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What goes wrong

Dreaded orange spots

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Small orange or brown spots appearing on a cured bar, months after it was made, with a smell of old crayons.

Rancidity, with a name

The craft's name for oxidative rancidity in the free oils of a bar.

The spots are where it has started, and the smell arrives with or shortly after them.

A spotted bar is not dangerous and it is not sellable, and it is unrecoverable.

What causes it

Old or oxidizing oils. The main cause. An oil already partway through its own shelf life goes on from there in the bar.

A high superfat, which leaves more free oil to oxidize.

Unsaturated oils, which are the ones that go off: sunflower, soy, rice bran, hemp and any high linoleic oil.

Metal ions, which catalyze it, which is one reason distilled water and non-reactive equipment matter.

Heat, light and humidity in storage.

It spreads

Not between bars, but through a bar, and a batch made from a bad lot of oil will develop it across every bar at roughly the same time.

Which means DOS in one bar is a batch problem rather than a single unit, and the right response is to check the batch and the retained bars rather than to replace the one.

Preventing it

Fresh oils, bought in quantities you use within months, stored cool and dark and sealed.

Ask for the pressing date rather than the best-before.

A moderate superfat rather than a generous one.

Distilled water and a chelator in the recipe, which several makers use for exactly this reason.

Cool, dry, dark storage for cured stock.

And keep a retained bar from every batch, so you find out in your own cupboard rather than in a customer's.

References

No published source. This page is written from practice rather than from published guidance. No extension service or agency publishes on this question for soap, so nothing here is cited, and it should be weighed as experience and not as a standard.
Written from the federal regulation and FDA and CPSC guidance named on each page, not from a laboratory or a legal practice. Whether a particular product and a particular label make exempt soap, a cosmetic or a drug is a determination about your product, and this is not that determination.