Palm Oil – CJ Billion Sdn Bhd

Palm oil is now the world's leading fruit crop. Derrived from the oil palm , it is grown primarily in tropical climates where it has become the building block of several developing world economies. Although it is produced throughout Asia, Africa, and South America, a whopping 90% of global exports come from just two countries: Malaysia and Indonesia. Once harvested, palm oil is extracted from both the fruit (palm oil) and the seeds (palm kernel oil).

Extracted oils are then used in a broad range of commercial applications including cooking oil, margarine, soaps, shampoos, detergents, lipstick, waxes, polishes, and even as a lubricant in industrial manufacturing.

The use of palm oil as a biofuel is gaining momentum, mainly because it represents a sustainable source of cheap energy. Scientists have developed generators that run exclusively on palm oil, which burns cleaner than coal or petroleum for approximately half the price. However a more widely accepted energy application is the use of crude palm in the creation of biodesel, a fuel source that may hold the potential to reduce greenhouse gas emissions.

Given its cost and yield advantages over soybean and corn, palm oil seems to be an ideal solution for the world's energy problems even though it is difficult to predict where the supply will come from since 93% of the global supply is already in use as food source.

The growing demand for palm oil in Asia can be largely attributed to the improving economic condition of China and other Asian nations. As incomes rise billion of Asian consumers have more disposable income for fried and processed foods - all of which depend on palm oil as a key ingredient.

Since China imports the overwhelming majority of the palm oil it consumes, its geographic proximity to exporters like Malaysia and Indonesia would seem to present a convenient fix for its ever-growing demand. Yet with western food manufactures becoming increasingly dependent on palm oil the issue will likely be decided by the highest bidder.