The fist process is the reception of FFB (Fresh Fruit Bunch) in a Palm oil mill.
The FFB arrives in a mil in trucks or trailers. These are first weighed over a weighbridge. The trucks then go to the FFB loading ramp, where they are emptied. Most trucks have tipping containers and the trucks can be unloaded fast. In many remote areas the trucks are manually unloaded, and this takes time.
The FFB arriving at the mill has to be checked for quality. Ripe FFB yields very much more oil than under ripe FFB. The major factors that will determine the quantity of oil (Oil extraction Ratio- OER) is the ripeness of the FFB.
The FFB is graded by FFB graders and the suppliers penalised for poor quality of FFB delivered. The penalty can be by allocation of a lower oil extraction ratio or a deduction in the weight of the FFB supplied. The price of FFB is determined by the oil available in the FFB.

FFB Grading

The purpose of FFB grading is to determine the quality of FFB received. This helps to determine the purchase price. If the FFB is from company plantation the grading provides feed back to the plantation on the FFB quality.
A ripe fruit bunch is a bunch that has fruit that are reddish orange in colour and has some fruit that have been detached. When the fruits are ripe they fall off the bunch. Ripe fruit contain the maximum amount of oil.

Definition of Bunches

1. Ripe Bunch – 10 loose fruits
2. Over ripe bunch – A bunch with more than 10 loose fruits
3. Very over ripe –A bunch with more than between 10 to 50 fruits detached.
4. Empty bunch- A bunch more than 90 % fruits detached
5. Spoilt bunch- A bunch 30% fruits damaged by rats.
6. Un-fresh bunch- A bunch that was harvested more than 48 hours, can be determined by stalk condition
7. Under ripe bunch –A bunch with  less than 10 loose fruit
8. Hard bunch – A bunch with no loose fruit
9. Diseased bunch – a deformed bunch
10. Dirty bunch – a bunch that has earth and other dirt

A rating system determines the penalty for each factor.

Pricing of FFB

The pricing of FFB depends on the given oil extraction ratio (OER), current price of crude palm oil(CPO), price of palm kernels(PK), the processing cost(PC), the transport cost of CPO(TCPO), the transport cost of kernels(TPK) and any other cost  Othr (i.e incentives, discounts etc)
All the above factors can be incorporated into a formula that can be solved with a computer or manually.

Price of FFB per Tonne
= OER x Pcpo+KER xPpk - Pcost-OERx(Tcpo)-KERx(Tpk)-Other cost.

For example the price of FFB for the following
CPO price is $ 2000 per Ton CPO------------------------Pcpo
Palm Kernel Price is $ 1000 per Ton palm kernels-----Ppk
Processing Cost = $ 35 per ton FFB---------------------- Pcost
CPO transport cost = $ 50 per ton CPO------------------Tcpo
Kernel transport cost $ 50 per ton Palm Kernels--------Tpk
Other costs = $ 50 per ton FFB---------------------------  Other Cost

Assume OER = 20 %
Assume KER = 5 %

Then the price of FFB per tonne will be

= 0.2 x 2000 + 0.05 x 1000 – 35 – 0.2 x 50 – 0.05x 50 – 50
= $ 352.5

The profitably of processing FFB will depend on the Actual oil and kernel extraction ratios obtained in the mill and the ratios used to calculate the price of FFB purchased.
If the FFB is bought at 20.00 % extraction ratio and if the mill obtains 21.8 % extraction ratio then the difference of 1.8% oil will be profit. If the extraction ratio obtained by the mill is lower than that paid for the purchase, then the mill may loose money.
The profit margin will be very low if a mill that buys FFB and solely depends on processing cost margin to make a profit.

Operating Procedure loading Ramp.

For the operation of the loading ramp the operators must follow the policy of First in First out. This way the retention time of FFB in the loading ramp will be minimised.
The Free Fatty Acid (FFA) increases with time, even one day will cause the FFA to rise significantly. If the FFA in the crude palm oil is more than 5% then generally a lower price is obtained when the oil is sold