CTRM for Ags & Softs
Palm Oil
Grown primary in the tropical belt of Asia and Africa , the seed of the oil palm fruit produces light yellow oil commonly used in food preparation and consumer products . With each hectare of oil palm producing an average of 3.9 tons of palm oil and 0.5 tons of palm kernel oil , palm oil is considered one of the more environmentally sustainable oil crops and is free of any GM concerns . Given its utility and increasing popularity as cooking oil in Asia , Africa and other parts of the globe , palm oil is the most traded vegetable oil in the world .
Overview
The food industry , the largest consumer , uses palm oil on an industrial scale for frying and cooking , most commonly noodles , potato chips and other packaged consumer food products . Palm oil is also commonly used by consumers and may be used interchangeably with other vegetable-based oils in salad dressings , baking and as frying oil .
Given palm oil ’ s natural fragrance , it is often used in the manufacture of soaps . In fact , soap production is the largest nonfood use of the oil , with palm-based soaps found all over the world
In recent years , palm oil has become an increasingly important component in biofuel production .
Palm Oil Production
While technology improvements continue to increase the oil yield from palm seeds , the basic steps in the production of palm oil can be largely described as 1 ) harvesting and transporting fruit bunches from the plantation to the production facility ; 2 ) separation of the palm fruit bunches ; 3 ) cooking or steaming the palm fruit to sterilize and better enable
“ Refining Margin : In Palm Refining where the Crude Palm Oil ( CPO ) is refined to produce Refined Deodorized Bleached Olein ( RBD Olein ), Refined Deodorized Bleached Stearin ( RBD Stearin ) and Palm Fatty Acid Distillate ( PFAD ), the refining margin is negative most of the time . It becomes critical to measure and monitor the refining margin based on the latest market prices and decide whether to take hedge positions or not . Refiners also have multiple options . They can sell the CPO or convert the CPO to midstream product Refined Palm Oil ( RPO ) and sell RPO or sell the RBD Olein . It is critical for them to monitor the profitability of each of the options and make the correct decision .”
Joel Lou – Allegro Development extraction of the oil ; 4 ) crushing and pressing of the fruit to extract oil . The particular machines and / or processes used may vary by the size of the production plant , such as hand separation of the fruit bundles versus mechanized separation usually found at the larger facilities . Nonetheless , the steps are well established and have been used in one form or another for thousands of years .
Once the oil is extracted from the crushed fruit , the fluid , which will contain impurities such as cell debris and water , will be purified . As palm oil is a naturally thick product , hot water will be added to thin it , enabling the pure oil to separate as it rests in large settling tanks . The oil is then collected and cooked once again to remove any residual water that may have been trapped or collected . The final product , pure palm oil , is than gathered and stored , and made ready for shipping .
Shipping palm oil requires special handling to ensure it remains liquid throughout its supply chain . Crude palm oil must be transported in insulated and heated containers , with the temperatures carefully monitored to prevent either solidification or scorching of the cargo . Bulk shipping is generally via specialized edible oil bulk tankers or via containerized , heated tanks .
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