Palm Oil Market

Market Study on Palm Oil: Manufacturers to Gain by Targeting Foodservice Operators

Palm Oil Market Segmented By Organic Palm Oil, Conventional Palm Oil Nature in Business to Business Sales of Palm Oil and Business to Consumer Sales of Palm Oil Type

Palm Oil Market Outlook (2022-2032)

Worldwide palm oil consumption is slated to reach a valuation of US$ 59.75 Bn in 2022. Expanding at a value CAGR of 4.2%, the global palm oil market is predicted to top US$ 90.1 Bn by the end of 2032.

Palm Oil Market Size (2022E)

US$ 59.75 Bn

Projected Sales of Palm Oil (2032F)

US$ 90.18 Bn

Value CAGR (2022-2032)

4.2%

Value Share of Top 5 Countries (2021A)

50.7%

As per the detailed palm oil market analysis by Persistence Market Research, by value, palm oil consumption accounts for 25% to 30% share of the global edible oil market. The South Asia palm oil market leads the way and accounts for the highest value share of 39.7% in the global market.

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Companies

  • Olam International
  • Archer Daniels Midland Company
  • Presco PLC
  • Agarwal Industries Pvt. Ltd.
  • Asian Agri
  • Apical Group Ltd.
  • IOI Corp Bhd
  • Oleo-Fats, Incorporated
  • Agropalma Group
  • Golden Agri-Resources Ltd.
  • Sime Darby Oils Liverpool Refinery Ltd.
  • Cargill, Incorporated
  • Liberty Oil Mills Ltd.
  • Adams Group, Inc.

Palm Oil Demand Analysis (2017-2021) Vs Market Estimations (2022-2032)

The global market for palm oil witnessed a CAGR of 3.3% during 2017-2021. Market dynamics have always been driven by the uncertain nature of customers. Consumers with an increasing level of health consciousness and awareness choose pure and naturally extracted edible oils for cooking.

Absence of genetically modified organisms, gluten, and dairy in edible oils such as palm oil is sparking consumer interest around the globe. Consumers prefer edible oils that are free of any additives, preservatives, or chemicals utilized during the extraction or storage process.

In recent years, consumers' understanding of their food and beverage manufacturing has shifted in an unprecedented way. They want to know exactly what they're consuming. Ingredients, processing facilities, crop harvesting procedures, and many other topics pique their interest. Consumers' desire for high-quality products is met by transparency and traceability, which bodes well for palm oil suppliers in the F&B sector.

As per detailed analysis by Persistence Market Research, from 2022 to 2032, the global palm oil industry is expected to expand at a CAGR of 4.2%.

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What’s Driving Sales of Palm Oil across the World?

“Growing Consumption of Convenience Food to Drive Palm Oil Sales”

Consumers have shown preference for confectionery, bakery, and convenience food products in the past few decades. Cakes, pastries, and snacks are garnering more customers all across the world because of their moist texture, mouthfeel, and delicious flavors. Palm oil usage is increasing for the creation of these savory and artisan packaged foods.

Consumption of packaged meals and convenience foods has increased rapidly as a result of the unstable and modern lifestyle. Palm oil is widely utilized to create different aromas and impart a distinct taste to food products with a longer shelf life.

  • Oleo-fats Incorporated, situated in the Philippines, produces a wide range of edible oils for industrial use. To provide consumers with a multitude of options, the company focuses on product development and innovation.

“Emergence of Modern Trade Channels in Developing Countries Increasing Reach of Palm Oil Manufacturers”

The e-Commerce sector in the Middle East and Africa appears to be growing at an exponential rate. In the Middle East, rising per capita income, the Internet, and social media have become the primary drivers of increased online business. The Middle East and Africa has experienced the fastest rise in social media users since 2015, which is helping e-Commerce businesses.

Retail markets in Gulf Cooperation Council (GCC) countries have grown at a rate that is significantly faster than the global average. Consumers in the Middle East and Africa have embraced digital technology, which has benefited many types of businesses, including import-export marketplaces. Following the digital consumer awareness phase, edible oil producers have observed a positive outlook.

  • Big giant companies such as Cargill, Incorporated, Archer Daniels Midland, Adani Wilmar, and Associated British Foods, Inc. have increased their presence in developing regions owing to advanced trade channels.

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How Will the Emerging Indian Economy Contribute to Palm Oil Market Growth?

Increasing demand for edible oils, as a result of rising population and improving economic conditions, is expected to remain the primary growth driver for palm oil suppliers over the coming years.

