|Market Size in 2022
|Market Forecast in 2030
|CAGR (in %)
|USD 67.49 million
|USD 105.32 million
Palm Oil Market
The global palm oil market size was worth around USD 67.49 billion in 2022 and is predicted to grow to around USD 105.32 billion by 2030 with a compound annual growth rate (CAGR) of roughly 5.75% between 2023 and 2030.
Palm oil is derived from the reddish pulp or mesocarp of the oil palm fruit. It is an edible vegetable oil and has extensive applications in the production of beauty products, food items, and biofuel. The high popularity of palm oils is a result of the flavor maintaining and stabilizing attribute of these oils making it highly desirable amongst several food manufacturers. Palm oils naturally appear red due to the high content of beta-carotene. The oil palm tree mainly grows in tropical environments and the consumption of palm oil is significantly higher in developing countries but the application of the oil in other factors apart from food manufacturing has driven the current demand for quality palm oil.
Another advantage of using palm oil is the higher versatility of the product. At room temperature, it can be found in a semi-solid state and is highly resistant to oxidation which improves the overall shelf-life of the product it is used in. At high temperatures, palm oil remains stable and hence can be used to prepare fried food products. However, the market for palm oil is also plagued with several concerns that are expected to restrict the growth trend during the forecast period.
Increasing consumption in the cosmetics industry to drive market growth
The global palm oil market is expected to be driven by the increasing demand for palm oil in the cosmetics industry. It is one of the fastest-growing sectors. The main reason for high application is the moisturizing ability of palm oil along with its texturizing properties. These are two of the main selling points for any cosmetic or personal care products. Some of the most popular derivatives of palm oil in the cosmetic industry include fatty acids and glycerol. These contents impart foaming properties making the derivatives desirable ingredients for shampoo, face wash, and body wash products.
The surge in population and an increasing number of buyers in the cosmetics and personal care sector have led to higher consumption of palm oil. In addition to this, manufacturers of cosmetic items have invested heavily in product line expansion, meaning producing several variants of cosmetics in the same category. The extensive line differs in terms of pricing making the brand reach a broader consumer group. In February 2023, Hindustan Unilever (HUL), the Indian subsidiary of Unilever, undertook massive campaigns and product launches to offset the slump in revenue that it had registered due to reduced sales of winter skincare products. From December 2022 until February 2023, the company’s beauty and personal care division grew by 10% in terms of revenue.
Growing consumption of palm oil for cooking purposes to drive market growth
The global palm oil market demand is projected to take a higher trajectory due to the rise in consumption of palm oil for cooking purposes. The edible oil is economical to produce and does not cost as much as olive oil or other substitutes. This has led to higher demand for palm oil in developing and underdeveloped countries with low per capita income. Additionally, the versatility of the oil in addition to being a rich source of vitamin E and fatty acids, the product meets the nutritional requirements of a larger population section. In September 2023, it was reported that India’s exports of palm oil increased from 1.09 million tons recorded in July 2023 to 1.12 million tons.
Concerns over the impact of palm oil cultivation on the environment to restrict market growth
Since the consumption of palm oil has grown at an exponential rate, there have been several incidents in which the naturally existing tropical forests were converted into oil palm plantations. This has led to irreversible damage to the essential habitat leading to an increase in the number of species falling into the endangered category. Animals such as elephants, rhinoceros, and tigers have lost their living environment. Moreover, burning is one of the most commonly adopted methods of clearing vegetation which ultimately adds to the overall air pollution rate in addition to soil and water contamination. Several international environmental agencies have raised concerns and are calling for the control of palm oil production thus creating barriers to further growth in the palm oil industry.
Increasing measures toward organic palm oil production to create expansion prospects
The high dependency of the commercial world on palm oil has led to several companies investing in research and developing the production of organic palm oil. Studies showcase that when production is controlled and conducted in the right manner, palm oil production can be sustainable and environment-friendly. This includes measures taken against the production of conflict palm oil which deals with massive labor and environmental abuse. Growing environmental awareness among consumers is pushing for higher organic palm oil demand. Government support and favorable policies for organic palm oil have been crucial in the change as they are trying to curb the supply of conflict palm oil.
Increasing investments in palm oil-based biofuel to deliver better results
The players operating in the palm oil industry are expected to benefit from the growing demand for biofuel. Palm oils are important ingredients for these fuel variants. For instance, the recent G20 Summit held in India laid strong emphasis on biofuel production. The participating nations concluded that an initial investment of USD 100 billion would be required to help the biofuel industry reach an optimum momentum in the next 3 years.
