What is Palm Kernel Oil? Why Buy It?
Palm Kernel Oil (PKO) is a highly versatile and widely used vegetable oil extracted from the kernel of the oil palm fruit (Elaeis guineensis). Unlike palm oil, which is derived from the fleshy mesocarp, Palm Kernel Oil comes from the seed inside the fruit. It is rich in lauric acid, a saturated fat known for its antimicrobial properties, making it a preferred ingredient in the food, cosmetic, and pharmaceutical industries.
One of the key reasons to buy Palm Kernel Oil is its versatility. It serves as an essential raw material for producing margarine, confectionery fats, and non-dairy creamers. Additionally, it is widely used in industrial applications, including soap making, detergents, and biodiesel production. The oil’s high oxidative stability and long shelf life make it a cost-effective option for manufacturers worldwide.
Furthermore, Palm Kernel Oil has gained traction due to its economic advantages. It is more affordable than other lauric oils such as coconut oil, while offering similar functional properties. The growing global demand for plant-based and sustainable ingredients also contributes to its rising popularity in various sectors.
Applications/Uses of Palm Kernel Oil
Palm Kernel Oil finds applications in diverse industries due to its unique chemical composition and functional properties. Some of its primary uses include:
Food Industry
- Used as a key ingredient in processed foods such as biscuits, chocolates, and confectionery.
- Forms the base for non-dairy creamers, coffee whiteners, and margarine.
- Acts as a frying oil for snack foods and fast-food products due to its high heat stability.
Cosmetic and Personal Care Industry
- A common ingredient in soaps, lotions, creams, and shampoos due to its moisturizing and cleansing properties.
- Used in the production of anti-aging and skin-softening products.
Pharmaceutical Industry
- Serves as an excipient in drug formulations.
- Used in the manufacturing of medicated ointments and creams.
Industrial and Chemical Applications
- Essential for the production of detergents and cleaning agents.
- Used in the manufacture of lubricants, emulsifiers, and surfactants.
- Incorporated into biodiesel production as an alternative renewable fuel source.
Animal Feed Industry
- Used in livestock feed formulations as a rich source of energy and essential fatty acids.
Top Producing/Exporting Countries of Palm Kernel Oil
The global production of Palm Kernel Oil is concentrated in tropical regions where oil palm trees thrive. The top producers and exporters of Palm Kernel Oil include:
Indonesia
As the world’s largest producer of Palm Kernel Oil, Indonesia accounts for over 50% of global production. The country has a well-established palm oil industry that supports large-scale kernel crushing operations.
Malaysia
Malaysia follows closely behind Indonesia, contributing significantly to the global Palm Kernel Oil supply. The country’s well-regulated palm oil industry ensures high-quality exports to major international markets.
Thailand
Though a smaller player, Thailand has been expanding its palm oil production, including Palm Kernel Oil, to cater to increasing global demand.
Nigeria
As Africa’s largest producer of Palm Kernel Oil, Nigeria plays a key role in the regional and international markets. The country’s vast oil palm plantations support both local consumption and exports.
Colombia
Colombia has emerged as a leading palm oil producer in South America, with Palm Kernel Oil as a valuable byproduct. The country’s exports are mainly directed towards North America and Europe.
Ecuador
Ecuador is another rising player in the global palm oil industry, exporting Palm Kernel Oil to international markets, particularly in Latin America.
Top Importing Countries of Palm Kernel Oil
Red palm oil, a less processed variant of palm oil, is rich in nutrients such as carotenoids and tocotrienols. It has gained popularity due to its health benefits and widespread use in cooking and food processing. The leading importing countries of red palm oil include:
India
As the world’s largest importer of palm oil, India relies heavily on red palm oil for cooking and food manufacturing.
China
China is another major importer of red palm oil, utilizing it in the food industry, especially in processed and fried foods.
European Union (EU)
The EU, particularly countries like the Netherlands, Spain, and Italy, imports red palm oil for food processing and industrial applications.
Pakistan
Pakistan imports large volumes of palm oil, including red palm oil, for its domestic cooking oil market and food manufacturing sector.
Bangladesh
The country’s growing food industry has driven an increase in red palm oil imports for culinary and industrial use.
United States
Although not a leading importer, the U.S. purchases red palm oil for niche markets, including organic and health-conscious consumers.
Egypt
The food processing industry in Egypt utilizes red palm oil in the production of snacks, margarine, and other consumables.
Turkey
Turkey imports palm oil, including red palm oil, for its confectionery, processed food, and industrial applications.
