Indonesia and Malaysia are again at loggerheads with the European Union over their production and export of palm oil. The two Asian nations, whose climates are ideal for making the uniquely serviceable oil, account for over 80% of production of the oil, and dominate global trade, according to an analysis of IHS Markit's Global Trade Atlas.

Top exporters, palm oil, 2016

Palm oil is an edible vegetable oil made from the fruit grown on the African oil palm tree. The trees are originally from Africa but grow in places with plentiful heat and rain, like Central America and Asia. Although it's plateaued this decade, global palm oil trade has taken off since last decade, rising even through the global financial crisis. And, to be sure, much of the tapering off in global trade can be explained by lower prices.

Total global palm oil trade, 2007-2016

The reason for palm oil's popularity is that it's a handy ingredient in industrially-made consumer goods and foods such as cookies, shampoos, makeup, detergent and toothpaste. It's also healthier for humans than some other alternatives, especially petroleum-based products. Global consumer goods and industrial food firms such as Colgate-Palmolive, Kellogg's, Nestlé, Unilever and Wilmar rely heavily on palm oil, and they're finding their most enthusiastic buyers among the rising middle classes of developing countries.

Top importers, palm oil, by kg, 2016

But according to environmental activists, especially in the EU, palm oil production has major side effects, such as deforestation, habitat degradation, cruelty to tigers, orangutans and other animals, and the abuse of indigenous people. The European Parliament in April passed its "Resolution on Palm Oil and Deforestation of Rainforests", which includes legislation setting in motion a certification scheme that could result in a ban on the commodity by 2020. The goal, for the EU, is to slowly replace palm oil with vegetable oils exclusively grown in the EU.

Losing access to what is still the world's number one economic bloc is a headache for Asian farmers, and Asian leaders have been pressing their case to EU diplomats, arguing that the ban will hurt people like migrant workers from Myanmar who labor on palm oil plantations, as well as Indonesian and Malaysian small farmers. "These restrictions do not reflect the commitment by the global community toward meeting the Sustainable Development Goals and entail adverse implications for the palm-oil industry, a critical economic element in producer countries," an alliance of Asian leaders said in a recent statement.

Indonesia's leaders are especially upset and have pressed their case to EU diplomats, arguing that palm oil growers support their country's efforts to eradicate poverty and keep their economy humming. Over 15 million Indonesians, they say, work jobs related to palm oil.

However, according to analysis of trade data, maybe Indonesia shouldn't be too worried. Shipments to the EU account for only a fraction of their exports.

Indonesia's top palm oil buyers, by kg, first half of 2017

India and China are the exciting growth markets for palm oil producers, traders and shippers. India has exceptionally high demand in the fall, it should be noted, because it's the season when Hindus hold significant holidays like Dussehra and Diwali, feasts that are heavy on sweets and fried foods laden with palm and other vegetable oils. And in China, palm oil accounts for a large percentage of the country's edible imports, although it competes against soybean oil.

The vigorous appetite for palm oil of the two Asian powerhouses helps explain why, despite the EU's threat to turn off the tap, Malaysia's Sime Darby Bhd, the world's number one oil palm planter by land size, said recently that palm oil prices would likely hold steady into the New Year.