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Free Example of Palm Oil Import Essay

Salunkhe (1992) says that oil palm is considered to be native to tropical Africa.  In his studies Springer, 1992 says that there is also an archeological evidence for the production of oil palm as early as 5000 years ago and even of the trade in that commodity in the civilizations of the upper Sudan (218). On the other hand Ensminger (1995) says that the oil palm is indigenous to tropical Asia and or Africa where I grow wild in great numbers. Ensminger (1995) continues to say that from this area it is believed that palm oil spread to most parts of the world. The oil palm is one of the world’s important sources of edible and soap making oil.

Besides the above, Poku &Food and Agriculture Organization of the United Nations (2002) indicated that “it is generally agreed that oil palm originated from in the tropical rain forest region of West Africa” (p.3). Poku &Food and Agriculture Organization of the United Nations (2002) also said that the main belt runs through the southern latitude of Cameroon, Ghana, Liberia, Sierra Leone, Nigeria, and Togo and into the equatorial region of Angola together with Congo. Poku &Food and Agriculture Organization of the United Nations (2002) further indicated that “during the 14thto 17th centuries some palm fruits were taken to the Americans and from there to the Far East” (p.3).  It was also indicated that the plant appeared to have thrived better in the Far East in countries such as Malaysia hence giving a provision of the largest commercial production of an economic crop far removed from its center of origin (Poku &Food and Agriculture Organization of the United Nations, 2002).

Which Countries Buy Palm Oil?

Leonard, Perkins & Cahn (1999) indicated that with regard to import duty palm oil import policy, import duties are decreasing. They found out that in 1994 the import duty on palm oil was reduced from 28% to 20% in most major importers of palm oil. Leonard, Perkins & Cahn (1999) says that “the import duty was further reduced to 9% for crude oil and to 12% for other palm oil products” (p. 28). In terms of export Leonard, Perkins & Cahn (1999) established that “in 1997 Malaysia exported almost 8.5 % of production while in the same period Indonesia exported 52.5% of its total production” (p. 31).

In the year 1997 the major export destinations for palm oil included Pakistan, which bought 1.168 million tones; India with 1.3 million tones; china which bought 1.78 million tones; the European Union buying 2 million tones and West Asia which bought about 1 million tones (Leonard, Perkins & Cahn, 1999). Leonard, Perkins & Cahn (1999) says that “the countries that have maintained large purchases of palm oil include Japan, South Korea, South Africa, Myanmar and Australia. According to their survey the buyers of palm oil include the European Union, East Asia, South Asia and West Asia” (p. 32).

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Moreover Leonard, Perkins & Cahn (1999) established that “the emerging markets for potential buyers of palm oil in the recent years include Eastern Europe, the former Soviet Union and some parts of Africa” (p. 32). In their studies Leonard, Perkins & Cahn (1999) indicated that Hungary also posted a high percentage of palm oil import compared to Bulgaria of 49.1 percent. Considering that in the recent years the economies of most countries in Eastern Europe have shown encouraging growth signs which could probably translate to high demands of palm oil as well (Leonard, Perkins & Cahn, 1999).  

In the recent years palm oil has gained wider acceptance in the market. Leonard, Perkins & Cahn (1999) maintained that if in the past palm oil was bought more because of its low price; recent years have witnessed stable palm oil demand despite selling at a premium over competing oils for example soya beans. Leonard, Perkins & Cahn (1999) continue to say that “China and India are two markets that promise further increase in the import or buying of palm oil” (p. 33). The reason behind this projection is due to the fact that in both countries they still exhibit per capita consumption of about 12 kg and 10 kg per person per year in China and India respectively (Leonard, Perkins & Cahn, 1999).

Studies also show that Pakistan and Japan are already reporting pr capita consumption above 22kg per year. Leonard, Perkins & Cahn (1999) says that the “import demand in India is fuelled by private sector buying, which now account for more than 85% of India’s import” (p. 33). On the other hand Leonard, Perkins & Cahn (1999) say that though China has the potential to increase its palm oil import a different situation is experienced in the country because it has a lot of regulatory control on import in the forms of quota and import licensing.  

Who Grows It?

From recent research it shows that most of the palm oil supplied to the market now comes from either Malaysia or Indonesia (Leonard, Perkins & Cahn, 1999). Both the two countries in the year 1997 supplied lose to 87% of the international export trade in palm oil. Leonard, Perkins & Cahn (1999) says that “with the growing demand for palm oil around the world demand for palm oil there is concern whether Malaysia and Indonesia can continue to be the supply source”.

Salunkhe (1992) adds that the world production of palm oil totals about 11,044,000 metric tones and the world production of palm kernel oil totals about 3,468, 186 metric tones. In this context Salunkhe (1992) says that the leading palm oil producing countries by rank are Malaysia, Indonesia, Nigeria, Colombia and Thailand.

