Palm Oil - Basic Information

When we look into the reports/news/website of palm oil plantation companies, we come across of terms like Fresh Fruit Bunch (FFB), Crude Palm Oil (CPO) and Palm Kernel (PK). They will even produce their monthly production statement for FFB, CPO and PK from the example below taken from IOI Corp website.

                                            Source: IOI Corp website

FFB, CPO and PK

                                          Source: FAO Documents

The photos above are self-explanatory of the terms FFB, CPO and PK. Basically, Palm Oil will be extracted from the mesocarp (pulp) while Palm Kernel oil will be extracted from the kernel. The difference between both types of oil is that Palm oil normally used as cooking oil, while, Palm kernel oil mainly used for soap manufacturing. The prices for both Palm Oil and Palm Kernel Oil are different as well, though they have direct correlation.

                                           Source: MPOB website

The point to note is that some companies do directly sell part of the FFB produced to third party instead of processing it themselves.

                                            Source: TDM AR2008

Hope this is informative for the readers.