Stories from Deli

Palm Oil

Although the African oil palm (Elaeis Guineensis) had grown in Indonesia since I848, it was not until 1910 that it was planted on a commercial scale, and then near the tobacco plantations of the East Coast and southern Atjeh. Although some trees are grown in Java, the bulk of Indonesian palm oil has always come from Sumatra, which became the world’s largest producer from 1935 to 1941.

Like the nutmeg tree, the oil palm produces two economic products. The outside of the fruit yields the palm oil which we use for soap, margarine and lubricant (especially for railway car axles). In tin plating it is used with another Sumatran product; heated sheets of steel are dipped in palm oil prior to the tin dip in order to give a clean and even surface. Because of its low fatty acid content Sumatran oil was long preferred to the African product for margarine. The kernels produce a different oil, more like that of the coconut, and it is used for soap, chocolate, pharmaceuticals and perfumes.

In the first year of Sumatran production, 1918, the United States took its first palm kernels, and in the next year it imported its first palm oil and palm oil cake, the residue of the pressing of the hulls. In the early 1920’S most of our imports of oil came in wooden casks. The first large shipments from Sumatra to the United States began in the second half of 1925 when it became possible to ship directly in bulk. Shipments rose annually to the 1937 record of 285,611,563 pounds of oil worth S 10,714,561. In that year our imports of palm oil products from Dutch areas amounted to over 12.5 million dollars. This included palm kernel oil which had been coming from the Netherlands since 1934, and palm kernels shipped directly from the Indies.

Imports of Sumatran palm oil (and tobacco as well) were assisted by the reciprocal trade agreement between the United States and the Netherlands. It became effective on February I, 1936, forestalling domestic pressures in the United States to raise tariffs.

After the 1937 peak the shipments fell off until stopped by the war in 1942. Postwar production in Sumatra has been hindered by the fact that so many plantations lie in insecure areas which are barely under government control, such as Atjeh. Imports of palm oil resumed in 1948, and though there were no imports in 1950, the next year was the postwar peak, with 33,632,354 pounds worth $ 6,307,815. This peak was caused partly by emergency stockpiling which caused a minor flurry in 1953. In that year Senator Joseph R. McCarthy (R. – Wis.) took time out from investigating the Voice of America to find out why the government had allowed over a million pounds of Sumatran palm oil to “freeze” in Baltimore. Government officials confessed the error of not having put heating coils into the storage tanks, but assured the Senator that the oil would thaw by the time it was needed for a war.83 Since the Korean War imports have declined until in 1959 we imported 1,390,702 pounds of palm oil from Indonesia, worth $ 132,521.

Representing only four percent of our imports by value, Indonesia still ranks second after the Belgian Congo as a supplier of palm oil. In 1959, we also imported from Indonesia 257,513 pounds of palm kernel oil valued at $ 21,605.

James W. Gould. Americans in Sumatra. 1961