According to Chain Reaction Research, a sustainability risk analysis group, in 2021 a total of 19,000 hectares of forest land was cleared for industrial oil palm plantation development in Malaysia, Indonesia and Papua New Guinea – the world’s eighth largest producer country – far lower than the 90,000 hectares and 38,000 hectares recorded in 2019 and 2020 respectively.
Global palm oil prices have soared in recent months, with other vegetable oils including sunflower and soy on similar trajectories, driving the UN Food and Agriculture Organization’s vegetable oil price index to a record high in February – a peak that has continued to rise.
A perfect storm of issues had already contributed to this skyward surge. The Covid-19 pandemic has brought various difficulties in logistics, and government mandates on using palm oil in alternative fuel blends have meant more demand. There have also been supply shortfalls, aggravated by droughts in Latin America, and labour shortages and floods in Malaysia.