The palm oil supply chain includes growers, millers, shippers, traders, processors, product manufacturers and retailers. It takes months for palm oil to flow through this chain, during which it is traded, refined and processed. To present one set of supply and sales numbers, we had to simplify. Sometimes we look back just 12 months to reflect only the most recent trends.
Supply of certified palm oil is calculated by multiplying certified production capacity by the number of days that capacity was in place. Production capacities are taken from certification audits, and new palm oil mills come 'online' as soon as their audit report has been approved.
Sales reflect payments for sustainable oil to producers, not product sales to consumers. Numbers come from GreenPalm and UTZ Certified.
GreenPalm operates the Book & Claim system. Here, a 'sale' takes place when a GreenPalm certificate is bought from a producer by a consumer good manufacturer or a retailer.
UTZ Certified administratively monitors oil flowing through the Segregated and Mass Balance systems. Here, a 'sale' occurs when sustainable palm oil is bought from a producer. The oil may be purchased by another company (such as a trader), but ownership may also be transfered to an overseas subsidiary of the same multinational company. The oil itself is probably months away from being used in consumer goods.
To compare supply and sales numbers for palm kernel products, we apply a standard conversion rate according to which 100 tonnes of palm kernels produce 45 mt of palm kernel oil.
Finally: Palm oil is traded in a complex commodity market, and sales and supply don't always match neatly at any given time. 'Market uptake' at times may exceed 100%, for example, because certificates were bought for oil shipped a few months before. Over the long term, the numbers accurately show how the production and use of certified sustainable palm oil are increasing.
