palm oil
DESCRIPTION
PALM OILTRANSCRIPT
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Palm Oil Quality Standardsfor Trading
Tan Yew Ai
MPOB
PORAM Course on
Operational and Commercial Aspects of Palm Oil Trade
27 & 28 May 2013
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Global importance of palm oil
Most heavily consumed oil in the world
Average world demand has grown by 3%
yearly in the past 30 years
Used in almost half of all processed foods
and cosmetics
One in ten supermarket products containspalm oil
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Presentation outline
Palm oil quality and characteristics
Palm oil trade
Specifications Standards
Ethical trading
Conclusion
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PALM OIL: QUALITY AND
IDENTITY CHARACTERISTICS
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Definition of Quality
Conventional ability to satisfy stated
or implied needs
Current implications on security,
safety, human health, accountability,
environment, etc.
e.g. Sustainable production of palm oil
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Oil Palm/Palm oil supply chain
Consumers
Contract Buyers
Refineries
Mills
Plantations
Dealers
Smallholders
Export
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Chemical & physicalcharacteristics
To assess:
Purity or authenticity of the product; Quality and stability, and
Foreign substances and impurities
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Palm Oil Characteristics
Identity Characteristics QualityCharacteristics
Chemical PhysicalFAC
TAG
IV
Carotene
Chlorophyll
Tocols
Sap. ValueUnsap. Matter
SMP
SFC
Apparent Density
Viscosity
Refractive Index
PV
E233 & E269
AnV
DOBI
Fe, Cu, P
FFA
OSIM & I
Contaminants
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Components in Palm Oil
Triacylglycerols
Monoacylglycerols
Diacylglycerols
Free fatty acids
Phospholipids
Sterols
Pigments
Tocols Minerals
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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)
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Fatty Acids
TAGs 3 fatty acids
DAGs 2 fatty acids
MAGs 1 fatty acid
Glycerol
Fatty
acid
1
Fatty
acid
2
Fatty
acid
3
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Saturatedfatty acids
stable fattyacids withsingle bonds
Unsaturatedfatty acids
atty acids withone or moredouble bonds
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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
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Cis & Trans Fatty AcidIsomers
C C C C C C C C
HH H
H
H
H H
HH
H H
Cis Trans
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Free Fatty Acids (FFAs)
Fatty acids which are not attached to aglycerol molecule
FFAs are obtained when glycerol is split
from the TAG in a reaction termed ashydrolysis
True metabolites of TAGs and thus canoccur naturally in trace amounts
Also result from the breakage of the boundfatty acids from MAGs, DAGs or TAGs
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FFA Content
Presence of large quantities indicative of
lipolytic activity in damaged fruits
Average quality crude palm contains lessthan 5%
Refined palm oil contains less than 0.1%
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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 forcalculation 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
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Non-glyceride Components
Make up less than 5% of crude
vegetable oils
Most are largely removed or brokendown during refining of vegetable oils
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Pigments - Carotenoids
Orange-red colour of CPO due to 500-700mg/kg carotenoids
- and - carotene are important pro-vitamin A compounds
Partially removed from CPO by earthbleaching, while deodorization breaksthem down into colourless or light colouredcomponents
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Pigments - Chlorophylls
Impart greenish colour to crude rapeseed
and olive oil
They are photosensitizers which activatephotooxidation in oils
Their presence adversely affects oxidative
deterioration, hydrogenation andbleachability
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Tocopherols & Tocotrienols
These are natural antioxidants known as
Vitamin E
The 3 important forms are -,
- and g-tocopherols and tocotrienols
600-1000 mg/kg in CPO
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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
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PALM OIL TRADE
-STANDARDS-SPECIFICATIONS
CPO before mid 1970s Refined palm oil after 1980s
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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) theaverage quality of agricultural produce
based on samples taken from bulk
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Quality specifications
Guarantee of parameters such as
FFA
Moisture & Impurities
IV
Colour
SFC
Others aspects of quality
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Quality monitoring of palm oil
traded using:
Standards
Specifications
Regulations/Legislation
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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 onceidentifiable as a quality product
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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 theproduct
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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
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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
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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,
