Twix Chocolate Bars Threatened by Indonesian Drought


B. McPherson
Are you killing the orangutans? Demand clean palm oil.
The palm oil industry in tropical south east Asia has been hit by a severe drought. Rainfall has dropped to levels not seen in over a decade. The oil palms are very sensitive to lack of water and adapt by producing fewer and smaller fruits which, crushed, are the source of palm oil. Indonesia normally produces 86% of the world’s supply of this versatile oil.

Twix chocolate bars are a small fraction of the uses industry has for this oil. Widely used in the food industry, palm oil is also found in many cosmetics and used as biodiesel in some countries.

The two largest consumers of palm oil, India and China, are facing steep increases in the price of the commodity as production has fallen 12%. Some shortfall may be made up by competing oils produced in the Western Hemisphere, canola and soybean oil.

The agricultural industry has been hit in other areas as well with a falling off of rice and coffee production due to erratic weather – too much rain, then too little. This has been an increasing trend over the past few years as the weather patterns in SE Asia look to be turning much drier.

Current pictures made available by NASA show the island of Sumatra engulfed in smoke from forest fires. It has been reported that the majority of fires have been deliberately set to clear the way for palm plantations. While some palm oil corporations use responsible methods, others strip the land for a quick fortune with little to no regard for the environment or the people living there.

 Most sobering is the finding by the Asian Development Bank that Indonesia, Thailand, the Philippines and Vietnam will be among Southeast Asia's worst weather-affected countries by the end of this century. Damage from climate change will sap an average 6.7% of combined gross domestic product annually of those economies by 2100. In response, Indonesian government spending to mitigate natural disasters ballooned from 0.6% of GDP in the mid-2000s to 1% in 2012.  Asian Nikkei Review

Sources:
NASA    
Bloomberg News    http://asia.nikkei.com/print/article/27640
Money Week   

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