Jul 19, 2010
Increased Palm Oil Production Being Promoted in Brazil
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
The ever expanding use of palm oil in Brazil has convinced many in the agricultural sector that Brazil is missing out on tremendous opportunity to increase palm oil production within the country. Brazil is currently importing approximately 50% of the palm oil used domestically for food products, soaps, cosmetics, industrial uses, and even biofuel production. Ironically, Brazil is the one large tropical country that has the land area and the climate that would be ideal for palm oil production.
Currently, Brazil has approximately 100,000 hectares of palm oil production and 300,000 to 400,000 hectares would be needed just to satisfy the domestic demand for palm oil. The two largest producers of palm oil are Indonesia and Malaysia and both of those countries have limited expansion potentials due to criticism that native forests are being cleared for additional palm oil production.
To avoid such criticism, the Brazilian government has dictated that new palm oil production would be limited to areas that have already been cleared, notably degraded pasture land in the states of Para, Acre or Bahia. In fact, most of the land that has been deforested in the Amazon Region eventually becomes pasture for cattle ranching and much of the pasture has been poorly formed or maintained. These degraded pastures are subject to high levels of erosion and palm oil production has been touted as one method of renovating these areas. Estimates are that palm oil production in Brazil will expand by four hundred percent in the coming years.
In addition to producing oil for human consumption, palm oil can also be used in the production of biodiesel. Currently, 80% of the vegetable oil used in biodiesel production is soybean oil and the government has been promoting palm oil as a possible alternative to soybean oil. Palm oil is not currently being used for biodiesel production in Brazil because of the high demand for palm oil by food manufactures and industrial users.
The benefits of palm oil are not limited to just oil production. The residue left over from the extraction process can be burned to generate electricity to operate the plant, just like they do with sugarcane. Additionally, the hard exterior endocarp can also be returned to the field as sort of a green manure.