The U.S. Food and Drug Administration announced last week that it would take significant steps toward eliminating trans fats in American food within the next three years.
The move will likely change the way major food producers make popular foods, including some coffee creamers, frozen pizzas, refrigerated dough products and fast food. According to experts, this production change will be largely propelled by an increase in the demand for palm oil, a substitute made from certain tropical trees.
As a result, Chicago-based Archer Daniels Midland may be in a position to profit.
Annual financial reports show that ADM has a 17.3 percent ownership interest in the palm-oil cultivator Wilmar International Limited. Wilmar has headquarters in Singapore and is a leading agribusiness group in Asia.
“Palm oil is an extraordinarily versatile product employed in a wide range of applications,” an ADM news release stated. “Refined varieties are used in manufacturing shortenings, cooking oils, margarines, baked goods and a host of other food related ingredients and finished products.”
Although palm oil is healthier and does not include trans fats, environmentalists have pointed out that it is often produced at great cost to the world’s rainforests. Glenn Hurowitz, chairman of the Forest Heroes campaign to promote sustainable agriculture, discussed deforestation concerns in a recent NPR interview:
“Well, palm oil is grown, mostly, in the Paradise Forests of Southeast Asia. They're these vast rain forests that are home to Sumatran tigers, rhinos, orangutans and Sumatran elephants, all of which are endangered species. But the palm oil industry has cleared over 30,000 square miles of rain forest. Much of that rain forest actually sits on these ultra-carbon-rich ecosystems called peatlands that are - have accumulated thousands of years of biological material. So, not only is clearing these vast forests for palm oil plantations threatening biodiversity, it's also a globally significant source of carbon pollution.”
ADM officials have repeatedly expressed their concerns over palm-oil related deforestation through company news releases. In May, the agribusiness pledged to only offer certified sustainable palm oil to its North American customers starting in 2015. If certified as sustainable, the oil cannot come from illegally deforested sources.
ADM has palm distribution and processing facilities in Nebraska, Illinois, Georgia and Louisiana.
“ADM and Wilmar share a commitment to environmental stewardship and community preservation,” said Ray Bradburry, vice president of ADM’s North American Oils group during the May announcement. “This enables us to offer customers a palm oil product that is fully traceable and sourced from crops that are responsibly grown and harvested.”