The Murky Backstory to India's Palm Oil Consumption
Palm oil is in the news again, as it often is. While the oil itself is not the problem, there is a strong case for replacing it in Indian kitchens. Amrita Amesur writes about how India — with no local history of consumption or indigenous growth of oil palms — became the world’s largest consumers and importers of palm oil.
Take a walk through any neighbourhood in India, and you’ll find bhajis, jalebis, vadas, or their local equivalent, being fried in a massive kadai. The liquid bubbling in the kadai is usually dark and murky, and it is probably best not to ask for too much information; just pick up your vada pao and be on your way. Ignorance in this case, was certainly bliss. Because once that veil is lifted, the truth is unavoidable. I only ever knew palmolein tel as the oil my father used to light the ever-burning akhand jyot in our house. Turns out, it is in fact the most commonly consumed and cheaply available edible oil in India. It is also the primary ingredient of vanaspathi, a form of hydrogenated vegetable fat, used as an inexpensive substitute for ghee. For two decades now, this oil has been hiding in plain sight — in our homes and in our diets.
From being a self-sufficient, indigenous-oil producing nation in the early 1990s, after the Yellow Revolution, with more than a billion consumers, India has now become the largest importer of palm oil in the world. As per data from the United States Department of Agriculture (USDA), India has been consistently importing an average of 15 million metric tonnes of vegetable oil a year, from 2015 to 2019, and palm oil accounts for two-thirds of these imports. As much as 70% of India’s domestic demand for edible oil is met through imports.
Historically, almost all vegetable oil consumed in India up until the early 1970s, was peanut oil (53% consumption in 1972-75), rapeseed oil (25%), and cottonseed oil (9%). Palm, soybean, and sunflower oil together accounted for less than 4% of the total. More recently, though, palm and soybean oils have become the leading edible oils in India, in part due to easy and cheap access to imports.
Before you dismiss it as the poor man’s problem, think back to the last time you picked up a tub of ice cream, or a box of doughnuts. Yes, it’s in everything. It’s in your toothpaste; it’s in your soap as lathering agent — a plant-based replacement for animal tallow; it’s in biscuits, and baked goods (even the imported variety, under the name ‘vegetable shortening’ — replacing those old demons, butter and margarine). It’s in your bag of chips and nachos — anything that claims to be zero trans-fat inevitably has palm oil. That silken bar of chocolate and yes, Nutella. It is what lends smoothness to your lipstick, and layers to khasta kachori. It’s in that packet of bhel you bought at the supermarket, so you could avoid the questionable roadside variety. Think McDonalds, Dominoes, KFC, Subway, Pizza Hut. Think wedding food.
A list of some of the many alternate names for palm oil
Source: Orangutan Foundation International
It is the most versatile and cheaply available vegetable oil in the world, produced from the fruit of the oil palm trees of African origin, commonly found in the tropics. Malaysia and Indonesia are the epicentre of this industry. Palm oil quickly climbed the ladder to the status of cash crop in the mid-to-late 1990s, as companies like Unilever replaced butter, and then margarine, with palm oil, to combat what was termed ‘trans-fat’ — considered very harmful for consumption. Most trans-fat is artificially created through hydrogenation, and partially hydrogenated oil, which was used in many processed baked goods and snacks. Newer formulations and methods for production of vegetable shortening, using palm oil were adopted by some food corporations to produce trans-fat free alternatives to shortening. Whilst palm oil is free of trans-fat, it does contain 50% saturated fat (linked to the risk factors for heart diseases), which is significantly higher than most other vegetable oils. Since palm oil was the solution to replace these trans-fat heavy oils, it was meant to be simply a lesser evil, to tame cholesterol, but certainly no health food.
Palmolive built a range of personal care products with their namesake, forsaking the more controversial marketing nightmare — animal fat and tallow. The swiftly growing fast-food industry welcomed this cheap, easily available, flavourless oil to expand their presence in developing countries. We see now that it is these fast growing, heavily populated, developing countries — India, China and Pakistan, that consume the largest amounts of the world’s production of palm oil.
