ABSTRACTDemand for vegetables oils

ABSTRACT
Demand for vegetables oils has been growing strongly since the last decade due to increased in global population and oils consumption. Palm oil is one of the most important vegetable oils in the world and each year million tonnes of palm oil has been traded globally to be consumed by million people around the world. The palm oil industry in Malaysia particularly is evolved dramatically since the last three decades and hence produced varieties of products such as crude palm oil, palm kernel oil, palm kernel cake, oleo-chemical as well as new bio-fuel products to fulfil the demand from food and non-food industry in the world. However, the rapid development in this industry creates many questions on the issues of sustainable development of palm oil. Palm oil industry in the Southeast Asia region suffered various criticisms and negative reports from the international non-government organizations on the issue of sustainability. As one of the main producer of palm oil, Malaysia is also being accused for conducting unsustainable practices in developing this industry although the industry’s history spans across for more than 100 years. Malaysia was the main producer and exporters of palm oil since 1960 before it has been surpassed by Indonesia due to limitation of land for further expansion.
This study was conducted to investigate into Malaysian experience in developing this industry with regard to sustainable development as well as identify its policies and initiatives towards preservation of the environment. Any policies and initiatives implemented by this industry will be categorized based on economy, environment and social perspectives in order to identify whether the palm oil industry in Malaysia is conducted within the framework of sustainable development. This
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study applied qualitative approach in completing the research by using case study and literature reviews methodology. Case study is an appropriate method used to narrow down a very broad field of research into one easily research-able topic. In order to save time and money, this study only focused on one of the palm oil producing country to investigate the whole structure of this industry and relates it with the issue of sustainable development and for this purpose, this study selected Malaysia.
According to the findings of this paper, Malaysian’s government has included various policy efforts in an attempt to conduct the industry within the framework of sustainable development. This industry has been regulated by at least 17 major regulatory frameworks to cover all kinds of environment aspects including land, environment, and pesticide as well as wildlife protection. These regulations have been imposed since 1960s with collaboration from various government agencies. In term of economic perspective, the National Biofuel Policy is launched to enhance the contribution of palm oil to economy and at the same time to create renewable energy that is safe and consume less energy. In term of social perspective, palm oil is the development tool in eradication poverty program launched since 1960. As a result, Malaysia is successful to reduce the incidence of poverty rate among poor. However, this study reflects some recommendations that need to be addressed by the government for future direction of palm oil industry. This study suggested that Malaysia should focus more on developing the downstream sector that is yet to be captured based on vast opportunity on new existing global market. Since Malaysia is one of the main palm oil producing countries in the world, it is a time to establish new independent accreditation organization with other producing countries, to support the industry from various issues pertaining sustainability.
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It is anticipated the finding of this study will positively influence both parties including international NGOs as well as industry players and government to be mutually understanding about each responsibility in ensuring the sustainable development of this industry. At the same, the information regarding Malaysian’s experience in developing this industry can be used as important tool to guide other newly producing countries in this industry. The list of recommendations proposed at the end of this study is expected to contribute towards strengthening the position of palm oil to Malaysian economy and source of main important supply of vegetable oil at the global market.