Availability of substitutes for palm oil may challenge market growth
There is an extensive market for alternatives to palm oil especially in the food & beverages industry. These substitutes include sunflower oil, olive oil, avocado oil, grapeseed oil, and many more with each product offering certain advantages over palm oil. Some of the options are healthier as well thus catering to the needs of a health-conscious population. The presence and consumption of other oils could pose a challenge against the growth trend in the palm oil sector.
The global palm oil market is segmented based on end-user, nature, product, and region.
Based on end-user, the global market is segmented into biofuel & energy, food & beverages, pharmaceuticals, personal care & cosmetics, and others. In 2022, the highest growth was observed in the food & beverages segment which dominated over 65.1% of the total revenue. Growing demand for food products and the pervasive application of palm oil in manufacturing several types of edible items such as snacks, infant formula, confectionery items, nutrition supplements, and bakery products is likely to drive segmental growth during the projection period. The personal care & cosmetics industry is also significantly dominated by palm oil applications.
Based on nature, the palm oil industry is divided into conventional and organic.
Based on product, the global market is segmented into fractionated palm oil, crude palm oil, kernel oil, RBD oil, and others. The most dominant segment was fractionated palm oil in 2022 providing over 39.5% of the revenue. The economic feasibility and convenient availability are the leading reasons for segmental growth. It has high consumption demand in nations with low per-capita income since it can be easily produced in large quantities. The crude palm oil segment contributed over 25.1% of the total revenue and is expected to become highly popular in the coming years.
|Palm Oil Market
|Market Size in 2022
|USD 67.49 billion
|Market Forecast in 2030
|USD 105.32 billion
|CAGR of 5.75
|Number of Pages
|Key Companies Covered
|Cargill, Wilmar International Limited, Olam International, Sime Darby Plantation, Golden Agri-Resources Ltd. (GAR), United Plantations Berhad, IOI Corporation Berhad, Asian Agri, Musim Mas Group, Kuala Lumpur Kepong Berhad (KLK), PT Astra Agro Lestari Tbk, First Resources Limited, Apical Group Ltd, Société des Palmeraies de l'Ouest, Bunge Limited., and others.
|By End-User, By Nature, By Product, and By Region
|North America, Europe, Asia Pacific (APAC), Latin America, Middle East, and Africa (MEA)
|2017 to 2021
|2023 - 2030
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Asia-Pacific to remain the most significant revenue generator
The global palm oil market will be led by Asia-Pacific during the forecast period. In 2022, it controlled around 71.2% of the global market share and is mainly driven by the expansive production of palm oil in several Asian countries. For instance, Indonesia is the largest producer of palm oil. In 2021, the country produced over 46 million tons of palm oil as per Stockholm Environment Institute. Similarly, other tropical Asian countries produce and consume palm oil in extensive quantities. The other reason for regional growth is the proliferation of regional revenue is the emergence of an internally popular cosmetics and personal care industry, especially from South Korea which has managed to revamp skincare product expectations among consumers. In addition to this, the domestic consumption of palm oil especially in the food and beverages sector is a major growth propeller. Increasing food manufacturing, growing population, rising number of food retailers, and growth in online sales of food products have played an important role in driving palm oil consumption.
The global palm oil market is led by players like:
Palm oil is derived from the reddish pulp or mesocarp of the oil palm fruit.
The global palm oil market is expected to be driven by the increasing demand for palm oil in the cosmetics industry.
According to study, the global palm oil market size was worth around USD 67.49 billion in 2022 and is predicted to grow to around USD 105.32 billion by 2030.
The CAGR value of the palm oil market is expected to be around 5.75% during 2023-2030.
The global palm oil market will be led by Asia-Pacific during the forecast period.
The global palm oil market is led by players like Cargill, Wilmar International Limited, Olam International, Sime Darby Plantation, Golden Agri-Resources Ltd. (GAR), United Plantations Berhad, IOI Corporation Berhad, Asian Agri, Musim Mas Group, Kuala Lumpur Kepong Berhad (KLK), PT Astra Agro Lestari Tbk, First Resources Limited, Apical Group Ltd, Société des Palmeraies de l'Ouest, and Bunge Limited.
The report explores crucial aspects of the palm oil market including a detailed discussion of existing growth factors and restraints while also browsing future growth opportunities and challenges that impact the market.