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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 palmkernel oil, crude and refined palm olein and palmstearin
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Trade association contracts
Aim to protect quality by stipulating
Quality on shipment
Standards of transportation
Storage
Handling
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Contracts, standards andquality
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 ofpractice, guidelines, recommended
measures
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Codex Standard for namedvegetable 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
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Contract specifications CPO
futures
Moisture & impurities
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Other quality requirements
Free from solid particles, adulterants,
sediments, foreign matter, added
colouring or flavouring substance
Free from mineral oils, toxic matter, other
oil of vegetable or animal origin
Odourless and bland in taste
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Analyses for quality control
MPOB Test Methods
MS Methods
ISO Methods
BSI Methods
AOCS Recommended Methods
IUPAC Methods
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Ideal Quality Targets
Parameter CPO, max RPO, maxFFA, % 3.5 0.05
M & I, % 0.25 0.02
Colour, 5 inchLovibond
- 2.5 R
PV, meq/kg 1.0 0
Carotene, mg/kg 500 -800 -DOBI 2.5* -
Anisidine value 5 2
* Minimum
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MS CHARACTERISTICS
Identity Quality
Apparent density (50C) FFA
Refractive index (50C) Moisture & Impurities
Saponification value Peroxide valueUnsaponifiable matter Anisidine value
Fatty acid composition Colour
Iodine value DOBI
Slip melting point
Total carotenoids
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PORAM Specifications
Parameters Refined
palm oil
Refined palm
olein
FFA (as % palmitic
acid, max)
0.1 0.1
Moisture & Impurities
(% , max)
0.1 0.1
Melting point (C) 33 - 39 24
Iodine value (min) 50 - 55 56
Colour (5 inch
Lovibond, max)
3 Red 3 Red
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STC specifications
Grading factors CPO (Edible
grade)
Refined Palm
olein
FFA (as % palmitic
acid, max)
5.0 0.1
Moisture & Impurities
(% , max)
0.5 0.1
Melting point (C,
max)
37 24
Iodine value (min) 56
Colour (5 inch
Lovibond, max)
3 Red
CHINA AQSIQ CIRCULARS ON EDIBLE
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CHINA AQSIQ CIRCULARS ON EDIBLEIMPORT
CHINA ENHANCING FOOD SAFETY IN THE
COUNTRY
TWO CIRCULARS WERE ISSUED BY THE
CHINA AQSIQ ON EDIBLE OIL ( July 2012)
AQSIQ CIRCULAR NO. 229: Requirement to
Further Strengthen the Import of Edible Vegetable
Oil Inspection and Supervision
AQSIQ CIRCULAR NO. 80: Requirement for the
Imports of Vegetable Oil in Bulk to China
China: GB 15680 2009
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China: GB 15680-2009
Grading factors Crude
Palm Oil
Refined
Palm Oil
Acid value (mg KOH/kg, max) 10 0.2
Moisture & volatile matter
(% , max)
0.2 0.05
Insoluble impurities (%, max) 0.05 0.05
Melting point (C, max) 33 - 39 33 - 39
Fe (mg/kg, max) 5
Cu (mg/kg, max) 0.4
Peroxide value (meq/kg) 10
Colour (5 inch Lovibond) 3 R 30Y
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Settling commercial disputes
Litigation before courts
Arbitration
Conciliation
Mediations
Commercial settlements
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Reasons for arbitration
Failure to deliver cargo
Dispute over price
Payment Quality
Letter of credit
Cargo readiness Dispute over contract
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Additional analysis for quality
Contaminants and environmental
pollutants (3-MCPD, afflatoxin,
benzopyrene, hydrocarbons, dioxin)
Additives (Antioxidants, anti-foaming
agents)
Pesticide residues
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ETHICAL TRADING
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Ethical Trading
Ethical sourcing
Workplace conditions
Workers welfare
Sustainable agriculture
More than 50 regulations/legislation in
place to ensure sustainable practices inthe oil palm sector
R dt bl S t i bl
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Roundtable on SustainablePalm Oil (RSPO)
Independent global initiative
Promote sustainable palm through co-
operation within the supply chain Established principles and criteria for
certification of sustainable palm oil
M l i S t i bl P l Oil
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Malaysian Sustainable Palm Oil(MSPO)
National interpretation of RSPO
MSPO covers smallholders, plantations
and mills.
Why do we need MSPO?
No Malaysian Standard for Sustainable
Palm Oil Production
As an alternative to RSPO which is costly
As a tool to brand Malaysian palm oil
Th MSPO d ft i t f 4 t
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The MSPO draft consists of 4 parts
MSPO 1: General Principles for
Malaysian Sustainable Palm Oil
MSPO 2: General Principles forIndependent Smallholders
MSPO 3: General Principles for Oil Palm
Plantations and Organized Smallholders
MSPO 4: General Principles for Palm Oil
Mills
MPOBs Codes of Practice
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MPOBs Codes of Practice
Conclusion
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Conclusion
Challenges - the industry needs to overcome
issues related to
changing regulations, new trade obligations
Competitiveness
Mistaken notion on nutritional aspects
Development on peatlands (GHG emission)
Sustainability - environment, economy,social aspects
Invisible trade barriers
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