Kellogg’s announcement that all its palm oil suppliers must source the low-trans-fat oil in a way that is “environmentally appropriate, socially beneficial, and economically viable” is a major win for environmentalists.
Kellogg will be working through its supply chain — from suppliers to processors to growers — to ensure its palm oil can be traced to plantations that are independently verified as legally compliant; adhere to the company’s principles for protecting forests, peat lands, and communities; and compliant with all Roundtable on Sustainable Palm Oil (RSPO) principles and criteria. Suppliers have until the end of 2015 to comply (or be hard at work closing any gaps in compliance).
Environmental advocates such as Greenpeace charge that the drive to meet demand for palm oil is causing a number of environmental ills, starting with the clearing of rain forests and burning off of peat fields in Indonesia. Certainly, as the trade data indicates, Indonesia has moved quickly to take share of US palm oil imports from Malaysia – the leading source for this country market.
Note that worldwide, Indonesia is the top exporter of palm oil. According to US Department of Agriculture figures, Indonesia overtook erstwhile leader Malaysia as a producer of palm oil in 2006.
Kellogg may be a relatively small user of palm oil, but it carries a lot of weight in a US market where growth in imports of the oil has been getting added lift from low prices (see below). As one Greenpeace palm oil campaigner said (to the Christian Science Monitor), “Having Kellogg join is huge. This will impact how palm oil is produced all over the planet.”
