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Blockchain can solve palm oil problems

As the consumer's desire for palm oil continues to grow, manufacturers and industry shakers look to the blockchain to solve problems related to production, accountability and sustainability.


The growing demand for palm oil in the last decade has pushed many new eyes towards industry.

Palm oil production has become a popular way to meet global vegetable oil consumption, as the yield / hectare ratio is very high.

Palm oil is also used as a conditioning agent in shampoos to restore natural hair oils. It is also commonly added to ice cream to help maintain a smooth quality.

Palm oil growers, processors and related consumer goods producers are currently grappling with problem solving and promoting sustainability, all through the notoriously complex supply of palm oil chain

Due to of a relatively opaque supply chain, there is still no clear way to trace palm oil in its original plantation. Despite the efforts of the roundtable on sustainable palm oil (RSPO), only 17% of global palm oil production is classified as sustainable.

 Due to a relatively opaque supply chain, there is still no clear way to trace palm oil in its original plantation.

As a result, industry regulatory bodies have difficulty with product certification. This is especially true when consumers require details on specific items.

However, a growing number of producers, regulators and consumers in the palm oil industry believe that the blockchain can be used to fill current gaps in the supply chain. Not to mention the promotion of transparency.

Organizing Towards Blockchain

Recently, a number of palm oil industry leaders announced the creation of a group called SUSTAIN (Sustainability Assurance & Innovation Alliance).

The aim of the collective is to establish a blockchain-based palm oil platform to address sustainability issues at the landscape level, as well as to reach the goals related to the NDPE (No Deforestation, No Peat, No Exploitation).

 The aim of the collective is to establish a blockchain-based palm oil platform to address sustainability issues at the landscape level.

The initial participants in the collective include the Asiatic Agri and Apical palm oil companies. Most likely other players in the palm oil supply chain will come together as the alliance develops.

According to Digital News Asia SUSTAIN will finally offer access to a system where parties can download tools to monitor traceability and compliance, FFB exchanges and use of best practice guides.

Patching Gaps in the palm oil chain

Others believe that the blockchain can be used as a support structure for a system that could control the geolocation of bunches of harvested fruits. The system would then be able to store information on the identity of palm oil workers and collection times.

This structure could provide government agencies and NGO officials with better information on the state of employment and general working conditions. At the same time, it could allow policymakers to access more information on agricultural practices before developing land use policies

Blockchain was also considered a tool to reduce deterioration of palm oil. Palm oil has a propensity to react badly if it is stored improperly. This has the potential to make the product harmful for consumption if the amount of free fatty acids (FFA) reaches a specific level.

Speculation is that the blockchain could be combined with IoT sensors to monitor shipping and shipping conditions to identify poor palm oil lots before they reach the market.

What role do you think Blockchain will play in the sprawling palm oil industry? Do not hesitate to let us know in the comments below.


Images courtesy of Shutterstock, Wikimedia Commons.

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