Palm oil is used in nearly everything, from pizza, doughnuts and chocolate, to deodorant, shampoo, toothpaste and lipstick. It is also used in animal feed and as a biofuel, especially in Indonesia and the European Union (EU).
Until recently, the global processed food industry consumed approximately 72 per cent of all palm oil production; the personal care and cleaning products industry consumed 18 per cent; and the biofuel industry consumed the remaining 10 per cent. More recent data, however, suggest that biofuel use, especially in Asia, is now the fastest growing area of demand for palm oil. Nearly a quarter of global palm oil consumption is now for biofuels, despite declining demand in Europe.
Since the spring of 2022, palm prices have been unusually high. Those prices have further escalated with Russia’s invasion of Ukraine. There are fears that the higher price will trigger a rise in deforestation rates.
This briefing 'Palm Oil Production, Consumption and Trade Patterns' provides an analysis of recent palm oil production, consumption and trade patterns and considers whether the sharp increase in palm oil prices could lead to further deforestation.