Palm Oil

Palm Oil

Palm oil is the most important vegetable oil in the world. It grows within a 5-10 degree belt from the Equator. Indonesia and Malaysia dominate production with close to 90% of world output. The growing area has also expanded in West Africa and Central America.

India is the largest consumer of palm oil in the world. Among high-income consumer markets, only the EU (ranked third) and the US (ranked tenth) appear in the top ten palm oil consumers. All high-income countries together consume one-sixth of world palm oil output. The remaining five-sixths are consumed by middle and low-income countries. Asia alone consumes two-thirds of the world’s palm oil supply.

Different Palm Oils

The oil palm produces two chemically distinct oils – crude palm oil (CPO) and palm kernel oil (PKO):

Palm kernel oil (PKO)

Palm kernel oil (PKO) is the primary product for the production of natural fatty alcohols. These are widely processed into products such as shampoos and liquid detergents. In addition, palm kernel oil is used in specialist food applications.

Crude palm oil (CPO)

Crude palm oil (CPO) is made into a variety of different products, including biodiesel, refined palm oil for frying, and specialist usage in confectionery, baking, and spreads. The versatility of palm kernel oil means it is found in a vast variety of different consumer products.

How is Palm Oil Grown?

The production of oil palm is split between plantations and smallholders. In many countries, plantations are required to include land for smallholders. The contribution to palm oil production from smallholders differs depending on the country. In southeast Asia, roughly 60% of palm oil comes from larger plantation companies and 40% from smallholders.

Oil palms produce fresh fruit bunches (FFB) which are harvested at intervals throughout the 20-25 years the palm oils is productive. This occurs when the oil palm tree is 3-4 years old. Oil palm cultivation and harvesting are very labor-intensive, which is a major disadvantage.

Benefits of Palm Oil

Palm oil does not require artificial hardening, via hydrogenation, for use as a food in hard fat applications. Since hydrogenation creates trans-fats, which are considered unhealthy and have limited use in many markets, palm oil is widely used as a naturally hard fat in food products. Therefore, palm oil is currently important in the production of confectionery, snack foods, and many baked goods in countries.

Oil palm is a very productive crop and produces more oil per hectare than other oil crops. The high yield means palm oil requires less area than competing oil crops for the same output. As the world’s population increases, palm oil is set to play a major role in food production.

Oil Palm is also harvested year-round, thereby providing the incomes of farmers over the year.

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