Slippery slope

India’s palm oil industry is in urgent need of renewed plans and ambition

Published 5 years ago on Oct 31, 2019 1 minute Read

Found in nearly half of world’s FMCG products, palmolein oil is undeniably, a crucial asset for multinational companies. However, fair-trade is not a phrase synonymous with this industry. Giants such as Unilever, Nestlé, PepsiCo, Mondelēz, Kellogg’s and Hershey’s, despite committing to use of sustainable palm oil, have been accused of sourcing it from illegal plantations in the protected Rawa Singkil Wildlife Reserve of Indonesia. While one might think these developments in far-away Indonesia or Malaysia don’t necessarily affect India, problems are soon to strike much closer home.

With its ever-expanding population, India is both the biggest importer as well as the world’s largest consumer of palm oil. It has emerged as the cheapest and most versatile oil, with its application ranging from lipsticks and shaving foams to medicines and biscuits. It costs 20% cheaper than regular vegetable oil and since domestic production is limited, large-scale imports are inevitable. Apart from being one of the leading causes of deforestation, the global palm oil industry is also undergoing turbulent times with Asia’s latest trade war. It started when Malaysian Prime Minister Mahathir Mohamad criticised India’s policy in Kashmir, which led to Indian importers calling to boycott Malaysian palm oil. Indian buyers switched to Indonesia over restrictions or tax hikes on Malaysian imports. 

It is only in India’s and the world’s best interests to secure a sustainable, clean supply of what is an important commodity, but the reliance on our Asian neighbours is likely to continue, since the palm's water-guzzling characteristics will have a direct, detrimental impact on India’s already stressed ground table.