A private equity firm aims to invest roughly $50 million in new oil palm plantations in Peru, reports Bloomberg.
Singapore-based Asian Agri Capital is portraying its potential investment as an anti-drugs measure. It says oil palm offers an alternative crop to coca — the plant used to produce cocaine — in Peru, which rivals Colombia as the top producer of coca leaf.
“Palm oil has made money consistently for 30 years for its growers,” Dennis Melka, joint chief executive officer of Singapore-based Asian Plantations, told Bloomberg. “I tell people that it’s the most profitable crop that humans can grow outside of narcotics.”
As of 2009 Peru had only 14,000 hectares of oil palm plantations according to the U.N. Food and Agriculture Organization. By comparison, Indonesia, the world’s largest palm oil producer, has roughly 8 million hectares of plantations.
Oil palm is the one of the world’s most productive sources of vegetable oil, but expansion at the expense of tropical rainforests has made it controversial among environmentalists, who note that vast areas of wildlife-rich and carbon-dense forest in Indonesia and Malaysia have been cleared for plantations.
Coca leaf is grown widely in the Peruvian Amazon. While some production for traditional use is sanctioned by the government, clandestine coca leaf production for refinement into cocaine remains a serious problem in the country.