Palm Oil in Processed Foods

Palm oil is a widely used ingredient found in a vast array of processed food and consumer products. Its presence in everyday items like chocolates, biscuits, cakes, soaps, shampoos, and cleaning products underscores its significance in the Fast Moving Consumer Goods (FMCG) sector. 

Did you know that in products like instant noodles, palm oil can comprise up to 20% of the total weight according to this NDTV Profit article.

Palm oil constitutes a significant portion of the raw material costs for many FMCG companies. 

For giants like Hindustan Unilever Ltd. (HUL), this essential ingredient can make up 15-20% of their total raw material expenses, while it is even higher for Britannia and Nestle.

HUL obtains its supply from its subsidiary, Unilever Oleochemical Indonesia. 

The recent 12% surge in palm oil prices, representing a 46% year-on-year increase, has put a strain on these companies, squeezing their profit margins. 

To mitigate the impact of rising prices, companies with significant palm oil dependence are implementing incremental price increases across their product portfolios to balance cost management with consumer affordability.

More shocking facts from this Food Pharmer video -

• India is the largest importer of Palm oil. 
• India heavily relies on palm oil imports to meet its domestic demand
• Palm oil and its derivatives, such as palmolein oil and refined palm oil (click on the links to see products), are commonly used in various food products. 

According to a Times Evoke article, Palm plantations are 10% of Earth’s permanent cropland — each person consumes an average of 8 kgs palm oil a year. India, China and Indonesia use 40% of all palm oil. 

Given how palm oil is in both pizza and paint, its presence is phantomlike — undiscernible, yet pivotal. The plant is an extremely efficient producer of fats and has both unsaturated liquid components and saturated fats, which makes it applicable across industries.

"Palm oil is often invisible in the products we consume," says Jonathan E. Robins, Associate Professor of History at Michigan Tech University. He adds that its color and flavor are intentionally removed, so consumers rarely see or taste it. 

Raw, unrefined palm oil has a striking red or orange colour — when fresh, it also has a very interesting scent. This combination made palm oil an attractive ingredient for early soap manufacturers.

All fats contain called glycerine — for years, this had been discarded as a waste product but then, chemists discovered it could be used to make, among other things, explosives. Nitroglycerin was the first major explosive based on this.

A series of other applications derive from this use of palm oil — napalm was initially developed using palmitic acids drawn from it, a thickened sort of gasoline product that burns. Later manufacturing shifted to other materials — yet, palm oil was important enough to give this weapon its name ‘napalm’.

Chemistry — and its intertwined equation with economics — is the driving force behind this domination. Compared to other plant-based oils, palm oil is perennial, less demanding of soil and most productive, generating six times more per acre than sunflower and eight times more than soybeans. 

Palm oil was an important motivation for European empires to seize territory. With a history of slavery, colonialism and indentured labour, it has always been a cheap material while its combination of fat and consistency lend themselves to multiple products. Being a labour-intensive crop, the palm oil industry provided a lot of employment while creating a material useful for food and other products.

The combination of deforestation caused by palm plantations and water pollution has severe negative effects on the environment. Sumatra's razed half its forests in the last 40 years for pulp and palm. Found across Borneo and Sumatra, orangutans are now critically endangered, their homes destroyed for palm oil, leaving them in dangerous terrestrial  surroundings, many killed when their forests are razed. There are also just 400 Sumatran tigers left.