Palm oil is a very significant part of the products of our daily use such as shampoo, cosmetics, soap, detergents, toothpaste, and edible products like biscuits, cooking oil, snacks, chocolate, instant noodles, packaged bread, and much more.
The government’s public distribution system relies heavily upon it. The supply chain however is not a healthy structure and does not have a good certificate on the impact on the environment front. Hence Indian government is looking for sustainable palm oil which has lesser consequences upon the environment.
Sustainable palm oil helps address various environmental concerns such as deforestation, water, and community rights.
Bhavna Prasad, Director, Sustainable Business, World Wide Fund (WWF) India said in the FMCG (fast-moving consumer goods) market, “almost 50 percent of the products in our supermarket currently have palm oil in one form or another whether it is biscuits, chips, soaps, shampoos, toothpaste or even bakery items.”
India is the world’s largest importer and second-largest consumer of Palm oil, and the consumption would have gone up further if not for Covid 19 disrupting the trend. Kamal Prakash Seth, Deputy Director, Market Transformation (Global), Roundtable on Sustainable Palm Oil (RSPO), told Mongabay-India “Had it not been for COVID-19, India would have touched almost 10 million metric tonnes in palm oil consumption.
India has been the world’s largest importer of palm oil for many years now. In the year 2018-19, it touched almost 9.3 to 9.5 million metric tonnes of consumption. In 2019-20 and 2020-21, which happens to be the COVID-19 year, the consumption fell to nearly 8 million metric tonnes,”
Seth moreover emphasized that “we spend about 10 billion US dollars on edible oil import and out of this, 60-70 percent goes for palm import – mostly from Malaysia and Indonesia. Therefore India can play a huge role in making this industry more sustainable globally.”
He further elaborated that, if we see in industry consumption, “30 to 40 percent is used in the HoReCa sector, which is hotel, restaurants and catering industries. Then comes the food processing industries like bakery, cookies, biscuits – all kinds of items where refined palm oil is an essential ingredient. It takes around 20-22 percent.”
“Then non-edible sectors like soap, shampoo, detergents and so on, consume another 20 percent. If you combine all these sectors, the net consumption is around 50 to 60 percent of total palm oil. Then there is an element called blended palm oil. Around 40 percent of palm oil is blended with other edible oils which are used for cooking purposes,” Seth said.
According to the report by Mongabay India, India’s palm oil consumption has increased almost 200 percent over the last 20 years, and with the expansion in the consumerist market system. In the coming years, with concerns of food security and nutritional needs, it is only expected to increase further.
B.V. Mehta, executive director, Solvent Extractors’ Association of India (SEAI), a vegetable oil industry body, said that “Palm oil is everywhere today in the Indian market … because it is comparatively cheaper and its imports are quicker.”
Moreover, he added, “For instance, one can get palm oil from Malaysia and Indonesia in 10 days compared to about 40 days to get soya oil from Argentina … palm oil accounts for about 60 percent of India’s vegetable oil consumption but it is not the only source … we also have sunflower and soya too.”
India’s palm oil supply comes from basically two countries, Malaysia and Indonesia. Around 90 percent of the global supply comes to India. However, the Indian industry is aware of the deforestation and peatland destruction issues that are making this large-scale availability possible. So the country is looking for alternate means of supply to meet the requirements.
Over the years, several Indian Companies have promised and committed to working upon a sustainable supply chain of palm oil.
Though these high demands of India are met and it is aware of the cost it is paying to achieve that, the country still has a long way to go to avoid this environmental destruction. The government is trying to improve the domestic industry so that it does not have to import.
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