PMRREP32448
5 Aug 2025 Food and Beverages
187 Pages
The global palm oil market size is likely to be valued at US$ 67.1 Bn in 2025 and is estimated to reach US$ 90.1 Bn in 2032, growing at a CAGR of 4.5% during the forecast period 2025 – 2032. The palm oil market growth is driven by rising global demand for inexpensive edible oils, escalating biofuel mandates, and growth in processed foods and personal care products. Palm oil has become a ubiquitous component of modern life, powering a wide range of industries, including pharmaceuticals, cosmetics, food, and biofuels.
Palm oil is one of the most essential commodities in the modern world, and it is being included in over 50% of all packaged consumer goods. Environmental concerns have surged as countries, including Malaysia and Indonesia, are extending their palm oil plantations. Together, both countries supply over 85% of the world's palm oil. Several leading companies are focusing on investing in next-generation synthetic alternatives, sustainable certification programs, and deforestation-free supply chains.
Key Industry Highlights
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Global Market Attribute |
Key Insights |
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Palm Oil Market Size (2025E) |
US$ 67.1 Bn |
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Market Value Forecast (2032F) |
US$ 90.1 Bn |
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Projected Growth (CAGR 2025 to 2032) |
4.5% |
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Historical Market Growth (CAGR 2019 to 2024) |
3.7% |
Increasing consumption of palm oil worldwide, especially among large-scale food corporations, seeking cost-effective raw materials to produce agrofuels and ultra-processed products, is anticipated to propel the palm oil market growth. For instance, as per the Food and Agriculture Organization of the United Nations, over the last 30 years, consumption of palm oil has surged from 2% to 41% of total oil production globally.
The palm oil industry is constantly seeking land to broaden cultivation. Latin America, for example, has become a significant area for expansion. At present, the leading palm-producing countries in the region are Colombia, Brazil, Honduras, Ecuador, and Guatemala. Palm oil exports from Latin America mainly go to Mexico, the U.S., and the European Union (EU).
The Inter-American Development Bank provides loans to extend plantations, including some of the oil palm extensions in Latin America. Transnational banks such as Rabobank and HSBC also provide credit for expansion. With support from financial institutions, plantation expansion projects are estimated to rise in various countries globally.
Volatility in the prices of palm oil due to supply chain disruptions and adverse weather conditions may hamper the market through 2032. With high prices, the costs of palm oil-derived products may also rise. For instance, Godrej Consumer Products, based in India, announced in March 2025 that it will raise the prices of its soaps to protect margins due to high palm oil costs. In recent months, the costs of palm oil skyrocketed as key producers, including Malaysia and Indonesia, experienced floods.
Awareness of the negative health effects of palm oil consumption, especially in developing countries, can also hinder the global market. The ‘Roadmap for Replacing Trans-fats with Healthy Edible Oil in India’ project recently found that low-cost palm oil contains high saturated fat, which is linked to heart disease. The project seeks to promote the use of healthier local oils such as sesame, coconut, mustard, and groundnut, which could limit market growth.
Indonesia’s biodiesel mandates, such as the B40 policy, are redirecting millions of tonnes of palm oil from exports to domestic use, tightening global supply and driving up prices. This creates strategic investment opportunities in areas such as commodity trading, forward contracts, and biodiesel production, particularly in regions offering government incentives or rising demand for renewable energy.
At the same time, EU regulations such as the EUDR and the resumption of EU–Malaysia FTA talks are boosting the demand for certified sustainable palm oil (CSPO), opening avenues for investments in traceability technologies, CSPO-compliant plantations, and premium export operations. These trends offer a strong outlook for ESG-aligned and energy-focused investors.
In the global palm oil industry, the food and beverage segment is projected to hold a share of 61.8% in 2025. This is attributed to increased use of palm oil in processed foods, as it serves as an ideal alternative to other expensive vegetable oils. High demand for convenience food such as processed snacks, frozen food, and instant noodles is another key factor boosting the segment.
The cosmetic and personal care segment, on the other hand, is expected to exhibit a decent CAGR through 2032. The industry is a key user of palm oil in makeup, haircare, and skincare formulations. Palm oil derivatives such as glycerin, stearic acid, and palm kernel oil are used in moisturizers, lipsticks, shampoos, and soaps to improve their smoothness, stability, and foaming properties.
By product type, the fractionated segment is projected to generate a market share of 38.6% in 2025. This type of palm oil is gaining traction due to surging industrial use, high demand in specialized food processing, and superior functional properties. Fractionated palm oil is produced by separating palm oil into solid (stearin) and liquid (olein) components through controlled cooling and filtration processes. This separation allows manufacturers to tailor the oil’s melting point, texture, and stability, making it ideal for a wide range of specialized applications. The product's growing popularity is largely attributed to its superior functional properties, including resistance to oxidation, long shelf life, and customizable consistency, traits that are especially valuable in processed food manufacturing. It is widely used in premium confectionery products, such as chocolates, pastries, coatings, and spreads, where precise melting behavior and smooth texture are critical.
