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Oilseed & nut

Oil palm: what can it become?

Oil palm gives red palm oil from the fleshy fruit and a second set of products from the kernel inside the nut, plus fibre, shell and bunch by-products.

  1. Raw oil palm
  2. Processing
  3. Value-added products
  4. Packaging
  5. Markets
  6. Customers

Value is lost when fruit is bruised or left waiting, because the oil starts to break down quickly and becomes harder to sell to refiners. Value is created by prompt, careful handling and clean, well-managed extraction, and by using each part of the fruit: oil from the pulp, kernels for a second oil and a feed cake, and fibre and shells as fuel. Some local consumers like the taste of oil from bunches left to ferment for a few days, but that same practice makes the oil less suitable for refiners, so the target customer shapes how you handle the fruit.

What can oil palm become?

Red palm oil

Oil pressed from the fleshy part of the palm fruit, used in cooking and sold to traders and refiners.

Processing
Fresh fruit bunches are cut and brought to the processing site with as little bruising as possible. The fruit is heated (sterilised) to stop spoilage, separated from the bunch, pounded in a digester, pressed, then the oil is separated from water and solids by settling and reheated to drive off moisture.
Equipment
  • Cooking or sterilising vessel
  • Threshing area or beater
  • Digester
  • Manual or screw press
  • Settling and clarifying tanks
Packaging
Clean, food-safe containers with tight lids and clear labelling; keep out water and dirt.
Storage
Cool, shaded, clean storage away from water and contamination; process fruit quickly so oil quality is not lost before it reaches the container.
Customer types
  • Households
  • Market traders
  • Food vendors and caterers
  • Refiners and bulk buyers
Distribution
Sold directly in local markets, through traders and aggregators, or in bulk to larger buyers who expect consistent quality.
Possible business models
  • Own small mill
  • Contract (custom) pressing for farmers
  • Buy fruit, process and resell oil

Palm kernels

The seed inside the palm nut, which can be sold as a raw material or processed further.

Processing
After the oil is pressed, the nuts are separated from the fibre and dried. The nuts are then cracked and the kernels separated from the shell, for example by winnowing or by floating them in a clay-and-water bath so that shells sink.
Equipment
  • Nut-cracking stone, hammer or mechanical cracker
  • Winnowing tray or clay bath
  • Drying mats or racks
  • Sacks
Packaging
Dry, clean sacks or bags in a form that lets air move and keeps moisture out.
Storage
Dry, off-the-floor storage with good ventilation; kernels need to be dry before cracking and before long storage.
Customer types
  • Local kernel oil processors
  • Traders and aggregators
  • Larger crushing mills
Distribution
Sold in sacks to local traders, kernel oil processors or aggregation points.
Possible business models
  • Collect nuts and crack kernels
  • Aggregate kernels from many small producers
  • Sell cracking services to mills

Palm kernel oil and cake

Kernels are pressed for a separate oil that is solid at room temperature, leaving a cake that can be used as livestock feed.

Processing
Traditionally, dried kernels are fried or roasted, ground to a paste, mixed with water and heated, and the oil is skimmed off. Mechanical expeller stations crush or flake kernels, heat them and press out the oil, leaving the cake. Large mills may use solvents, which are not suited to small enterprises.
Equipment
  • Roasting pan
  • Grinder or roller mill
  • Expeller press
  • Filtering and settling containers
Packaging
Oil in clean, tight containers; cake in dry sacks.
Storage
Keep cake dry, because wet cake left in heaps can grow mould; store oil away from heat and contamination.
Customer types
  • Local households and food users
  • Pig and poultry farmers
  • Ruminant livestock keepers
Distribution
Oil sold locally or to traders; cake sold directly to livestock keepers, rather than left to pile up.
Possible business models
  • Own small kernel-processing unit
  • Contract pressing for kernel owners
  • Buy kernels, process and sell oil and cake separately

Fibre, shell and bunch by-products

Fibre, kernel shells and empty fruit bunches left after processing have practical uses on and off the mill.

Processing
Fibre, shells and empty bunches are separated and dried. Fibre and shells are used as fuel, empty bunches are partly dried for fuel or returned to the plantation as mulch, and ash can be recycled.
Equipment
  • Fibre and nut separator
  • Drying space
  • Boiler or furnace
  • Storage bins
Packaging
Usually sold or used loose or in sacks; no special packaging beyond keeping material dry.
Storage
Dry, covered storage so material is ready to burn or spread when needed.
Customer types
  • Own mill or processing unit
  • Blacksmiths and local builders
  • Farmers needing mulch
  • Neighbouring processors needing fuel
Distribution
Used on site, or supplied locally to nearby users.
Possible business models
  • Use as mill fuel
  • Sell or exchange locally
  • Return to the plantation as mulch

The customers, routes to market, business models and many practical tips on this page are suggestions, not findings. Know something better? Suggest an improvement →

Business opportunities around oil palm

Sources and further reading

The handling, processing and storage information on this page draws on the sources below. The lists of customers, distribution routes and business models are practical suggestions, not findings from these sources. Links open in a new tab.

Examples describe possibilities, not guaranteed results. Prices, demand and rules vary by country and season — verify locally.