Quick start guide to making money from palm kernel oil business for beginners

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Palm Kernel Oil Processing - Business Opportunities in Red Palm Oil Production

 

Over 50 percent of good oils consumed all over the world is made up of palm oil. Every year the global palm oil market is worth over hundreds of millions of dollars. The dominant powers in palm oil production are Malaysia and Indonesia and they currently supply over 70 percent of the palm oil consumed all over the world.

Palm oil is used for so many things in different industries, cultures, and markets because it is a hugely versatile vegetable oil. In food, palm oil is used as a replacement for fat to make coffee cream, condensed milk, margarine and ice cream.

Because it has the ability to resist high temperatures and its consistency, it is mostly used as cooking oil and is rated as one of the very best oils for frying. These awesome qualities in palm oil makes it a highly needed commodity in restaurants, food processing industries and homes.  

 

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Palm oil can also be used as a non-food product because it is a very important raw material in the making of soaps, lubricants, detergents, candles and greases.

You will also be amazed to know that with the rising profile of the biofuels market, palm oil has again proven to be an important feedstock for biodiesel and serves as another choice to mineral oils used in power stations.

The derivatives from palm oil are used worldwide in the cosmetics and pharmaceuticals industry. It is also used to produce printing ink, water-treatment products and drilling fluids.

Palm oil is sold on the international markets as Crude Palm Oil and it normally has a high premium price given its huge capabilities and high demand from different industries.

Now let’s take a look at various business opportunities available in red palm oil production

There are so many good opportunities for entrepreneurs to make so much money in the growing and successful global palm oil business. Here, I shall be discussing about the different opportunities in this market and their mighty potentials for investors and business people.

You have to grow an oil palm plantation

Around West Africa, lies the world’s oil palm belt – it is a place which produces the best results for oil palm plantations.

However, because not enough palm trees are cultivated on a commercial scale, Africa produces little palm oil than it is actually capable of.

These are the reasons which make Africa the best place to cultivate oil palm plantations:

Hot weather all year – Oil palm normally grows very well where the weather is hot every time: let’s say between 25 and 28 degrees Centigrade. Hot temperatures let the oil palm grow many leaves and produce more fruit and higher temperatures means that disease attack will be lesser on the palm trees.

A lot of sunshine – A lot of sunshine is needed by oil palms to grow very well. Sunshine make the palms to produce big and very ripened fruits containing a lot of oil.

Abundant rain – Oil palms don’t grow very well in places with shortage of water. Abundant rain is good for the trees and it makes them to grow a lot of leaves which then bring more clusters of fruit.

Rich, deep, flat and permeable soil – For oil palm to grow very well it needs access to mineral salts and water deep down in the soil. If it does not get easy opportunity to these needed nourishments, the yields (harvest) will be very low. The soil also need to be soft enough for water to soak through (permeable) so make sure that the soil is well drained always. Although, just in case there are no adequate minerals in the soil, fertilizers can be applied to help the existing supply.

You need to start a palm oil processing and milling plant

Due to the ineffective and wasteful old methods of squeezing out palm oil from the pulp of the palm fruit, a lot of oil still remains in the pulp and is lost but modern mills process palm fruits into last grade palm oil with little or no waste and low use of human power.

When using machines, the method mostly involves threshing and sterilizing the bunches to make the palm fruit free, then mashing the fruit and bringing out the crude palm oil.

The crude oil will then be treated to purify and dried for storage and sale in local and also international markets.

Investing in a milling plant is a great way of income if it is situated close enough to oil palm sources. There are two main method to make good money from this venture which are:

Always charge service fee to process harvested palm fruits for people. You can charge a flat fee per hour or per kilogram basis.

You can also buy harvested palm fruits from small-scale farmers, and then produce the palm oil and sell to local and international markets.

This method has a good potential for lots of profits because of the capacity of the mill to get palm fruits from small scale farmers at low prices and sell the palm oil that will be processed at a much costly price.

You can become a bulk trader

They buy already processed palm oil in big quantities and keep them for export or sale in the local market.

During harvest which happens normally between March and May, the prices of palm oil reduces to low levels because the product is in abundance on the market. However, during the rest of the year which is the non-harvest periods, when palm oil becomes less on the market, the prices as expected go through the roof.

This scarcity usually happens at the end of each year between September and December and can make palm oil prices rise as high as 100 percent.

This period of scarcity and abundance always continues because there are inadequate storage facilities to make sure there is an all-year round supply of palm oil to the market.

Now a bulk trader sets up a storage program that let him/her to buy in large quantity from the market at a very cheap price during times of abundance and sell back to the market when scarcity comes in. This strategy obviously requires large space for storage and it incur significant handling, holding, and transportation costs.

   

 

 

 

 

 

 

 

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