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Palm Kernel Oil (PKO), is derived from the kennel of the palm fruit and so it is a co-product of palm oil production . But PKO is the minor product and in world terms, about 81/2 tonnes PO is produced for every tonne of PKO. This oil together with coconut oil compose the lauric group, so named because their fatty acid composition is based predominantly on lauric acid.

PKO has a slip melting point of 26-28 C, iodine value 16-19 and SFC (20C) about 40%. Its fatty acid composition consists mainly of lauric acid (C12:0) about 48%, myristic acid (C14:0) 16% and oleic acid (C18:0) 15%, with total saturates of about 82%. Crude PKO is usually traded on the basis of FFA 5% max., moisture and impurities 1% max. and IV 19 max. on loading. PKO is very similar to coconut oil and has very similar uses, primarily in ice cream, sugar confectionery, substitute chocolate, special bakery margarines oleochemicals and soap. A proportion of lauric oil is necessary in soap formulations, to confer good lathering properties. PKO is also fractionated into PK stearin (used as CBS) and PK olein.