JOURNAL MONITOR VOL.2 NO.8 : PALM OIL AND FOOD-FUEL TRADE-OFF ISSUE
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Biofuels produced from agricultural commodities were developed as a solution to the increasing trend of crude oil prices and reducing emissions as a mitigation of global warming. However, the development of biofuels raises concerns in the global community that a trade-off will occur between the use of agricultural commodities for food and energy, which will have an impact on increasing food commodity prices.
Biodiesel is one of biofuel products has increased significantly in the last decade. This also has implications of the use of palm oil as the main feedstock for the global biodiesel industry which has also increased. However, the increased use of palm oil as feedstock has not been followed by an increase in the price of palm oil. This shows that the food-fuel trade-off issue on the global palm oil market does not exist.
The potential for palm oil to minimize the issue of trade-off because it has such as large volumes, stable supply throughout the year, and competitive prices. The presence of palm oil in the global vegetable oil market gives benefits to the community by fulfilling food and energy needs. Not only that because palm oil has role to preventing excessive increases in vegetable oil prices, the global community also enjoy benefits from food and biodiesel based on other vegetable oils such as soybean oil, rapeseed oil, and sunflower seed oil. If we linked to the SDGs, palm oil and other vegetable oils can contribute to the achievement of SDG-2 (Zero Hunger) and SDG-7 (Affordable and Clean Energy).