Why palm oil demand is increasing and what this means for Canadian suppliers

Palm oil/Shutterstock

By now, you’ve probably read a thing or two about palm oil.

This could be the basics of what palm oil is used for, a debate about whether palm oil is good or bad for you, the effects of palm oil production on the environment, or more general opinion pieces on the topic.

The conversation around this edible vegetable oil has been wide-ranging and passionate. So to help us gain a greater understanding of the impact that palm oil has on Canada, we spoke with the business development officer at Natu’oil Services Inc., Jamil Jaffer.

His company recently completed the Greater Vancouver Board of Trade‘s Trade Accelerator Program (TAP) which helps firms work towards expansion of exporting services. Natu’Oil Services Inc. currently sells to the Canadian market, Malaysia, and India, they hope to enter the Chinese and Japanese markets.

Is there a market demand for palm oil from a Natu’oil trade perspective?

“Market demand for palm oil continues to increase, especially in the food sector, as manufacturers respond to consumer demand for natural products. Palm oil is an affordable clean label solution to replace hydrogenated vegetable oils and other man-made fats,” says Jamil Jaffer.

What makes your product sustainable?

Natu’oil is leading the way to provide 100% certified sustainable segregated level palm oil in Canada, according to Jaffer.

“Palm oil has two main sustainable advantages over other vegetable oils: i) being a perennial crop with year-round production, and ii) having the highest yield of any vegetable oil crop with the highest energy efficiency. Our team has been the first to market with palm oil products that are certified sustainable by the Roundtable on Sustainable Palm Oil (RSPO).

What would you say to people concerned about the ethics of palm oil production?

Palm oil’s high yield and affordability have helped to increase its popularity, but the indiscriminate development of palm oil plantations has led to widespread deforestation and loss of biodiversity.

Jaffer notes that his company is often asked about the effect that palm oil has on deforestation and biodiversity.

“It’s also important to consider what impact palm oil cultivation has on local communities and workers. Sourcing certified sustainable palm oil is the best way to ensure that there has been a reconciliation of environmental protection, social equity and economic prosperity.”

Do you feel there are any misconceptions about the use of palm oil?

Palm oil is an ingredient in more products than you think, as Jaffer points out.

“People may be surprised to learn that palm oil is very common in prepared food items and personal care products. Many of the products available on the grocery store shelves contain palm oil or its derivatives. From baked goods and ice cream to soaps and chocolate, palm oil is an important ingredient.”

He adds that global palm oil production “exceeds that of soybean oil and canola oil.” Palm oil and its derivatives are also used in the “manufacturing of animal feeds, biodiesel, and oleochemicals,” says Jaffer.

What steps is Natu’oil taking to address concerns about environmental and ethical issues surrounding palm oil?

“We believe that the best was to reduce the environmental impact and address social issues present in the palm oil industry is to actively promote sustainably produced palm oil.

In North America, there has been a limited uptake of sustainable palm oil. This is due to a combination of supply chain limitations and an unwillingness of the market to incur an increased cost.

Many manufacturers don’t know how to access sustainably-produced alternatives and are purchasing from the conventional palm oil supply chain, while only 50% of the sustainable palm oil currently being produced is taken up by the global market.”

Jaffer says this is where the Natu’oil team can leverage their expertise to create impact.

“By increasing the market access to sustainably produced palm oil, we can support farmers that are using sustainable methods. We have developed a supply chain model that improves the availability of sustainable palm oil while concordantly educating the market on how to transition quickly and affordably from conventionally produced palm oil to sustainable palm oil.”

He adds that as part of their effort, Natu’oil has partnered with the Malaysian Palm Oil Council (MPOC), Malaysian Palm Oil Board (MPOB), and the US affiliate Global Agri-trade Corporation to produce the Palm Oil Seminar Series.

“Since 2014, we have had great success hosting this educational event in different cities across North America, with an emphasis on showing companies how they can effect positive change through their raw ingredient sourcing decisions.”

In your opinion, what does the future look like for a palm oil supplier in Canada?

“The future looks promising and we are excited to continue to help grow this sector in Canada. With our experienced team, Natu’oil is well positioned to provide a clean label and sustainable palm oil to the market.”