To feed this new wave of commercial thirst, more tropical rainforests were cut and burned to make room for plantations; more and more land allocated and cleared to cultivate and mass-supply this global demand. The more land that is cleared away, the less there is for the wildlife population. The ecosystem around these forests collapsed at staggering speed; animals in turn lost their habitat. With shrinking habitats, the once abundant animal kingdoms of Indonesia and Malaysia, are now endangered species threatened by unsustainable palm oil production. As reported by WWF, amongst such species are the orangutan, the Sumatran elephant, rhino and tiger — critically endangered due to loss of more than half their forest cover in 40 years, mainly due to conversion of land for palm oil and pulp plantations. Orangutans are killed on the plantations as agricultural pests, leaving their young orphaned. It is estimated that up to 300 football fields of forest land globally, are cleared every hour, to make room for palm plantations. The establishment of palm oil plantations has been a disaster not only for endangered wildlife, but has also exacerbated conflict with local communities in Indonesia over traditional land rights. Local people have been evicted from their customary land holdings and local communities impoverished, leading to much conflict with palm oil concession companies.
Indonesian palm oil plantations
Deforestation, which is the second largest manmade source of atmospheric carbon dioxide, after fossil fuel burning, in turn exacerbates the effects of climate change. According to NASA, since rain forests are the largest carbon sinks, when destroyed, they release massive amounts of carbon dioxide into the atmosphere.
As climate change accelerates, indigenous peoples and minors are exploited for cheap labour. Children as young as eight, are working at plantations that supply palm oil to some of the world's biggest brands, according to a report by Amnesty International, doing "hazardous, hard physical work." "In order to meet their targets, earn bonuses and avoid penalties, workers on all the plantations... investigated said that they get help from their spouses, children or others to complete certain tasks," stated the report.
The governments and corporate plantations in turn accumulate wealth through the trade of palm oil — claiming this wealth can help lift their countries out of agrarian poverty. The plantation sector in Malaysia is, after all, one of the country’s largest employers, providing income and employment for many rural people.
This magic oil crop is evergreen and grows perennially, ensuring production all year round. It thrives in all manner of soil, requires very low maintenance, has a lower production cost, and produces more oil from less land, compared to other crops. In comparison to soybean, the second most consumed oil in the world, it requires only one-tenth as much land, one-seventh as much fertiliser, one-fourteenth as much pesticide and one-sixth of the energy to produce the same quantity of oil. Simply put, it is very, very cheap. In addition, palm oil is highly resistant to oxidation, making it suitable for frying and giving it a long shelf life. As a result, 3 billion people in 150 countries today use products containing palm oil, and the consumption of palm oil has doubled in the past 15 years. Globally, we each consume an average of 8 kilograms of palm oil a year. Its winning quality lies where no others can compete: it has the highest yield per acre of any oilseed crop — almost five times as much oil per acre as rapeseed, almost six times as much as sunflower and more than eight times as much as soybeans. Between 1995 and 2015, annual production quadrupled, from 15.2m tonnes to 62.6m tonnes, worldwide. Experts state that, the boycott of palm oil will only lead to its replacement by another crops, one that needs far more farmland, resources, and likely more deforestation. None of its competitors can boast of anything close to this yield per unit — palm accounts for 6.6% of cultivated land for oils and fats, while delivering 38.7% of the output, according to the European Palm Oil Alliance, an industry group. “The cost of production is far less than any comparable vegetable or animal fat,” said Sundram, of the Malaysian Palm Oil Council. “Industry is simply palming off the benefits to the consumer.” No other oilseed could compare, in quantum availability or price. Palm oil plantations account for an astounding 10% of permanent global cropland. It’s even used as cheap bio fuel in Europe, to power cars and trucks. Ironically, the use of palm oil was supposed to help save the earth from environmental degradation and global warming, to reduce carbon dioxide emissions by way of using biofuels instead of fossil fuels. This has turned cruelly counter-productive, as further deforestation happens to meet these very same bio-fuel requirements.
