FROM COCONUT TO PALM OIL - TREND

The situation in the Philippines today is similar to Malaysia and Indonesia a few decades ago. Today in Malaysia and then Indonesia, palm oil plantation is a key driver of the national economy as not only a top export, but the main cooking oil and reported increasingly as part of the national transport fuel mix due to rising biofuels mandates. But not long ago historically the coconut oil was central. From the 1970s up to the 1980s, most of the people in Malaysia and Indonesia were consuming coconut oil as cooking oil as claimed by Amrizal Idroes as the  founder of the Indonesian Association for Coconut Product Manufacturers (IACPM) and who has been working in the coconut industry for nearly three decades. Coconut oil has long been used across South and Southeast Asia as a cooking oil. The coconut tree (Cocos nucifera) are grown in both the Philippine and Indonesian archipelagos for centuries in which it produced not only oil, but also milk, water, sugar and a variety of other products, consumed almost entirely locally. Moreover most farmers as they grew alongside other tropical crops like bananas, cassava, coffee and cacao, part of a mixed-use landscape. Blog 'Anim Agriculture Technology' share a short view on how the chance from coconut to oil palm take place in South East Asia Region.

That started to change when the African oil palm (Elaeis guineensis), which was brought by British and Dutch colonialists and began to expand in the 1970s in Malaysia and Indonesia. Within decades the palm oil went from niche product to top Malaysian and later the Indonesian export in which later quickly overtaking coconut. It was desirable for several reasons such as its industrial efficiency, massive yields, flavorless profile, and ease of transport and processing. It is now the most-consumed food oil in the world. Malaysia became the largest oil palm producers in the world for many decades before taken over by Indonesia recently. In other case the coconut oil is less competitive compared to the cooking oil from palm. Later the government began promoting palm oil and most fsrmers began choosing it as the cheaper oil. This process may be repeating itself in the Philippines where in southern region (Mindanao) since 2010, the palm oil imported from Indonesia or Malaysia has overtaken coconut oil as the top-selling oil in most grocery stories as according to data from the United Coconut Association of the Philippines. Like in Indonesia the main reason is its low price  often half that of coconut oil.

Unlike coconut in which is dominated by smallholders however about 60% of oil palm is grown on large-scale plantations by companies like KLK, Sime Darby, Golden Agri-Resources and Wilmar International. These huge, typically monoculture, industrial oil palm estates have replaced rainforests across Southeast Asia with massive processing and transportation infrastructure built by companies and governments to support the industry. Palm is a very industrialized crop and it wasa a kind of belief that oil palm is much more profitable than coconuts. Coconut plantations were even taken down in favor of oil palm.  Area such as at Riau, an Indonesian province on the island of Sumatra is one of the country’s top producers of palm oil in Indonesia. But in the 1970s reported it was at the center of coconut production on the island. Gradually much of what was formerly coconut land was converted to oil palm. Actually most farmers are realistic in which when they look at their neighbor then they see palm oil is better and so they change the crop. This is what happened in Riau as the nearest neighbour to Malaysia. 

The same is happening today in the southern Philippine island of Mindanao where the government is promoting the activity  on expansion of the palm oil industry including two new palm oil mills and several plantations.  The hope in the growing desire for high-value coconut products in North America and Europe as the demand has risen for virgin coconut oil, organic coconut water and coconut cream due to health and issue of sustainability concerns. This has led to some small-scale ventures to promote sustainable farming of coconuts. Nowadays many have seen customer demand for a sustainable, certified coconut oil supply chain. They want to make sure the traceability of the product they buy comes from farms that are not harming the environment. One of the challenges facing by a company known as Cargill was that it was unable to source sustainable certified coconut even as demand for it was rising. A deeper look into the supply chain found a similar situation to what the limited capacity, low prices, and lack of infrastructure needed to produce high-value coconut products. Coconut was being grown by neglect as by said Ivan Idrovo as a Philippines-based agriculture consultant. Farmers were not taking care of the trees but they were still harvesting and never applying fertilizer. They know the basic management coconut tree and how to gather the coconuts but everything else was wrongly done. Instead of funding small-scale coconut farmers the coconut agency  Philippine's  Coconut Authority (PCA) opts to fund agribusinesses in the palm oil industry, specifically in Mindanao. The reason is that the government sees palm oil as more lucrative than coconuts.  Thanks...

By,

M Anim,

Senior Agronomist,

Putrajaya,

Malaysia.

(December 2020).