Major trade flows of palm oil by WWF (2011)

Major trade flows of palm oil by WWF (2011)

Commodity brokers buys or sells contracts, such as financial derivatives, options or futures, on behalf of clients and charges them a commission; commodity traders act for their own accounts. Both stakeholders play an influential role in the palm oil supply chain, maintaining price stability or volatility in the vegetable oil markets, balancing supply and demand as well as controlling the movement of palm oil and its derivatives internationally.
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Balung Tawau Sabah Apas Balung Mill © CEphoto, Uwe Aranas

Balung Tawau Sabah Apas Balung Mill © CEphoto, Uwe Aranas

Transporters move raw materials and finished goods from one point in the chain to another. At present most palm oil travels long distances before it is consumed, adding to the negative environmental impacts of palm oil production. Efficient transportation is essential for palm oil as it quickly deteriorates in quality after the crop has been harvested and milled.
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World map showing biodiversity hotspots and areas of biofuel crop cultivation by UNEP/GRID-Arendal

World map showing biodiversity hotspots and areas of biofuel crop cultivation by UNEP/GRID-Arendal

Biofuels are a new generation of fuels that derive their energy from the carbon fixed in vegetation and algae. Palm oil biodiesel offers an alternative source of energy that can reduce current dependence on non-renewable fossil fuels and may reduce greenhouse gas (GHG) emissions. As the demand for clean energy grows, some energy companies are now increasing production of biofuels made from vegetable oils, including palm oil.
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Sime Darby palm oil storage tanks in Kunak, Sabah © CEphoto, Uwe Aranas

Sime Darby palm oil storage tanks in Kunak, Sabah © CEphoto, Uwe Aranas

Refineries turn crude palm oil into more useful products through industrial processes that remove any colour and flavour and any products of hydrolysis and oxidation. There is a lack of transparency at the refinery stage which means that stakeholders further upstream (growers and mills) are largely invisible to manufacturers. Refineries can play a key role in promoting certified sustainable palm oil (CSPO) by proactively sourcing palm oil from sustainable sources.
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