What It is Used in

Poku &Food and Agriculture Organization of the United Nations (2002) indicated that “palm oil is rich in carotenoids which are pigments found in plants and animals from which it derives its deep color and the major component of its glycerices is the saturated fatty acid palmitic, hence it is a viscous semi-solid even at tropical ambient and a solid fat in temperate climate” (p. 3). They further said that because of its economic value and importance as a high yielding source of edible ad technical oils (Poku &Food and Agriculture Organization of the United Nations, 2002).

There are other additional uses of palm oil. Ensminger (1995) says that palm oil is always reach source of vitamin A, as they contain fro 37,300 to 128,700 mcg of beta-carotene equivalent per 100g. Ensminger (1995) established that “palm oil in the leading producing countries is usually used locally as a food in all kinds of cooker and the export surplus” (p. 794). Further more Ensminger (1995) says that when exported palm oil is used chiefly for soap making and industrial purposes. This is done with suitable treatment and it can also be used in margarine (Ensminger, 1995).  Ensminger (1995) found out that “palm kernel oil which is white or pale yellow is largely used for margarine and also following extraction the oilcake is used as a protein supplement for livestock” (p. 749).

In addition, Salunkhe (1992) says that palm oil is held in the cells of fibrous mesocarp of the fruits and it represents 20-24% of the harvested palm fruit. Salunkhe (1992) thus says that the “mesocarp or pulp of the main fruit has an average oil content of about 56% while on dry basis the mesocarp of the harvested fruit contains 70-75% oil” (p. 225). Salunkhe (1992) adds that palm oil is a rich source of vitamins A and E.   

The Environmental Effects from The Plantations and Loss of Rainforest

Chivian & Bernstein (2008) says that countries such as Malaysia are developing large scale palm oil biodiesel production for export, mainly to the European Union where interest in such bio fuels. Chivian & Bernstein (2008)  in addition indicated that “when establishing plantations for palm oil the effect is that rain forests are cut down and burned to make way for palm oil plantations” (p. 105). This in turn threatens countless species because of deforestation. Chivian & Bernstein (2008) further says that biodiversity is severely eroded as a result of the high levels of chemical inputs herbicides, and fertilizers which are required by these monoculture trees.

The major concern is the deforestation that has for a long period of time been a consequence of new palm oil plantations in Indonesia and Malaysia. Chivian & Bernstein (2008) said that 80% of the palm oil comes from the wiping out the rainforest homes of Orangutans in these countries where 90% have already been destroyed. Chivian & Bernstein (2008) found out that a further problem with palm oil production in both Malaysia and Indonesia and even in the other countries which produce “considerable amount of palm oil is that draining and burning of large areas of peat land is done in order to establish new plantations” (p.105). This results into enormous and carbon emissions into the atmosphere.

In this context, Chivian & Bernstein (2008) mentioned that research shows that “the burning and draining of peat land in Indonesia for palm oil production currently releases more than two billion tons of carbon into the atmosphere each year therefore catapulting Indonesia into the position of the worlds third leading producer of greenhouse gases” (p. 105). Also Chivian & Bernstein (2008)  argue that “deforestation in Malaysia to enable proliferation of palm oil plantations  ma have played a big role in the outbreak of Nipah virus disease in 1998 causing large numbers of fruits bats carrying the disease to search for food outside the forests spreading the virus to pigs and then to humans” (p. 105).     

World Bank & World Bank Group (2009) says that “the mitigation value of biodiesel derived from palm oil questionable” (p. 148). The behind this is that a detailed life-cycle analysis shows that the net reduction in carbon emissions depends on the land cover existing before the palm oil plantation. Therefore, World Bank & World Bank Group (2009) says that “significant emissions reductions derive from plantations developed on previous grasslands and cropland whereas net emissions will increase greatly if peat land forests are cleared for producing palm oil” (p. 148). 

In conclusion, Leonard, Perkins & Cahn indicated that in a period of about three decades palm oil has come from almost nowhere and emerged as the number one traded oil in the export market (1999). Palm oil now challenges soybean oil as the number one oil in world. But Leonard, Perkins & Cahn (1999) indicated that in order for palm oil to maintain the number one lead in the export market around the globe it has to contend the challenges associated with the environment, pollution and deforestation. Leonard, Perkins & Cahn (1999) continue to conclude that there is a need for palm oil producing countries to diversify its market further to the emerging export destinations such as in Africa and Eastern Europe. Above that due to globalization palm oil will have to continue pressing for admission to difficult markets such as Iran where the potential is also big (Leonard, Perkins & Cahn, 1999). It should be noted that unless palm oil stands its ground it may lose its market share because it is no longer realistic for palm oil to capture market niche only on the basis of its competitive prices but there are other important factors which palm oil should overcome.  

Code: Sample20

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