International Price of Palm Kernel Oil Per Metric Ton
The unit price ($ per kg) of Palm Kernel Oil in the international market depends on a host of different factors including:
- The grade of the produce (usually the more the processing, the higher the price)
- The price of the raw material
- Age of the seeds (this can affect the price)
- Production levels in producing countries
- Economic conditions and the exchange rates between the currencies of the producing and importing countries.
- The quantity ordered (the greater the quantity, the cheaper you can get it per ton)
- Harvest season (it is more costly when it is out of harvest season).
- Weather conditions (some commodities are sensitive to weather conditions).
- Freight & haulage cost
- Percentage of markup
- Import duties, trade tariffs and trade agreements between countries
- Distance from the country of origin
- Technology/Infrastructure available in country of origin
- Relationship between the buyer and seller
That said, as at December 2024, Palm Kernel Oil costs between $900 and $1,300 per metric ton (1,000 kilograms) in the international market (i.e. $0.9/kg to $1.3/kg).
How To Safely Source for Your Palm Kernel Oil Produce
If you find the right export company, buying directly from them can make the purchase process easy and stress-free, when compared with doing the sourcing on your own. That said, there are few things to note when dealing with an export company in Nigeria or Africa. The specific requirements for Nigeria are listed below, but they mostly apply to other African countries:
- The exporting company must be registered with the Corporate Affairs Commission (CAC) to make sure the company is registered and permitted to carry out business operations.
- The export company must also be registered with the Nigerian Export Promotion Council (NEPC).
- The company must possess a domiciliary account to accept international payments.
The company should get all necessary export-related documentation done before the shipment leaves the port of origin. Some of the documents are:
- Certificate of origin
- Bill of lading
- Inspection Certificate (SGS, Cotecna, Bureau Veritas, Intertek, etc)
- Phytosanitary certificate
- Fumigation certificate
Where To Find Reliable Exporters
An important question that still needs to be answered is how to find Palm Kernel Oil exporters in Nigeria. You can use any of the methods listed below:
- Attend trade fairs
- Use search engines like Google, Yahoo, etc.
- Search for agents on Linkedln
- Sign up on trade platforms (e.g. Alibaba, Tradeford, Go4WorldBusiness)
- Neogric – Neogric is one of the reliable Palm Kernel Oil exporters in Nigeria. Neogric is rated among the best in the exporting business in Nigeria. The company is not limited to the exportation of Palm Kernel Oil alone but can export other agricultural produce ranging from perishables to dry seeds.
How To Pay For Your Palm Kernel Oil Produce
You can pay for Palm Kernel Oil using different methods, but three of the popular ways of paying for your agric produce are:
- Bank (T/T) Payment
- Advance Payment
- Letter of Credit (LC)
Bank Payment (T/T)
Bank payment is also known as T/T, “Telegraphic Transfer” or “Telex Transfer” In other words, it is an international wire of funds from the buyer’s bank to the seller’s bank.
A T/T is technically not the same as a wire transfer, which is often done through the SWIFT network. However, when a seller or supplier asks for a T/T payment, a wire transfer is what they are really asking for.
The wire transfer based on the SWIFT system is the most common payment method in international trade. Typically, it takes 1-5 working days to clear, and generally costs between 25 and 50 USD, depending on your agreement with the commercial department in your bank.
Advance Payment
There are sellers that will demand anywhere from 30% to 50% advance payment, and for good reason. If both parties have done deals in the past, sellers can ask for a percentage of the sales (about 30%) before they ship the produce and they can request for the remaining amount after a scanned copy of the Bill of Lading has been sent to the buyer.
It is the safest option for exporters and it also guarantees that they will have some funds to help with sourcing. It is popular among manufacturers on B2B marketplaces like Alibaba and also with commodity traders.
However, advance payment carries considerable risk for the importer (buyer) because the exporter (seller) might not be under as much pressure to ensure quality checks compared with a stricter form of payment. Some might even disappear entirely.
Having said that, advance payment is very useful and is widely used. For instance, the seller might need to secure the commodity in the face of increased competition. It can also be used when the exporter needs some money for sourcing the produce or for processing raw materials.
The most important thing is for both importer and exporter to build mutual trust by having a track record of successful deals with each other or other known companies.
Letter of Credit
Letter of Credit is an agreement generated by the bank of the buyer, guaranteeing payment once certain conditions are met. It is one of the safest types of payment available to both buyer and seller.
