Palm oil and palm kernel oil are consumed as food and used in industrial applications ranging from soap and cosmetics to biofuels. Millions of people around the world depend on palm oil for their livelihoods, and for hundreds of millions more it makes up a core part of their diets. Its texture, long shelf life and performance at high temperatures make palm oil a desired cooking oil and an alternative for margarine, shortening, ghee, frying fat and cocoa butter. Palm kernel oil is used as an ingredient in confectionary and coating fats.
Strong demand for palm oil worldwide has resulted in expansion of smallholder farms and plantations, raising environmental and social concerns, including forest and habitat loss, peat land conversion, pollution and greenhouse gas emissions, and the rights of indigenous communities. Unsustainable practices by some suppliers have resulted in deforestation and negative impacts on biodiversity; cultivation of land without consideration for the rights of indigenous communities; and poor working conditions and violation of workers’ rights. Cooperative efforts to address these issues and move the industry toward greater sustainability are underway involving major palm oil producers, processors, traders, non-governmental organizations (NGOs), workers, smallholders, local communities and government agencies.