1) In a small saucepan, heat the oil or lard in it.
2) Add the annatto seeds.
3) Cook over simmering heat, mixing many a times at intervals, until the fat changes to a rich orange color.
4) Take away from heat as soon as the color starts to lighten.
5) Strain into jar.
6) Cover the sauce pan with lid and chill.
7) The fat will stay for months.
8) Use it as required for coloring and flavoring dishes.