But why exactly is India the hotbed of palm oil consumption? It doesn’t grow here, it has no indigenous ties to this land, no history of consumption by any of its communities. How did we then become the world’s largest consumers and importers of palm oil?
An oil that carries with it the burden of environmental devastation, acceleration of climate change and a slew of human rights and labour abuses is what feeds the majority of the Indian sub-continent. Then there are the adverse health effects of a foreign-grown, machine processed refined oil, very high in saturated fats, consumed in large quantities by people not culturally or geographically suited to it.
The story of the domination of palm oil in India starts somewhere in the 1990s, between an incident of mass poisoning through a batch mustard oil adulterated with argemone oil, in Delhi in 1998 and the rapid resulting shift in foreign trade policy that followed. This policy favoured the use of imported refined oils by placing bans on indigenous Indian edible oils produced in artisanal cold-press mills — the ghani — under food safety laws. The situation was exacerbated with declining domestic oilseed production fuelled by an unorganised oil processing sector. The trade policy reforms in the mid-1990s, coupled with the crumbling domestic industry, were instrumental in the rapid ascendance of imports from 0.3 million metric tonnes in 1988/89-1993/94 to 5.2 metric tonnes in 1998-02.
But this windfall of refined palm oil, was at a standstill in India for several of the recent months. In September 2019, former Malaysian Prime Minister, Mahathir Mohamad’s comments in the United Nations General Assembly on the abrogation of Article 370 in Jammu & Kashmir, stating that the government of India “invaded and occupied the country” despite the UN resolution on Jammu & Kashmir, had reportedly caused a furore in Delhi. So much so, it led to a knee-jerk reaction in Indian policy, inviting almost immediate retaliatory warnings to the oil industry to abstain from trades with Malaysia. To formalize its grouse, the Government of India, on January 8, 2020 issued a notification to regulate and restrict excessive import of refined palm oil in India, placing it in the “restricted” category, requiring any importers to seek a license from the government before doing so. This was a surgical hit at Malaysia, since India imports almost all its RBD (refined, bleached, deodorized) palm oil from Malaysia which until this notification, fell within the “free” category of the Import Policy. It has been reported though that India has resumed purchase of Malaysian palm oil in May 2020, after the hiatus of four months, in light of a vastly advantageous trade deal cut by the Indian government with the newly installed government of Malaysia.
Had this policy decision sustained; it would’ve had India in a quagmire. Our country, it seems, has reached a point of no return – its citizens now accustomed to easy access to cheap refined palmolein, feel no need to go back. With a dominant population of low-income groups, micro, small and medium food businesses, and the average family spending half of their earnings on food, the differences in prices of staples like vegetable oil have an enormous effect on their purchasing choices. Not to mention, the purchasing choices of profit-centric fast-food corporations. “Can you tell the Indian vegetable oil consumer who’s buying only in the cheap shops, that it’s bad for the environment of south-east Asia?” asks MS Sriganesh, head of sourcing at Galaxy Surfactants Ltd, one of the first Indian refineries to be RSPO certified. “They won’t know what that means.”
Concerns raised by environmentalists in the early 2000s, led the World Wildlife Federation to convince a small number of palm growers, manufacturers and retailers to establish the Roundtable on Sustainable Palm Oil (RSPO) in 2004. It was meant to be a step towards sustainable production of palm oil and several global food conglomerates pledged to switch to RSPO certified palm oil in the next few years. However, the RSPO and its guidelines were found to be “woefully substandard” and “in some cases … colluding … to disguise violations”, by the Environmental Investigation Agency, an offshoot of Greenpeace.