Some of the types of Letter of credit are:
- Commercial Letter of Credit,
- Sight Letter of Credit
- Transferrable or Non-Transferable Letter of Credit
- Standby Letter of Credit (SBLC)
- Usance or Deferred Payment Letter of Credit
- Revocable or Irrevocable Letter of Credit
- Confirmed or Unconfirmed Letter of Credit
- Revolving Letter of Credit
- Green Clause Letter of Credit
- Red Clause Letter of Credit
L/Cs are not totally safe (for either buyer or seller) too. For instance, sellers can ship substandard products or those that are different from the ones agreed upon. In this case, the seller gets paid and the buyer receives goods he cannot use.
And speaking of the dangers of L/Cs for the exporter, the conditions in the Letter of credit might be practically impossible to fulfil; if an exporter agrees to such, he might be unable to receive payment. A report stated that of the letters of credit received in the UK, 50% are unworkable while 70% are rejected by the banks for payment.
Shipping & Delivery Terms
When shipping your products, it is important to take note of a few factors:
Order Quantity
For smaller shipments, airfreight is often the preferred option but as the order volume increases, sea freight could become significantly cheaper. Usually when the order is close to a full container load (20 ft), sea freight is used. Although the Covid-19 pandemic caused an increase in cost of delivery of products, prices have stabilised.
Cost of Delivery
When the order is of a large volume, sea freight often turns out cheaper than air freight. In fact, air freight could be up to 6 times more costly than sea freight if the volume is large enough.
Time of Delivery
Sometimes, time will be more important to the buyer than the cost of delivering the product. In this case, air freight will be the logical option (as stated above, the cost will be more). But if you have more time as a buyer, you should strongly consider using sea freight.
Incoterms
Incoterms refer to generally accepted shipping and payments terms. For example, buyers that have representatives in the source country or that can negotiate with the freight company can use the Free of Board (FOB) terms, since it gives them more control and can save them some money.
However, if the shipment is small or the buyer doesn’t have an extensive network to effectively handle payment for freight, insurance and port charges, he will be better off choosing the Cost-Insurance-Freight (CIF) payment option.
Neogric: Top Exporters and Suppliers of Palm Kernel Oil
We invite you to place your order for high-quality Palm Kernel Oil with us at Neogric. We are a trusted global commodity sourcing and trade solution provider with deep expertise in the Palm Kernel Oil industry. Whether you’re a small business or a large corporation, our wide range of products and technology powered, end-to-end supply chain make the export of quality Palm Kernel Oil easy, quick and safe. Whichever region of the world you are, be it Europe, Asia, USA, Canada, Other North/Central American countries, Africa, South America or Oceania, you can reliably order your agricultural produce and we will ensure it is successfully delivered to you, on time.
Why Buy Palm Kernel Oil From Neogric?
Choosing Neogric as your Palm Kernel Oil supplier offers several advantages:
- Quality Assurance: We maintain strict quality control standards, ensuring our Palm Kernel Oil and other products are of the highest quality.
- Wide Product Range: We offer a diverse selection of products, catering to various needs.
- Reliable Supply Chain: Our efficient technology-powered end-to-end supply chain ensures timely delivery of your orders.
- Expertise and Support: Our team of experts provides valuable insights and support, making your purchasing process smooth and hassle-free.
Our Palm Kernel Oil Trade Specifications
- Origin: Nigeria
- Product Name: Palm Kernel Oil
- Physical Specification: Based On Buyer’s Specification
- Quantity: Based On Buyer’s Specification
- MOQ: 10 Metric Tonnes
- Trade Process: Ex Works/FOB/CIF
- Admixture/Impurities: Based On Buyer’s Specification
- Inspection: SGS/Cotecna/Intertek/Bureau Veritas
- Packaging: Based On Buyer’s Specification
- Payment Method: TT (Bank Transfer) or L/C
- Shipping Time: 15 to 25 Days After Confirmation of TT or L/C
- Loading Port: Lagos (Nigeria), Abidjan (Cote D’ivoire) or Tema (Ghana)
Expected Shipping Documents
- Bill of Lading
- Certificate of Origin
- SGS Inspection Certificate
- Phytosanitary Certificate
- Fumigation Certificate
- Commercial Invoice
- Packing List
Place Your Palm Kernel Oil Order With Neogric
Contact us today to place your order for high-quality Palm Kernel Oil. Our team is ready to assist you with all your procurement needs.
- Tel: +2348147860157
- Email: neo@neogric.com
- WhatsApp: Chat With Us
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