Palm oil

Palm Oil Quality Standards for Trading

Tan Yew Ai

 MPOB PORAM Course on “Operational and Commercial Aspects of Palm Oil Trade” 27 & 28 May 2013

Global importance of palm oil • Most heavily consumed oil in the world

 Average world demand has has grown by 3% •  Average yearly in the past 30 years • Used in almost half of all processed foods and cosmetics • One in ten supermarket products contains palm oil

Global importance of palm oil • Most heavily consumed oil in the world

 Average world demand has has grown by 3% •  Average yearly in the past 30 years • Used in almost half of all processed foods and cosmetics • One in ten supermarket products contains palm oil

Presentation outline • Palm oil quality and characteristics • Palm oil trade  – Specifications  – Standards • Ethical trading • Conclusion

PALM OIL: QUALITY AND IDENTITY CHARACTERISTICS

Definition of Quality • Conventional  – ability to satisfy stated or implied needs

secur ity,, • Current – implications on security safety, safety, human health, accountability accountabilit y, environment, etc . e.g .g.. Su Su stai tain n ab abll e pr prod odu u cti ction on of pa pall m oil  oi l 

Oil Palm/Palm oil supply chain Smallholders

Plantations

Dealers

Mills Export

Refineries Contract Buyers Consumers

Chemical & physical characteristics To assess: 

Purity or authenticity of the product;



Quality and stability, and



Foreign substances and impurities

Palm Oil Characteristics Identity Characteristics

Quality Characteristics

Chemical

Physical

FAC

SMP

PV

TAG

SFC

E233 & E269

IV

Apparent Density

AnV

Carotene

Viscosity

DOBI

Chlorophyll

Refractive Index

Fe, Cu, P

Tocols

FFA

Sap. Value

OSI

Unsap. Matter 

M&I Contaminants

Components in Palm Oil 

Triacylglycerols



Phospholipids



Monoacylglycerols



Sterols



Diacylglycerols



Pigments



Free fatty acids



Tocols



Minerals

Glyceride Composition 

Triacylglycerols (TAGs) make up about 90 % of the components in oils and fats

 CPO contains about 4.7%

diacylglycerols (DAGs) and 0.1  – 0.3% Monoacylglycerols (MAGs)

Fatty Acids 

TAGs – 3 fatty acids



DAGs – 2 fatty acids



MAGs – 1 fatty acid    1

   2

   3

   d    i   c   a   y    t    t   a    F

   d    i   c   a   y    t    t   a    F

   d    i   c   a   y    t    t   a    F

Glycerol

Saturated  fatty acids

Unsaturated  fatty acids

Fatty Acid Isomers  Isomers are defined as compounds with

the same

molecular formula

but different

molecular structure

 Most common isomers are the cis and trans

isomers

Cis & Trans Fatty Acid Isomers Cis

Trans

H

H

H

H

C

C

C

C

C

H

H

H

H C

H C

C

H

H

Free Fatty Acids (FFAs)  Fatty acids which are not attached to a

glycerol molecule

FFAs are obtained when glycerol is split from the TAG in a reaction termed as hydrolysis  True metabolites of TAGs and thus can occur naturally in trace amounts   Also result from the breakage of the bound fatty acids from MAGs, DAGs or TAGs 

FFA Content  Presence of large quantities indicative of

lipolytic activity in damaged fruits   Average quality crude palm contains less

than 5%  Refined palm oil contains less than 0.1%

FFA versus AV • The acidity of the oil is expressed as FFA content or acid value (AV) • In instances where a blend of oils is involved, uncertainty as to which acid to use for calculation arises and the acid value is used to define the acidity of the sample • To convert %FFA as oleic acid, lauric or palmitic acid to AV, multiply the %FFA by 1.99, 2.81 or 2.19 respectively

Non-glyceride Components  Make up less than 5% of crude

vegetable oils  Most are largely removed or broken

down during refining of vegetable oils

Pigments - Carotenoids  Orange-red colour of CPO due to 500-700

mg/kg carotenoids 

- and - carotene are important provitamin A compounds

 Partially removed from CPO by earth

bleaching, while deodorization breaks them down into colourless or light coloured components

Pigments - Chlorophylls 

Impart greenish colour to crude rapeseed and olive oil



They are photosensitizers which activate photooxidation in oils



Their presence adversely affects oxidative deterioration, hydrogenation and bleachability

Tocopherols & Tocotrienols 

These are natural antioxidants known as Vitamin E



The 3 important forms are tocopherols and tocotrienols



600-1000 mg/kg in CPO

,

- and -

Minerals 

Present only at trace levels in oils



Phosphorus from residual phosphatides



Sodium soaps left from alkali refining



Iron & copper 



Trace nickel in hydrogenated fats

PALM OIL TRADE -STANDARDS -SPECIFICATIONS

 

CPO before mid 1970s Refined palm oil after 1980s

General trading terms • Good Merchantable Quality (GMQ)  – conformation to a minimum standard, suitable for the purpose for which it was bought

• Fair Average Quality (FAQ)  – the average quality of agricultural produce based on samples taken from bulk

Quality specifications • Guarantee of parameters such as  – FFA  – Moisture & Impurities  – IV  – Colour   – SFC

• Others aspects of quality

Quality monitoring of palm oil traded using: •

Standards

•

Specifications

•

Regulations/Legislation

Standards • Set criteria expected in a particular product  – MS, CODEX, ISO

• Unless incorporated into legislation or regulations, they have no legal validity •  A product meeting a standard is at once identifiable as a quality product

Specifications • Stipulate criteria demanded by the buyer of a particular product or consignment • May be above or below those in a standard or may be concerned with criteria not covered in a standard • Variations from a standard are usually the subject of price negotiations for the product

Regulations/Legislation • Define minimum legal requirements governing the sale of a product • May incorporate a standard • Standards and specifications will conform to regulations which must be met before the product may be legally sold

Standards and specifications in trade • Define uniform and accepted descriptive terms to facilitate palm oil trade • Provide tools for the market to create incentives to improve overall oil quality

Palm specifications – MS 814 • Scope – both crude and refined oil • Definition – crude, neutralised, neutralised and bleached, etc . • Identity and quality characteristics • Hygiene, packaging, certification • Sample preparation and testing,

Palm oil trading contracts • PORAM 1 – Domestic Contract for CPO • PORAM 2 – FOB Contract for processed palm oil and palm kernel oil products • PORAM 7 – FOB Contract for CPO and CPKO • FOSFA 81 – CNF/CIF Contract for palm and palm kernel oil products • FOSFA 80 – CNF/CIF Contract for crude palm kernel oil, crude and refined palm olein and palm stearin

Trade association contracts •  Aim to protect quality by stipulating  – Quality on shipment  – Standards of   transportation Storage Handling

Contracts, standards and quality • FOSFA and NIOP contracts  – previous ship cargo must not be from banned list of substances • Efforts to continuously upgrade quality through improvement of standards • Codex Alimentarius executes food safety programme – standards, codes of practice, guidelines, recommended measures

Codex Standard for named vegetable oils – CX-STAN 210 • Essential composition and quality factors  – FAC, slip point • Food additives – antioxidants, flavours, • Contaminants – pesticide residues, Pb &  As (0.1 mg/kg) • Hygiene • Labelling • Methods of analysis

Contract specifications – CPO futures • Moisture & impurities