PT Sinar Mas Agro Resources and Technology Tbk: Top Five Palm Oil Facts You Need to Know

Imagine this. You walk through the cooking oil section of the supermarket and wonder which oil would best meet your family’s nutritional needs – from sunflower, canola, peanut to palm oil, and the list goes on! How do you decide which cooking oil works for you and your family? Well, that will depend on how much you know about different types of cooking oils, beyond the few you know.

Let’s talk about palm oil. Few people seem to know the basic facts about palm oil, let alone the long list of everyday consumables made using this highly versatile ingredient, which makes it all the more relevant for us to learn more at this subject.

Consumers browsing the supermarket.

1. Palm oil is made from the fruits of oil palm trees, grown in the tropics.

Palm oil is produced from the fruits of oil palm trees. Due to the specific conditions needed to grow oil palm – lots of sun, high temperatures and rainfall – it can only be grown in tropical regions. The oil is extracted from the bulk fruits of fresh fruit bunches (FFBs). While the flesh of the fruit is used to produce palm oil, the inner seed is refined into palm kernel oil.

The major producers of palm oil are Indonesia and Malaysia, which together account for nearly 85% of global palm oil production.

Bulk fruits from fresh fruit bunches (FFB).

2. It is a resource-saving, healthy and versatile ingredient.

Palm oil is the most resource efficient vegetable oil. This is because oil palms require much less land to produce the same yield as other oils. For example, each hectare of land producing 0.7 tons of sunflower oil will be able to produce 3.8 tons of palm oil. The same amount of land can produce more than five times the usual amount of oil when growing oil palms!

Not only is the yield higher, but the nutritional content is much higher, in the case of palm oil. It is rich in antioxidants, namely vitamin E, which supports the immune system, prevents heart disease and lowers the risk of cancer. Versatile and effective, palm oil is a widely used vegetable oil and a key ingredient in the preparation of a range of other products, from cakes to cosmetics.

A few ways palm oil is the most productive vegetable oil. Source: European Commission Report 2018.

3. Palm oil can be produced responsibly, using sustainable farming methods.

Despite its benefits, palm oil production is notorious for being unsustainable. To clear land for oil palm plantations, forests must be cut down. This has impacted some local communities and wildlife. And unfortunately, many of these forests are often cleared using unsustainable methods like burning, which increase air pollution and soil erosion.

However, palm oil can be produced in an environmentally friendly way. Agriculture can be sustainable if proper regulations and methods are followed for sustainable oil palm cultivation.

Golden Agri-Resources (GAR) is committed to ensuring that palm oil is produced responsibly:

  1. Since 1997, GAR has adopted a policy of no deforestation and zero burning, which makes it possible to sustainably cultivate oil palms without burning the forests.

  2. GAR is working towards a more traceable supply chain to ensure the entire journey from seed to shelf is tracked in a responsible and sustainable manner. In 2021, we successfully implemented 95% traceability to planting (TTP) for our entire supply chain. This ensures transparency within the entire supply chain, which also promotes the adoption of sustainable production practices at an industry level. We always aim for 100% TTP.

  3. GAR has a strict zero tolerance policy towards the hunting, injury, possession and killing of rare and endangered species. As part of this, we have identified High Conservation Value (HCV) areas and rare and endangered species in our concessions and surrounding areas and have put in place appropriate safeguards to closely monitor biodiversity in our plantations and our grants.

4. Palm oil is used to make a range of everyday consumer products, from cakes to cosmetics.

Palm oil is the most versatile of all the different types of vegetable oil. It can be refined into a wide assortment of products with different physical characteristics, melting points and textures. The list includes foods, cosmetics, biofuels, pharmaceuticals and animal feed supplements.

It is most commonly used in baked goods such as cakes and cookies. It also comes in the form of margarine. Unknown to most, it can also be found in cosmetics like lipsticks. Rich in antioxidants (which reduce the signs of aging), palm oil is an obvious choice for the cosmetics industry. That’s not all. Glycerin derived from palm oil can be used to make pharmaceuticals, mainly cough syrups and oral hygiene products. This multi-faceted ingredient can also be used to produce animal feed supplements.

Crude palm oil is frequently used as biofuel, which could be used to generate electricity. In a nutshell (not literally, in this case), here’s an ingredient that gives the best value, with little to no unused parts. This is the minimum waste.

5. Palm oil production is expected to increase further.

What next? With the increasing number of people switching to healthier plant-based diets, a simultaneous increase in demand for vegetable oils, such as palm oil, is predicted.

As reported by Oil World, production of four vegetable oils – palm oil, sunflower oil, soybean oil and rapeseed oil is expected to increase by around seven million tonnes in 2022.

Increasing palm oil production does not have to lead to negative impacts on the planet or people. Increasingly, regulators in Indonesia and customers around the world are demanding sustainably produced palm oil that is traceable back to the plantation. This emphasis on palm oil cultivation encourages better agricultural practices resulting in higher yields per hectare. This allows farmers to grow more crops on the same amount of land, with benefits for forest protection as well. And while this growing need for transparency is having a positive impact on farming practices globally, it is also allowing customers to experience the real benefits of this otherwise unassuming ingredient.

As a fully integrated company, we can customize high quality and safe palm oil products. To reach to know more.

If you want to learn more about GAR’s products and services, read here.

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