However, what we perceive may not be the actual truth or the whole truth. We often tend to equate high prices with high quality even if that is not really the case. The price in such cases is often for prestige-related brand associations rather than just product quality.
For instance, recently television journalist Palki Sharma highlighted how Dior bags sell at $2,800 while costing only $57 to make. As a prestigious fashion label, Dior commands a premium in the market that is based on the perceived value of ownership. Perceptions play a significant role in many markets.
That is true even for some commodities that have a certain image among consumers and therefore have brand-like characteristics. An interesting example is that of palm oil, which has a massy rather than classy appeal, ironically because of its affordable pricing.
Despite this ‘miracle oil’ being in heavy use as a production input across food and non-edible products in India, including biofuel, it has been getting a lot of negative press lately, as some brands and influencers clamber onto an anti-palm oil bandwagon.
This narrative persists even as prominent soap manufacturers such as Godrej say they cannot compromise on product quality by getting rid of palm oil. Even PepsiCo, which decided to do away with it, has resorted to its palmolein blend instead.
So, if palm oil is irreplaceable in several production processes, why has it been painted as a villainous ingredient?
Let’s start with what makes it affordable and the answer may surprise you. It is highly land-efficient, supplying between 35% and 40% of the world’s vegetable oil demand by making use of just under 8.6% of all the land used for the production of all vegetable oils across the world. Yes, you read that right; this means that, on average, other oils use many multiples of extra farmland to turn out the same volume.
Palm oil has been portrayed as being bad for the environment, but its harm is often overstated, as Hannah Ritchie from the University of Oxford’s ‘Our World in Data’ points out. Her research suggests that if all substitutable oil demand were met with palm oil, globally, it would require only 77 million hectares—a fraction compared to other oils.
That palm oil leads to deforestation as natural forests are cleared for palm plantations is also an outdated narrative. In Malaysia, a major exporter, palm-oil corporations have taken action towards sustainable farming, with 83% of palm oil refining capacities operating under a ‘No Deforestation, Peat and Exploitation’ (NDPE) commitment. As reported by Global Forest Watch in June 2023, this has led a sharp reduction in forest loss.
The Indian government recognizes the importance of expanding the domestic cultivation of this crop. Its recently launched National Mission on Edible Oils-Oilseeds aims to reduce our dependence on imports. In 2023-24, India imported approximately ₹80,000 crore worth of edible oils, with palm oil alone accounting for over half that figure.
A government scheme under the Mission focuses on raising India’s oil palm output by offering our farmers protection from market fluctuations and incentivizing sustainable production.
Now that we have established that palm oil has successfully overturned the deforestation narrative, what about perceptions of it around dinner tables? For starters, all oils, when consumed in moderation, can be part of a balanced diet. That said, all oils, from sunflower to groundnut and palm oil, come with their unique characteristics.
Palm oil gives ice cream its silky-smooth texture. It also makes chips crisp and biscuits crunchy. It is also popular among processed food manufacturers because it remains semi-solid at room temperature.
As for health effects, olive oil gets most attention at dinner tables as being good for us. However, low yields and supply volumes keep olive oil expensive. Research shows that palm oil, which is considered high in saturated fat, contains a high percentage of heart-healthy mono-unsaturated fatty acids, like olive oil.
It also has a high smoking point and can be stored for longer, unlike some other oils, without going rancid. These are perhaps the reasons why palm oil is available through ration shops under India’s public distribution system.
Palm oil, contrary to popular perception, can also reduce cholesterol, thanks to its unique Vitamin E composition and abundance of tocotrienols, as mentioned in the ICMR-National Institute of Nutrition’s 2024 Dietary Guidelines for Indians.
Here’s another interesting nugget: unrefined red palm oil is said to contain 15 times more retinol (provitamin A) equivalents than carrots, 300 times more than tomatoes and 44 times more than leafy vegetables.
The case of palm oil is a remarkable example of the disservice that ill-informed perceptions can do to our well-being. It isn’t causing deforestation and is better for our health than many think. Significantly, a lot can be produced with very little land, which makes it weigh lighter on our pockets too.
The author is an angel investor and independent director
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