The Indian palm oil business has a lot more potential since the government has approved 100% foreign direct investment in plantations and has guaranteed considerable financial aid to farmers over the coming years. This change is anticipated to boost domestic palm oil plantations, resulting in higher profit margins and prospects for palm oil manufacturing enterprises.

Increased demand for personal care products, cosmetics, household goods, and packaged foods & beverages has resulted from rapid rise in consumerism. This trend is also presenting attractive potential for palm oil usage in non-food applications.

The Indian government has lowered tariffs to relieve supply limitations and create a stable supply through imports, thereby countering unmet demand. Domestic palm oil production output is likely to rise as a result of investments from overseas private companies and government support. Other government strategies aimed at promoting domestic output and benefiting market growth include easing investment policies and increasing acreage.

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What Factors are Restraining Palm Oil Demand Growth?

“High Price Volatility to Affect Profit Stance of Palm Oil Providers”

Palm oil market growth is determined by a multitude of market dynamics and supply-demand factors. Since palm oil accounts for the largest volume of vegetable oils sold globally, and new laws and regulations are being implemented against the backdrop of rising attention regarding unethical plantation practices, the palm oil sector is anticipated to see high price volatility in crude palm oil rates.

Palm planters are projected to be the most impacted stakeholders since declining export opportunities and rising minimum wage policies will impact their profit margins. These factors are prompting farmers to raise their production costs, affecting the overall outlook of the palm oil market.

“Easy Availability of Palm Oil Substitutes May Hamper Market Progression”

Palm oil dominates the vegetable oils market as it possesses higher saturated fatty acid content. However, soybean, rapeseed, sunflower, and other oils can be used as alternatives for palm oil. Although these liquid oil alternatives do not have the same solid fats like palm oil, hydrogenation of liquid oil can give them the same consistency.

Soybean and rapeseed oils that have been partially or totally hydrogenated have a viscosity that is comparable to palm oil, and are regarded as close alternatives to palm oil. Soybean oil is regarded as a cost-effective substitute for palm oil, which is now hampered by concerns about sustainability.

Country-wise Insights

Which Country is the Leading Market for Palm Oil in South Asia?

“Indonesia a Booming Palm Oil and Palm Products Market”

Indonesia holds the highest market share of the palm oil industry among South Asian countries. The country a major palm oil-producing country in the region, and is a leading exporter of palm oil to other parts of the world.

Currently, the Indonesia palm oil market is valued at US$ 8.35 Bn, and is set to cross US$ 14 Bn by the end of 2032.

Which Country is Propelling the East Asia Market for Palm Oil Products?

“Palm Oil Production Rising in China”

China holds a high share in the East Asia palm oil market. Edible oil consumption patterns in China have evolved over the years with rising urbanization, improving living standards, and concerns about food safety among people.

The China palm oil market is predicted to expand at a value CAGR of 4.2% during 2022-2032.

Category-wise Insights

Which End-use Segment is Offering Promising Opportunities for Market Players?

“Foodservice Sector Accounts for Highest Consumption of Palm Oil”

Palm kernel oil for the skin has been receiving wide attention in recent years.

However, based on end-use segment, the foodservice sector holds the highest market share of palm oil, followed by the retail/household segment. Growing HoReCa sector and increasing household consumption of edible oils due to evolving consumer tastes and preferences are aiding market expansion.

Market value of palm oil in the foodservice sector in 2022 is estimated at US$ 26.1 Bn.

Which Distribution Channel Would Be Most Profitable for Palm Oil Suppliers?

“Market Players Proliferating from B2B Sales of Palm Oil”

Sales growth of palm oil is due to its easy availability through various distribution channels. Sales of palm products through business to business distribution channels are increasing at a CAGR of 3.8% and are anticipated to reach a valuation of US$ 55.26 Bn by 2032. In recent times, online palm oil sales have also been increasing at a rapid pace.

Impact of COVID-19 Crisis

To reduce the danger of COVID-19 infection, food and beverage companies in Europe and the United States closed their corporate offices and encouraged employees to work from home. Many companies have overseas production facilities in China, the Eurozone, and other Asia Pacific countries, where coronavirus interrupted production and supply chains, affecting economies.

The food & beverage industry as a whole is expected to lose roughly 40% of its revenue during the outbreak, according to estimates.

Edible oil is considered to be one of the most widely used commodities across the world. Its broad applicability has boosted demand for a variety of edible oils from numerous industries. The COVID-19 pandemic had a significant influence on the food & beverage industry, affecting commodity sales and production.