Crude palm oil is anticipated to show steady growth through 2032 due to its surging use in biofuel production, especially in the EU and Southeast Asia. It has also gained popularity as a low-cost alternative to sunflower and soybean oils. There is a broad demand for crude palm oil in the pharmaceutical, personal care, and cosmetics industries. Under the Renewable Energy Directive II (RED II), palm oil has been widely used as a primary feedstock for biodiesel and biojet fuel blending; however, many refiners are now shifting toward certified sustainable crude palm oil to meet regulatory and environmental standards. Similarly, in Southeast Asia, especially Indonesia and Malaysia, government-backed biodiesel mandates such as Indonesia’s B35 and B40 programs (requiring biodiesel blends with 35–40% palm content) are significantly boosting domestic consumption of crude palm oil.
Asia Pacific is projected to hold a market share of 59.4% in 2025. Indonesia is considered one of the most prominent producers of palm oil in the region. Also, with 47 million tons of crude palm oil produced in 2023, the country consolidated its position as the world's largest palm oil exporter, making up 54% of worldwide exports. As per studies, over 16.2 million people are employed directly or indirectly by the palm oil industry, which has grown to be a significant contributor to Indonesia's economy, accounting for 4.5% of GDP. Although the domestic market is becoming a highly important consumer, the demand for palm oil products internationally has propelled this surge.
India's palm oil market is anticipated to experience a notable shift in purchasing patterns, even though it has been relying on imports to cater to edible oil demands. For instance, in February 2024, studies revealed that palm oil's percentage of India's yearly imports of edible oils is anticipated to fall below that of soft oils for the first time as refiners turn to less expensive substitutes such as soy and sunflower oils.
In the Middle East and Africa, Nigeria is likely to be a significant palm oil producer. In September 2024, the country signed a Memorandum of Understanding (MoU) with Indonesia to accelerate palm oil production. The MoU focuses on bolstering income for small-scale farmers and improving production techniques. The agreement was signed by the Indonesian Palm Oil Association (IPOA) and the National Palm Produce Association of Nigeria (NPPAN).
Similarly, in February 2025, Raedial Farms Limited announced its plan to cultivate a wide 100,000 hectares of palm oil plantations in Nigeria. This initiative is projected to help bolster the country’s palm oil production, creating several jobs and pushing economic activities in surrounding areas. The expansion project is anticipated to generate a revenue of over US$ 1.5 Bn for Raedial Farms and strengthen its position as a leading agricultural company in the country.
Ghana's market, on the other hand, is anticipated to see the utilization of local energy-efficient technology to transform small-scale and artisanal palm oil processing. Around 60 to 80% of the country’s palm oil is produced by artisanal and small-scale producers, who make up a larger portion of Ghana’s palm oil processing sector.
In North America, the U.S. market is predicted to gain momentum with rising initiatives by key companies to encourage sustainable oil extraction and production. In recent years, palm oil’s relevance in the biofuel sector has increased due to U.S. renewable energy mandates. As part of its Renewable Fuel Standard (RFS) and Low Carbon Fuel Standard (LCFS) initiatives, the U.S. government has incentivized the use of bio-based feedstocks, including palm-based biodiesel and biojet fuels, particularly in states such as California and Washington.
Despite its economic importance, the U.S. market faces growing environmental and regulatory pressures linked to deforestation and unsustainable sourcing practices in major producing countries. Public awareness campaigns and NGO activism have increased consumer scrutiny, prompting many multinational companies operating in the U.S., including food and beauty giants, to commit to 100% RSPO-certified or deforestation-free palm oil sourcing.
As of 2024, over 60% of U.S. palm oil imports are reported to be certified sustainable, and industry leaders are increasingly investing in traceability technologies, blockchain-based sourcing systems, and satellite monitoring to ensure compliance and transparency. Canada, on the other hand, is projected to witness considerable growth through 2032. In 2019, nearly 26% of the country’s total imports of oils and fats were palm oil, according to Oil World.
The global palm oil market houses several multinational companies that make it highly competitive. Key players are anticipated to engage in strategic mergers and acquisitions with cultivators to ensure an uninterrupted supply of raw materials. Volatility in raw material prices, however, may adversely affect profitability.
To gain an edge over rivals, leading players are set to adopt a variety of strategies, including capacity expansion and research and development. For instance, through its subsidiary PT Berlian Inti Mekar, the PT. Mahkota Group purchased a palm oil factory in South Sumatra in November 2019. About 400 tons of palm kernel oil are processed daily at this plant, which also manufactures crude palm oil (CPO)-based products such as cooking oil and olein.
The palm oil market is set to reach US$ 67.1 Bn in 2025.
The palm oil market is expected to grow to US$ 90.1 Bn, indicating a steady upward trend.
Key trends include rising demand in the food and biofuel sectors, increased focus on sustainable and ethical sourcing, expansion of plantations in Southeast Asia, and widespread use in consumer packaged goods.
The palm oil market is projected to grow at a CAGR of 4.5% from 2025 to 2032.
Key players include Olam International, Archer Daniels Midland Company, Presco PLC, Agarwal Industries Pvt. Ltd., and DAO.
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Report Attribute |
Details |
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Historical Data/Actuals |
2019 - 2024 |
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Forecast Period |
2025 - 2032 |
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Market Analysis |
Value: US$ Bn |
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Geographical Coverage |
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Segmental Coverage |
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Competitive Analysis |
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Report Highlights |
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Customization and Pricing |
Available upon request |
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