India is the world’s largest importer of palm oil, more than two-thirds of which comes from Indonesia. Palm oil is primarily used in products such as edible oil, haircare and beauty products. The FMCG sector in India accounts for around 20% of the global palm oil consumption, sourced mainly from Indonesian forests, causing large-scale deforestation and biodiversity loss.
Most products an average Indian consumer consumes on a daily basis, from food products that use edible vegetable oil (pickle, ice cream, pizza, potato chips, etc.) to products such as toothpaste, shampoo, body lotion, facewash, shower gel, etc., have palm oil as an ingredient. To avoid scrutiny, the labelling mentions palm oil as edible oil, or sodium lauryl sulphate/sodium laureth sulfate/sodium palmate/sodium palm kernelate/palmitic acid, and so on. However, the wrap doesn’t mention that they are sourced from Indonesian forests, and this forest depletion leads to a loss of habitat for thousands of orangutans every year who are clubbed to death by Indonesian palm oil workers.
While there are certifications for sustainable palm oil production, there is minimalistic interest in India to move towards sustainable palm oil production, thus very little pressure from the domestic market towards its Indonesian suppliers.
Consumer outcry was a major factor in the US and the European Union in the shift from palm oil-led deforestation, and similar pressure is unlikely to come from the Indian market, which is more concerned with domestic environmental issues such as coal mining and sustainable agricultural practices. A major reason for this is the cost dynamics, as sustainable palm oil products are costlier, and in a country where 21% of the population is below the poverty line, even a small increase in price reduces demand to a large extent, thus giving little incentive to the market for a shift towards sustainable palm oil products.
While companies such as Kamani Oil Industries and Galaxy Surfactants have achieved the RSPO certification (roundtable on sustainable palm oil certification), there is still a need for a shift in consumer choice and awareness building for using products with sustainable palm oil sources. In 2016, palm oil imports grew by 14.48%, amounting to almost 10 million tonne.
Now we know the pros and cons of using palm oil, where it comes from and what all are at stake. We can either turn a blind eye and contribute to the destruction of a habitat, or take a sustainable path.
BW Reporters
The author is correspondent at BW Businessworld, he has a keen interest in sustainability and environmental economics
