One of the main reasons that palm oil is such a complex commodity is the demand for a large number of fractions and derivatives of the oil. About 60% of the palm oil consumed globally is in the form of derivatives.

What is fractionated palm oil?

At the most basic level of refining, palm oil is fractionated, or split, into liquid palm olein and solid palm stearin at a ratio of 80:20. Further refining and blending may then be carried out to produce different oils with unique physical and chemical properties. Olein and stearin can be fractionated a second time to yield further derivatives: double-fractionated palm olein and stearin. The many derivatives of palm oil are used as ingredients in a wide range of food products, including pastry, cakes, margarine, confectionery, cooking oils, emulsifiers, and snack foods. Meanwhile, derivatives from palm kernel oil are used in cosmetics as well as in confectionery and margarine.

In Europe, the primary demand is for stearin, while most of the olein is sold in India and China. This raises a cost issue, as there is little demand for sustainable palm oil in these countries and an unwillingness to pay a higher price for sustainable derivatives when cheaper alternatives are readily available.

What oleochemicals are derived from palm oil?

In addition to the palm oil derivatives used for food applications, there are also a number of palm-based oleochemicals, including:

  • Fatty acids
  • Fatty alcohols
  • Fatty methyl ester
  • Fatty nitrogen compounds
  • Glycerine

These substances are used in shampoos, lotions, cleaning products, and candles, among other products.

Palm and palm kernel supply chain new

Oil Palm: Fractions and Derivatives by GreenPalm