Alt-Coin Trader

How the Palm Oil Trade Causes a Food Chain of Destruction

Food giant Archer Daniels Midland's forays into new global agricultural markets bring charges of forced child labor and rampant deforestation.

ADM used to be known as the country’s corporate welfare king, and its top executives drew headlines as they perp-walked to prison. That was then, when the company ran elaborate price-fixing schemes in the lysine and other global commodity markets. This is now: For the second year in a row, ADM topped Fortune magazine’s list of most admired food production companies.

But underneath its improved public image, ADM’s major forays into new markets, including cocoa and palm oil, are raising concerns. This time they center on the impacts of the global food conglomerate’s supply chain, and on charges of complicity in forced child labor and massive deforestation.

About 40 million tons of palm oil worth $20 billion is produced each year – 85 percent of it by Indonesia and Malaysia, where giant oil palm plantations account for the highest rates of deforestation in the world. As of 2009, more than seven million hectares of palm oil plantations had been planted where forests super-rich in diversity once stood. Within a couple of decades, the deforestation is projected to triple to more than 20 million hectares.

While most palm oil is processed for cooking oil, biofuels and other uses in China and Southeast Asia, U.S. consumption has tripled in the past five years, making North America the fastest-growing market. Most palm oil exported to the United States – one million tons in 2008/2009 – is extracted from the hard kernel at the center of the fruit, and processed into a variety of ingredients for food products, including vitamins.

U.S. consumers might be shocked to learn that an estimated 10 percent of common grocery goods – including chips and crackers, ice cream, margarine, instant noodles, chocolate, cereals, canned vegetables, soaps, shampoos, cosmetics and detergents – already contain some kind of palm oil ingredient. They might be doubly shocked to learn that palm oil is implicated in the same health problems that are driving trans fats out of the market. Merely replacing trans fatty acids with other artery-clogging saturated vegetable fats not only does little to bring down the incidence of heart attacks and strokes (still the top killers in America for public health), but it is also fueling deforestation and social injustice halfway across the planet.

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