According to aspects of the present invention, metal oxide powder, such as yttria and alumina powder (feed material), is processed using a plasma apparatus. The process generally consists of in-flight heating and melting of the feed material by the plasma apparatus. The plasma apparatus contains a plasma torch with required power supply and cooling systems, a powder feeder, a chamber to collect the powder and a dedusting system. The heated powder forms molten spherical droplets that are rapidly cooled under free fall conditions. The plasma densification process removes some impurity oxides, modifies the morphology of the particle and increases the apparent density of the powder.