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.
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
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
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.
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.
are the reasons which make Africa the best place to cultivate oil palm
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.
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.
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.
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.
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
The crude oil will then be
treated to purify and dried for storage and sale in local and also
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.
can become a bulk trader
They buy already processed
palm oil in big quantities and keep them for export or sale in the
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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