Palm oil is a balanced oil with a unique chemical composition, which provides greater benefits compared to other types of vegetable oils. It’s rich in natural chemical compounds essential for nutrition and health. Palm oil has a huge local market. It’s considered by the institutional users being affordable than coconut oils.
Likewise to the best hybrid corn, palm oil hybrid grows quick and is very strong once planted in the field. Oil palm trees are much greener in weedy fields, wherein coconut trees may look chlorotic because of weed competition.
Further, palm oil isn’t susceptible to damage by moderate floods or drought once developed compared to possible extensive damage to field crops, durian, lansones, and other fruit trees. Compared to coconuts, they are more lucrative as it has higher income and yield.
In the Philippines, the limited information accessible and the insufficient consolidated images of the present state of the palm oil industry and emerging issues of local workers, smallholders, and communities over the past decades have prevented and limited civil society engagement in dealing with critical problems to palm oil.
Identifying the lively civil community and society management resistance to the threats and challenges of palm oil expansion in Indonesia and Malaysia, this article strives to contribute in establishing a comprehensive image of the study of palm oil in the Philippines.
Brief History of the Palm Oil Production in the Philippines
The industry of palm oil in the country traces its beginnings to the 1950s along with a 200-hectare plantation developed by Menzi Agricultural Corporation in Basilan Zamboanga. Unfortunately, the firm stopped operating their plantation when the land was turned over to farm laborers.
During 1980, the NDC (National Development Corporation) in partnership with a British-owned firm Guthrie Corporation established a 4,000 ha oil palm plantation located in Agusan del Sur. This collaboration steered in the construction of the NDC-Guthrie Plantations, Inc.
Later on, NDC ventured into another partnership together with a Malaysian firm known as Kumpulan Guthries Sendiran Berhad. They created a new firm named as NGEI. NGEI then constructed another 4,000 ha of palm oil plantations in adjoining areas comprising the municipalities of Bunawan and Rosario, Agusan del Sur. The firm developed a 40 tons crude palm oil mill.
Currently, the Philippines is a minor producer of palm oil through the Southeast Asian region. However, this is set to alter with the recently declared ambitions of the nation to transform at least 8 million hectares of futile lands within the country into oil palm plantations.
Meaning, this will not just help in reforesting stripped areas but also increase agricultural production throughout the nation. Given that palm oil is extremely perceived as an option to one of the major crops of the country, which is coconut, it has more financial returns in nurturing oil palm in one hectare of land than cultivating coco trees.
The palm industry has the potential to produce significant social and economic development in the Philippines. It offers a means of economic and income development to a wide number of rural poor.
Global Economic Importance of Palm Oil
The sum of global production of palm oil is measured at more than 45 million tons, along with Malaysia and Indonesia as the major producers and exporters in the world. Major importers composed of China, India and the European Union.
The palm oil industry has suffered fast growth in past decades and has become a massive contributor to the international market for vegetable oils. The need for palm oil has further raised in previous years as many developed economies are jumping away from the use trans-fats to much healthier options.
Economic Importance of Palm Oil to the Philippines
Compared to other major producers of palm oil like Indonesia and Malaysia, the country provides little competition because of an insufficient amount of land open for palm oil expansion as well as the serious constraints experienced in financing.
However, due to several environments and social issues like enhanced emissions from the illegal burning of trees, marginalization of indigenous communities and sustained deforestation, it’s essential for palm oil industry leaders to take a careful approach in terms of expanding the palm oil industry in the country.
Currently, the Philipines has eight present palm oil mills along with an overall rated volume of 265 metric tons FFB each hour, and they are owned by 6 firms, naming:
- Univanich Carmen Palm Oil Mill
- Filipinas Palm Oil Plantation, Inc.
- Kenram Industrial and Development, Inc.
- Brown Energy Resources Devt.
- PALM Inc.
- Agumil Phil Inc.
Along with the sum of 265 MT every hour capacity, the nation is capable of generating 1,599, 910 metric tons of palm oil every year. When fully used, this production capacity needs a sum of 86,660 hectares of palm oil plantation.
Palm oil production in the country is specifically geared towards the local market. Based on the industry report, present production of CPO isn’t enough to address national demand. In the past years, KIDI and FFPO have started exporting their CPO to other countries such as Japan because of increased cost on the global market.
Future Prospects for International Palm Oil Demand
Increase returns for a solid global demand for vegetable oils are anticipated to promote investment in the palm oil industry resulting in continued growth over the medium term. The cost competitiveness and health characteristics of palm oil, combined with its potential involvement in renewable energy, it’s expected to contribute to growth in the next decade.
Moreover, growth in the palm oil industry has been added to by the production cost advantages in the cultivation of palm oil. Oils palms are extremely highly productive tree crop compared to crop-based oilseeds. In case you didn’t know yet, oil yields are five to nine times higher than the yields acquired by sunflower, rapeseed, and soybean.
There are lots of cost advantages in palm oil from lower energy inputs and lower land costs. World demands for palm oil are increasing as well and tend to further increase, as different developing economies keep away from the manufactured trans-fat to a healthier option
To sum up, oil palm farming could help bring success to the penurious communities of the Philippines along with rich agricultural resources. Small landholders must be provided and taught with resources to plant and cultivate palm trees similar to what’s done in neighbouring countries in the South. The success of farmers in oil palm farming will bring prosperity to the nation as a whole. Thus, oil palm farming must be cherished to become a major type of crop farming in the southern part of the Philippines.
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