However, consumption of edible oil was largely unaffected by the pandemic because it is consumed on a regular basis by people all around the world.

Competitive Landscape

Key manufacturers of palm oil are strategically investing in improving their production capacities to strengthen their presence in the market. Manufacturers are also prioritizing transparency and traceability of the supply chain for ease of handling and to gain customer trust.

  • In 2020, Olam International restructured its business into two new groups. These new business segments are focused on food ingredients and agribusiness.
  • Apical Group Ltd. created a joint venture company in Indonesia to manufacture fatty acids in 2019. PT Apical Kao Chemicals was established as a production base for fat and oil products in Indonesia, a country with ample raw materials for such products.
  • In 2019, IOI Corp Bhd announced plans to buy more palm estates, to expand its position in the global palm oil market. As part of its strategy to strengthen its business, the corporation also stated that it is interested in purchasing plantations near its existing ones in Sabah and Kalimantan, Indonesia.
  • In 2019, Golden Agri-Resources Ltd achieved a new milestone by working with third-party suppliers to help achieve full traceability. The company achieved full traceability in 80 percent of its mills and had a fully traceable palm supply chain by end of 2020.

Palm Oil Industry Report Scope

Attribute

Details

Forecast period

2022-2032

Historical data available for

2017-2021

Market analysis

USD million for value

Key regions covered

  • North America
  • Latin America
  • Europe
  • East Asia
  • South Asia
  • Oceania
  • The Middle East & Africa

Key countries covered

  • U.S.
  • Canada
  • Germany
  • U.K.
  • France
  • Italy
  • Spain
  • Russia
  • China
  • Japan
  • South Korea
  • India
  • Thailand
  • Malaysia
  • Indonesia
  • Australia
  • New Zealand
  • GCC Countries
  • Turkey
  • Northern Africa
  • South Africa

Key market segments covered

  • Nature
  • End Use
  • Distribution Channel
  • Region

Key companies profiled

  • Olam International
  • Archer Daniels Midland Company
  • Presco PLC
  • Agarwal Industries Pvt. Ltd.
  • Asian Agri
  • Apical Group Ltd.
  • IOI Corp Bhd
  • Oleo-Fats, Incorporated
  • Agropalma Group
  • Golden Agri-Resources Ltd.
  • Sime Darby Oils Liverpool Refinery Ltd.
  • Cargill, Incorporated
  • Liberty Oil Mills Ltd.
  • Adams Group, Inc.

Report coverage

  • Market Forecasts
  • Company Share Analysis
  • Competition Intelligence
  • DROT Analysis
  • Market Dynamics and Challenges
  • Strategic Growth Initiatives

Customization & pricing

Available upon request

Palm Oil Industry Research by Category

Palm Oil Market by Nature:

  • Organic Palm Oil
  • Conventional Palm Oil

Palm Oil Market by End Use:

  • Food & Beverage Industry
  • Foodservice
  • Cosmetics & Personal Care
  • Retail/Household

Palm Oil Market by Distribution Channel:

  • Business to Business Sales of Palm Oil
  • Business to Consumer Sales of Palm Oil
    • Hypermarkets/Supermarkets
    • Convenience Stores
    • Specialty Stores
    • Online Retail

Palm Oil Market by Region:

  • North America Palm Oil Market
  • Latin America Palm Oil Market
  • Europe Palm Oil Market
  • East Asia Palm Oil Market
  • South Asia Palm Oil Market
  • Oceania Palm Oil Market
  • Middle East & Africa Palm Oil Market

Media Release

- FAQs -

The global palm oil market is currently valued at US$ 59.75 Bn.

Shifting consumer preference toward free-from GMO, gluten, & cholesterol products, transparency and traceability gaining attention, increase in consumption of convenience food, and international standard certifications supporting edible oil consumption are key trends in the market.

Palm oil sales are anticipated to register a CAGR of 4.2% from 2022 to 2032.

Sale of palm oil is projected to increase at 7.2% CAGR and be valued at close to US$ 3 Bn in Japan by 2032.

Olam International, Cargill, Incorporated, Archer Daniels Midland Company, Oleo-Fats, Incorporated, and Apical Group Ltd., IOI Group are the top 5 palm oil manufacturers, accounting for around 50%-55% market share.

The U.S. palm oil market is anticipated to reach US$ 3.63 Bn by 2032, with India forecasted to reach US$ 10.5 Bn.

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