Palm oil has health, environmental and economic benefits, says a new study from the Institut économique Molinari

Media release

Paris, Thursday, September 13, 2012 – While campaigns against oil palm continue unabated, the Institut économique Molinari explains why many claims on the subject do not paint the full picture, or are plain wrong.

According to authors Hiroko Shimizu and Professor Pierre Desrochers, turning palm oil into a bugaboo is counterproductive. Rather, the focus should be on promoting systems that protect property rights in nations with a comparative advantage in palm oil production.

The impact of sensationalist campaigns by Greenpeace, Friends of the Earth and other NGOs has been so strong that firms like Nestlé and retailer chains including Carrefour, Casino and Système U have chosen to boycott suppliers or placed an outright ban on the vegetable oil.

Palm oil opponents have criticized it saying it endangers human health, harms the environment and reduces biodiversity. However, there is little basis for these accusations.

Palm Oil : zero trans fatty acids, and other valuable benefits

The success of palm oil is largely based on the fact that it is free of trans fats. These fats are formed when liquid oil is transformed into solid oil. The process, known as hydrogenation, gives rise to trans fatty acids that have been linked to heart conditions, higher bad cholesterol and lower good cholesterol levels. Yet, because palm oil is semi-solid at room temperature, it does not have to undergo the harmful process.

In France and elsewhere, the use of palm oil in food preparation has been under fire because it contains saturated fatty acids which can increase LDL cholesterol levels. Although this is true, cheese producers also know that products rich in saturated fats display other qualities, such as better oxidative stability, being creamier, and a high melting point.

Palm oil is stable at high heat and rich in anti-oxidants, carotenes (vitamin A) and vitamin E.

In practice, it means there are significant tradeoffs as a lower content in saturated fats implies less functionality, less flavor, less texture, decreased stability and higher costs.

Palm oil helps save resources: land and inputs

In 2011/12, palm oil contributed 32.7% of the world vegetable oil supply. This is good news: indeed, high yields in palm oil production have meant that large amounts of land as well as other inputs were saved, and will be continue to be saved as demand grows.

• Oil palm yields an average of 3.72 tons of oil per hectare compared to 0.40 tons and 0.72 tons respectively for soybean and rapeseed ;

• Oil palm trees produce almost 10 times more oil per hectare than soybean and more than 5 times more oil than rapeseed ;

• Oil palm delivers over three times more oil per unit of input ;

• In Malaysia, production increased 16 times since 1975 while the acreage was only increased fivefold;

• According to demographic projections and consumption patterns, 95 million hectares of land would have to be given over to soybean production by 2050 in order to meet the demand covered by 12 to 19 million hectares of oil palm.

Hence, the advantages of palm oil are very real, and they have helped secure its current success. Aggressive campaigns leading to “Palm Oil Free” labelling have tarnished the image of this oil, most of which is harvested in developing countries.

As the authors conclude: “their geographic situation gives them a comparative advantage in this sector and their current success should encourage Westerners to fight corruption and promote land tenure regimes that are protective of the rights of natives and small farmers”

You can find the full study, entitled “The health, environmental and economic benefits of palm oil” on our website.

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The Institut économique Molinari (IEM) is an independent, non-profit research and educational organization. Its mission is to promote an economic approach to the study of public policy issues by offering innovative solutions that foster prosperity for all.

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Information and requests for interviews :

Cécile Philippe, PhD

cecile@institutmolinari.org

+33 6 78 86 98 58