% from the total oils and fats consumption while palm oil consumption was at 1.7 million MT or 5.8%. USA imports of palm oil mainly comes from Indonesia and Malaysia. To increase intake, palm oil could complement domestic oils and fats application in the USA in sectors such as HORECA, personal care products, snacks and biscuits and blended oil.

Meanwhile in Brazil, soybean oil consumption was at 8.1 million MT (71%) while palm oil consumption was at 775,000 MT (6.7%) in 2020. Due to its availability from domestic palm oil production, palm oil is the second most consumed oil after soybean oil. In addition to domestically produced palm oil, Brazil also imported palm oil mostly from Indonesia (48%) and Colombia (42%). In order to complement their oils and fats industry, palm oil promotional programs should focus on sectors which can complement Brazilian oils and fats demand such as confectionery and bakery sectors.

Source : Oil World

Palm oil global use has grown immensely, but oil palm production has been closely scrutinised. Oil palm is the most efficient crop, requiring less amount of land to produce the same amount of oil than soybean or rapeseed crops. However, deforestation and habitat losses are often cited by anti-palm oil movements, who use misleading reporting and campaigns to gain attention. Smaller palm oil producing countries in the Americas, such as Colombia, Guatemala, and Honduras, have also been affected by these anti-palm oil campaigns. Since the Malaysian palm oil industry has made considerable progress towards achieving 100% palm oil sustainability, Malaysia should collaborate with the Americas palm oil producers to address this problem. Malaysian palm oil producers have responded positively in this issue, producing ample quantities of sustainable palm oil under MSPO certification so, joint promotional programs with MSPO will help to further strengthen our promotional efforts.

As a strategy to distinguish Malaysian palm oil from other commodities in the global edible oils and fats industry, there should also be strategies which include improvisation of its branding and image. Emphasis should be on the good quality backed up by research and development, as well as meeting sustainability requirements. More market-oriented research on nutrition, science, and the environment should be produced and more information about the benefits of Malaysian palm oil should be provided. New innovative strategies should be employed while also concentrating on addressing negative perceptions on Malaysian palm oil industry, particularly in the aspect of sustainability.

Prepared by  Nur Adibah Mohd Razali

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