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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