The reason refined oil has taken over the Indian market is because it is mass manufactured and is hence cheaper than kachi ghani cold pressed domestic oils. It has been bleached clean of the original taste, colour, taste and smell (and nutrition) of the oilseed — of which domestic consumers have become wary and suspicious in the last few decades, perceiving it as dirty or unrefined — especially in light of the ban placed on the sale of loose unpackaged edible oil, through the Food Safety and Standards Act, 2006 (FSSA). But this is exactly where the olive oil manufacturers of Europe have prevailed. They’ve managed to tap into, and dominate, the cold-pressed oil industry, with the endless benefits of olive oil being hailed from the Americas to Asia, as it is packaged and sold in its raw, cold pressed juice form, crushed glamorously in a European-style ghani, no less. Whilst the popularity of cold-pressed olive oil from Europe reaches grand proportions, especially among the Indian middle class, most remain blind to same concept at the local ghani, using with indigenous oilseeds. Which is ironic, given its health and ecological benefits. The difference simply lies in the superior marketing strategy adopted by manufacturers of European olive oil and perhaps, sadly, in the pride in their own ancient methods and local produce. Whilst this polarity of luxuriously expensive olive oil and supremely cheap palm oil may be divided through economic classes in India, the underlying factor remains common — suspicion and lack of faith in domestic oils. The ones who have looked past the suspicion, are bogged down by the cost of domestic cold pressed oils, which end up being double or triple the cost of imported palmolein, or even other refined vegetable oils. As popular perception goes, spending habits indicate that paying a premium for European olive oil is acceptable, but the same does not apply to locally sourced and extracted peanut, mustard, sesame or coconut oil.
In her Budget speech in 2019, the Finance Minister Nirmala Sitharaman had called for attaining self-reliance in oilseeds production within the next 10 years. The Commerce and Industry Ministry asked the Agriculture Ministry to prepare a plan for achieving self-sufficiency in edible oils. India’s edible oil import bill currently exceeds ₹60,000 crore per year. However, Budget 2020 turned out to be a sore disappointment for the Solvent Extractors Association (SEA) – the apex oil trade body of India. "The Industry was expecting the Finance Minister will come out with a package of incentives in the Budget for higher production and productivity of oil seeds, to reduce our dependence on import of edible oils," said BV Mehta, executive director, SEA.
To help steer the country towards self-sustenance and frankly, good health, the government must lift the regulatory burdens under, the FSSA, placed on the dying breed of local ghanis along with the fledgling oil-pressing communities, if the government is in fact, serious about cutting down imports and becoming self-sufficient again. Not only through the lifting of regulations, but domestic oilseed production needs the strength and muscle of active support by the government and the private sector– in terms of infrastructure, investment, research and promotion to scale up even a marginally profitable production of domestic oils through effective use of indigenous technologies. In the opinion of Sthanu R. Nair, Associate Professor of Economics, IIM Kozhikode, since India is the second largest producer of rice in the world, India has tremendous potential to substitute its requirement for edible oil through the production of rice bran oil.
Farmers’ associations have stated over the years, through Sarson Satyagraha and others, that they are confident of achieving necessary yield with adequate support from the government. Yet, for several years the demand for vegetable oil would still remain unmet, without the constant inflow of imported edible oils. Moreover, due to the far lower yield of alternative crops, it may be counterproductive to replace palm oil at all. Only a larger scale of domestic production will ensure affordable availability of vegetable oil in the country. “The support that ghanis need from the government is recognition: that this is highly skilled work, and this is the purest oil that you can get,” said Vandana Shiva, a grassroots environmental activist. Moreover, a mental makeover may be needed, to convince consumers to make this shift back to traditional oils. Taking a leaf out of the book of olive oil manufacturers and their marketing methods, may not be a bad idea.
Amrita Amesur is a corporate lawyer by profession and is deeply passionate about food. She has spent the last few months dedicatedly scribing, studying and documenting all of her family’s food experiences while learning to develop her own voice as a cook and a writer. You can follow her adventures on Instagram.
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