History of International Relations - Palm Oil

EAFIT University

Administration School

International Business Department

History of International Relations

 How the palm oil “BOOM” from the 1960 up helped redefine the global role of palm producing and consuming countries.

Presented to

Joshua John Henry Large

Elaborated by

Raul Hoyos

Esteban Galindo

Andrea Alzate

October 23th

Medellin

2015

INTRODUCTION:

The objective of this paper is to show how the palm business from 1960 to 2015 became a global trigger on social, political, economic, technological and environmental aspects to producers’ countries from the South East Asia region indeed, Indonesia and Malaysia.

Nowadays, Palm oil is one of the most famous oils produced and consumed globally. It has rapidly expanded since 1960 all over the globe, but global production is dominated by Indonesia followed by Malaysia which has 85% of the global exports.  

This oil is mainly utilized in different industries such as food, cosmetic and hygiene. Other usage for this type of oil can be as a source of energy, through biofuels. The principal producers of palm oil are located in the regions of Asia, Africa and South America. Palm oil production has caused a big threat and concern in global population, because it is one of the main causes of deforestation.  

(Palm Oil, 2015)

COMMODITY CHAIN:

Palm Oil is vegetable oil found in the pulp from the fruit which develop in bunches with an average weight of 10 kilograms found in the palm.  Oil palms differ in two main types the Africans and Americans. Those two types of palm varieties are native to the ecosystems of west and South-West Africa and the ecosystems of central and South America. The presence and cultivation of these crops are mainly located in humid tropical regions with suitable rainfall. The planting pattern is done by a specific triangle pattern that will ensure that 1343 oil palms are planted per hectare. Oil Palm can grow over 20 meters tall and reach 3-5 meters long. Palms will reach their first productions 3 to 4 years after been planted. Once the fruit is harvested the next process is the extraction of the palm oil and palm kernel which are extracted at a factory by mill where the process is; sterilized, strip, extract and purified to finally arrive at the well known Crude Palm Oil. From CPO by a second process of refination where oil ends up as the Refined, bleached and deodorized crude palm oil better known as RBD. Both types CPO and RBD can be process by a third time by different process that creates: specialty fats, glycerin and biodiesel. Palm oil can be used in all sectors of economy from applications in; consumer retail, personal care (RBD palm stearin) and cosmetics, biofuel (RDB palm oil), energy, animal feed (palm kernel expeller), pharmaceutics, industrial foodservice (Double olein) and service industry between many more.  The downstream side to the global oil palm industry has been guided by the consumer industry worldwide where 50% of all the products in supermarket shelves contain palm oil as a main and active ingredient.