Chapter 11. Oil palm industry growth in Africa: a value chain and smallholders’ study for Ghana 353
The industry provides income for many rural people who work in large and small scale mills, especially
women engaged in small scale palm oil processing. The small-scale sub-sector consists of private
smallholder oil palm cultivators, who largely sell their fruit bunches to small-scale mills or to household
(largely manual) processors. This sub-sector is characterized by low-yielding oil palm varieties, low
productivity of farms and mills, and low quality CPO, which is sold in the village or at small town markets.
The principal product of oil palm is the palm fruit, which is processed to obtain commercial products
including palm oil, PKO and palm kernel cake. Palm oil and PKO have a wide range of applications.
Recently, CPO has emerged as biofuel, an alternative source of energy. The processing of CPO gives rise
to three different products: food products (cooking oil, margarine, etc.); manufactured/industrial goods
(cosmetics, soaps/detergents, etc.); and fuel (biodiesel).
Among the food uses, refined, bleached and deodorized (RBD) olein is used mainly for cooking and
frying oils, shortening and margarine, while RBD stearin is used for the production of shortening
and margarine. RBD palm oil (unfractionated palm oil) is used for producing margarine, shortening,
vegetable ghee, frying fats and ice cream. Several blends have been developed to produce solid fats
with a zero content of trans-fatty acids. In the production of ice cream, milk fats are replaced by a
combination of palm oil and PKO. A blend of palm oil, PKO and other fats also replaces milk fat for the
production of non-dairy creamers or whiteners.
Palm oil is the largest natural source of essential vitamin E, and is high in vitamin K and dietary magnesium. Palm
oil and PKO are also ingredients for the production of specialty fats, which include cocoa butter equivalents
(CBE) and cocoa butter substitutes (CBS) and general purpose coating fats. CBE and CBS have physical
properties that are similar to cocoa butter and are widely used for production of chocolate confectionery.
Non-food uses of palm oil and PKO are for the soap, detergent and cosmetic industries. They are also
used in the chemical industry for plasticizers and coatings. A recent trend is the usage of by-products,
as well as CPO, as energy sources for electricity plants and increasingly as biofuel and biodiesel.
By-products include palm kernel cake, fruit chaff, mesocarp fibre, palm kernel shells, empty fruit
bunches and palm oil mill effluent.
Ghana exports, as well as imports, various kinds of vegetable oils, which are used for both industrial
and domestic purposes. Import volumes have been generally increasing over the years compared with
export volumes; groundnut oil, for instance, has seen substantial decrease in exports over the year.
Table 1. Share of Palm Oil Related Products in Total Demand: Ghana and West AfricaProduct Share of product
in Ghana demand (%)Share of product
in West Africa demand (%)
Laundry Soaps 34.5 32.1
Personal wash 4.6 4.3
Fat & Margarine 8.0 8.8
Refined Cooking Oil (Ind.) 12.3 17.1
Edible Palm Oil 40.6 37.7
Total
Source: Percentages computed from PSI Annual Report (2009).