7/21/2005 - Palm oil is now second only to soybean oil in terms of globaldemand, accounting for 28 per cent of total edible oil sales.

In a bid to guarantee supplies, edible oil companies have joined forces tocreate a new organisation, the Roundtable on Sustainable Palm Oil (RSPO),whose principal objective is to promote the growth and use of sustainablepalm oil through co-operation within the supply chain and open dialoguewith stakeholders.

The UK’s Food and Drink Federation, that represents the £69 billion thefood and beverage industry, this week showed support for the draftcriteria set out by the RSPO.

"We actively encourage our member companies to participate in the RSPOprocess. We believe it is an excellent basis on which to work to achievemore sustainable palm oil production," said the UK group.

Palm oil is currently enjoying strong appeal as an ingredient in a widerange of foods: linked to the fact the oil is free of artery-cloggingtrans fats, formed when fats are hydrogenated to make them more solid andextend their shelf life. Because palm oil is semi-solid naturally, it doesnot require hydrogenation.

Mounting evidence suggests the TFAs raise LDL (bad) cholesterol levels,causing the arteries to become more rigid and clogged. An increase in LDLcholesterol levels can lead to heart disease, the number one globalkiller.

As a result, food makers are turning to alternatives to use in theirrecipes, in turn pushing up demand for the commodity.

In addition, the oil also continues to benefit from a growing awareness ofthe health properties of the antioxidant-rich oil.

Although widespread commercial plantings only began in the 1990s, Malaysiais now the world’s largest producer of palm oil, with Indonesia coming upas a close second. Last year Malaysia produced 14 million tons andIndonesia 11 million, on a global total of 30 million tons.

Josh Dadd, an economist at the UK Home Grown Cereals Authority (HGCA),recently told FoodNavigator.com that in previous weeks prices for palm oilhave fallen steadily, due to the sheer volume of vegetable oils on themarket at the moment.

The oil is now trading at around the $370 a ton, mark compared to about$470 (€359) a ton for soy oil.

Food firms are looking to cash in on the growing popularity of palm oil. Anew palm oil plant – the biggest in Europe - is due to open in the Dutchport of Rotterdam in mid 2005, owned and operated by former Unileversubsidiary Loders Croklaan.

Now the property of Malaysian palm plantation owner IOI, Loders said ithoped to process 2,500-3,000 tons of palm a day.