Expansion of palm oil producers into Latin America, the "new
frontier for global expansion" is snagging on confusion over land rights – which
is encouraging some groups to expand into rainforest.
"Several" palm oil groups with experience of operating in
Indonesia and Malaysia, the top two palm producing countries, have "already
begun acquiring potential palm oil land in Peru for possible expansion", a US Department
of Agriculture report said.
"The Peruvian Amazon appears to be an ideal investment" for
these companies, given the constraints on land in South East Asia, and the
requirement for oil palms to grow in equatorial areas.
"With the leading palm oil producers in Malaysia and
Indonesia having very little remaining land for further expansion, the Amazon
basin is considered the new frontier for global palm-area expansion," the USDA
However, hopes for ramping up output in the region have not
been matched by outcomes, with Brazil's output expected for 2016-17 to come in
flat at 340,000 tonnes for a fifth successive year, and that in Peru forecast
at 51,000 tonnes, "less than 1% of estimate global output".
The lack of progress comes despite moves by both Brazilian
and Peruvian authorities to open up previously-cleared forest as oil palm plantation,
and promote "sustainable" production of the vegetable oil, which is used in
products from soap to biscuits, as well as in making biodiesel.
"Unfortunately, already-cleared and non-forested lands present
their own problems," the USDA said.
World's top palm oil producers, 2015-16, according to USDA
1: Indonesia, 32.0m tonnes
2: Malaysia, 18.25m tonnes
3: Thailand, 2.1m tonnes
4: Colombia, 1.273m tonnes
5: Nigeria, 970,000 tonnes
12: Brazil, 340,000 tonnes
23: Peru, 47,000 tonnes
"Some of these lands are already inhabited, with contested
or multiple-person land tenure."
In Peru, while the non-rainforest land available for farming
is estimated at more than 1m hectares, much of it has yet to be officially
classified as suitable – "a difficult and complicated process".
"Decisions on land use are currently fragmented across
national and regional authorities, giving rise to contradictory rulings."
The impasse has limited to 38,000 hectares the estimated area
of Peruvian land planted to oil palms, despite a government plan unveiled in
2003 to promote the vegetable oil, and other feedstocks for biofuel plants.
And of what has been seeded, some has come from rainforest, as
companies seek to exploit government incentives, and despite Peru operating a "zero-deforestation"
"Political support and economic incentives for palm oil
production, both for food and fuel, create an increasing threat to forest
conservation," the report said.
The briefing follows cautions earlier this year from
environmental campaigners warning over the exploitation of virgin rainforest in
Peru by palm oil groups.
The Roundtable on Sustainable Palm Oil, which promotes
ethical methods of palm oil production, in April ordered Plantaciones Pucallpa,
a member company which operates in Peru, to stop developing new plantations
until it can prove it has not cleared any primary forest.
However, one of the most high profile disputes over a
plantation group is actually in the cocoa sector, where Serfor, the official
Peruvian wildlife and forestry service, has claimed that London-listed
plantations group United Cacao does not have the required environmental
United Cacao - which owns nearly 4,000 hectares of land and
has applied for a further 12,000 through a government privatisation programme -
has denied the claim, and said it "operates in full compliance with all
applicable Peruvian and environmental laws".
The group, founded by palm oil entrepreneur Dennis Melka, earlier
this month appointed as a director Graeme Iain Brown, another executive with a
background in palm output.
Mr Brown said on his appointment: "Peru offers excellent
conditions, in particular freehold land, for plantation companies and a superb
"I expect the general plantation industry, largely based in
South East Asia, to take increased interest in this region in the years ahead."