Oil Palm’S Challenge To

The Coconut

Production Extending Rapidly From West Africa to East Indies

Specially Compiled for The Pacific Islands Monthly.

A PRIMARY contributing cause to the low price of copra is the extraordinarily heavy production throughout the world of oils which may be used, as an alternative to coconut oil, in the manufacture of soap, margarine, etc. They are mainly palm kernel oil, whale oil, peanut oil and soya bean oil.

As the growth and development of rival oils are likely to affect the future of the copra industry, and as some South Sea observers regard palm oil as an even greater menace than whale oil, The Pacific Islands Monthly has collated all available in formation about the position and prospects of palm oil.

PALM oil, and palm kernel oil, are the product of a West African palm, extensively cultivated in West Africa and the East Indies, but unknown in Australia. There is said to be an experimental plantation in the Solomon Islands ; and experiments are also being made in the Cook Islands.

The palm itself is of a bushy type, not at all resembling the palm of popular conception, and it produces a fruit of coffee colour, and about the size of a Rugby football.

This fruit has a pulpy exterior and a hard kernel. The fleshy, outside portion contains a very large proportion of a white oil, known as palm oil. The semi-hard kernel of the fruit gives two products, oil and feeding-cake, used for stock. The white palm oil merely supplements coconut oil, tallow and the other constituents of soap ; but the kernel oil is almost identical in character to coconut oil and possesses the same qualities. This kernel oil, then, is one of copra’s great rivals.

During the past half century, the production of palm kernel oil has been definitely on the increase. About 1880, Germany established large factories for the treatment of the product, which at that time all came from the one source—West Africa. During the Great War, England saw the necessity of establishing her own crushing plants for dealing with the product from her African possession, and in 1916 a Government committee decided that ample facilities could be provided in the United Kingdom for crushing the whole of the kernel crop.

West Africa’S Oil Wealth.

In evidence before this committee some interesting facts were disclosed.

It was stated that in 1913 the value of the trade in palm oil and palm kernel, oil from West Africa amounted to over £8,000,000.

Particular emphasis was laid on the fact before the committee that the oil from the kernel could be made into soap, vegetable lard or margarine, and the balance of the kernel —the feeding cake—could be sold in its existing form as palm-kernel cake, or meal, or used

as a component of one of the compound cakes then on the market.

Competition likely from new varieties of nuts, produced in other parts of the world, was also considered. In Central and South America, it was stated, the cohune and babassu nuts had been engaging attention, and the committee was informed that other varieties of oil-producing nuts might become available.

One compilation subsequently gave the following as the exports from West Africa, over a quarter of a century : ... Year ... Kernels ... Palm Oil ... Tons ... Tons ... 1900 ... 85,600 ... 45,500 ... 1905 ... 136,600 ... 54,900 ... 1909 ... 158,800 ... 67,900 ... 1917 ... 186,000 ... 67,500 ... 1925 ... 272,900 ... 70,000

Oil Palms In East Indies.

It is since the war that the greatest strides have been made in growing the African oil palm. West Africa has continued its crude native methods of cultivation, and its market is now challenged by the Dutch East Indies, where the area under crop in Sumatra alone is over 50,000 acres. This has been planted scientifically and systematically, with improved methods of treatment, and a corresponding improvement in the value of the product.

Indeed, West African trade circles fear that the Dutch Indies and Malay Archipelago will soon be strong competitors in the palm oil markets previously controlled by them.

Sir Hugh Clifford, G.C.M.G., when Governor of Nigeria, pointed out that the gradual extension of plantations in the Dutch East Indies was a menace which it would be the height of imprudence to ignore. He suggested the introduction of central factories, equipped with modern machinery and under scientific management for manufacturing the oil for export. It was estimated that in the Gold Coast alone as the result of crude methods employed palm products to the value of well over £1,000,000 were being allowed to go to waste annually—a loss to the nation and the industry.

In the Gold Coast Handbook for 1924, the hope is expressed “that efforts will be made to cultivate the oil palm on plantation lines, with the necessary machinery, otherwise the product will be unable to compete with that of plantations in other parts of the world.”

A writer in “The British Soap Manufacturer” in July, 1930, said that it is calculated that within 10 or 15 years Sumatra will be exporting 100,000 tons of palm oil, as compared with an estimated total export of palm oil from West Africa of 140,000 tons. Sumatra produced 8,000 tons of palm oil in 1925.

A report on commerce, industry and agriculture in the Netherland East Indies in 1927, published fairly recently, stated that oil palm plantations on the east coast of Sumatra produced 13,283 tons of oil in 1926 and 21,617 tons in 1927. There were then 54 estates cultivating oil palms 9 in

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Java, and most of the remaining 45 were in Sumatra. It was remarked that the oil palm was not very subject to diseases and pests.

West African Production.

It has been difficult to get actual West African production figures of a recent date. In 1925, according to the Statesmen’s Year Book, the West African production was as follows: ... Palm Oil ...Palm Kernels ... Tons ... Tons Nigeria ... 128,113 ... 272,925 Gold Coast ... 1,423 ... 6,569 Sierra Leone ... 2,988 ... 63,231 There is also a large export of both commodities from the French territories of Togo and Cameroon.

While all these facts about the fight for markets between Africa and Dutch Indies may not interest the South Sea plantation owner, they do show the attention that is being paid to this commodity throughout the world, and to its extensive cultivation.

Copra To The Fore.

The main point at issue is how palm kernel oil compares with and affects copra as a marketable product. As has been already stated, they are interchangeable with one another.

To revert again to the proceedings of the British Committee in 1916. It was then stated: “Effective competition of coconut and palm kernel oil does not necessarily mean that each will not continue to used AT A PRICE; and it is only if the price fell below that of profitable production that the oil would go out of use altogether.

“As regards the two oils, the ruling price is affected by both, but

predominantly by coconut oil, in so far as the present world’s supplies of it is double that of kernel oil.

The production of both is increasing and it would be rash to say which has the greater possibilities.”

The position at present is that one is regarded as a foil to the other. When the price of coconut oil increases the users turn to palm kernel oil; when palm kernel oil increases in price, the users turn back to coconut oil. On August 1 of this year the market price at Hamburg for palm kernel oil was £26/15/- a ton and for coconut oil £28/17/- a ton.

Where copra possesses a distinct advantage is in the oil content, which is of greater value than the cake. A ton of copra yields 60-72 per cent. oil and the balance cake. But the production of the white palm oil, worth at present about £22 per ton, from the same tree, may swing the pendulum slightly in favour of the cultivation of the African oil palm.

Regarding this palm, a writer in a recent issue of The British Soap Manufacturer says: “The demand for palm oil is strong and increasing, not only in Europe and America, but also in the Far East, where large markets are developing, and Sumatra palm oil is specially adapted to the manufacture of margarine by reason of its low percentage of free fatty acids. With expenses for development of an oil palm estate being low and the upkeep, through profitable catch crops, working out at quite a small figure, and with good returns already being obtained at the end of seven years, the Dutch East Indies is making a bold bid for the palm oil trade.”

The article also mentions that in British Malaya, the oil palm bears fruit three years after planting. But in most other places it takes twice as long. ———