Palm Oil Market Size 2024-2028

The Palm Oil Market size is projected to increase by USD 57 billion, and the market is estimated to grow at a CAGR of 10.07% between 2023 and 2028. Market growth will be driven by several factors, including heightened consumer awareness of palm oil's health benefits, a rising demand for biofuels, and increased industrial application needs, all of which enhance market prospects. As consumers become more health-conscious, they recognize palm oil's nutritional advantages, driving its consumption in various products. Simultaneously, the biofuel sector's expansion, fueled by environmental concerns and sustainability goals, boosts palm oil demand. Moreover, industrial applications in sectors like cosmetics, food processing, and pharmaceuticals contribute significantly to market growth. These factors indicate a positive trajectory for the market, driven by health awareness, environmental considerations, and diverse industrial applications.

Palm Oil Market Overview

The market shows an Accelerate CAGR during the forecast period.

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Palm Oil Market Dynamics

The Palm Oil market encompasses the production and trade of various palm oil products, including Crude Palm Oil (CPO), RBD Palm Oil, Palm Kernel Oil, and others. Palm oil is derived from the mesocarp of the palm fruit, while palm kernel oil is extracted from the seed. This edible oil is extensively used as cooking oil in the food industry for the production of Instant Noodles, Cereals, Candles, Shampoos, Detergents, and various other consumer goods. Additionally, Palm Oil serves as a feedstock for the production of Biofuel. The demand for sustainable and organic production methods in Palm Oil is on the rise due to concerns regarding deforestation of Tropical Forests and the potential health risks associated with trans fats and mineral oil. Unrefined Palm Oil and Palm Seed Oil are popular choices in the market due to their health benefits. The market for Palm Oil is significant, with applications ranging from Edible Oil to Agrochemicals. The production of Palm Oil also contributes to employment opportunities in the agricultural sector. Our researchers analyzed the data with 2022 as the base year, along with the key trends, and challenges. A holistic analysis of drivers, trends, and challenges will help stakeholders in the value chain refine their marketing strategies to gain a competitive advantage.

Key Market Driver

The increasing demand for biofuels is driving palm oil market growth. Palm oil, derived from the fruit of the palm tree, is a significant player in the global vegetable oil market. The market is driven by the increasing demand for palm oil as a natural product, leading to its use in various industries such as food, cosmetics, and biofuels industry. Crude palm oil (CPO) and palm kernel oil (PKO) are the major segments, accounting for 58.3% and 23.0% of the market revenue share, respectively. Palm oil is used in the production of instant noodles, cereals, candles, shampoos, detergents, and surfactants. In the food industry, it is used as cooking oil and in the production of biodiesel.

Moreover, the demand for sustainable and organic production methods is increasing due to health concerns, including the association of saturated fats, transfats, and cholesterol levels with heart disease. The palm oil industry provides employment opportunities and contributes to the economies of countries such as Indonesia and Malaysia. However, concerns regarding deforestation and the use of agrochemicals, pesticides, and insecticides in palm oil production remain. Thus, the global market is expected to grow during the forecast period.

Significant Market Trends 

New growth avenue for palm oil in biodiesel is a key trend in the market. The application of biofuel as an alternative fuel is increasing. Palm oil, derived from the fruits of the palm tree, is a widely used vegetable oil. Its production provides employment opportunities and is utilized in various industries, including food, cosmetics, and biofuels. Instant noodles, cereals, candles, shampoos, and detergents are some consumer products containing palm oil.

Moreover, crude palm oil and refined, bleached, and deodorized (RBD) palm oil are common forms, as is palm kernel oil. Sustainable and organic production methods are increasingly adopted to mitigate concerns regarding agrochemicals, pesticides, and saturated fat content, which can contribute to heart disease and high cholesterol levels. Biofuel applications include biodiesel production from palm oil, which can reduce reliance on diesel and mineral oil. This is expected to drive the growth of the global market during the forecast period.

Major Market Challenge 

Concerns about deforestation and plant diversity losses are challenging palm oil market growth. Palm oil, derived from the fruits of the palm tree, is a significant vegetable oil used in various industries, including food, cosmetics, and biofuels. The production of palm oil, primarily in Indonesia and Malaysia, accounts for 85% of global supply. Employment opportunities are substantial in this sector. However, challenges such as deforestation, plant diversity loss, and climate change pose threats to sustainable palm oil production. Endangered species, like Orangutans and Sumatran Rhinos, are also impacted.

Moreover, governments respond by promoting sustainable and organic production methods. Crude palm oil, RBD palm oil, and palm kernel oil are key products. Palm oil is utilized in instant noodles, cereals, candles, shampoos, detergents, and biodiesel. Agrochemicals, including pesticides and insecticides, are used in conventional production, raising concerns about saturated fat and cholesterol level. These factors will impede palm oil market growth during the forecast period.

Palm Oil Market Segmentation

By Application 

The market share growth by the edible oil segment will be significant during the forecast period. Palm oil, derived from the fruits of the palm tree, is a widely used edible oils, particularly in Asia. The oil is extracted from both the palm fruits and the kernel. While palm fruit oil is primarily used for cooking and in food products such as instant noodles and cereals, palm kernel oil is utilized in the production of biofuels, biodiesel, and other industrial applications.

The edible oil segment was the largest and was valued at USD 52.10 billion in 2018

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The palm oil industry is significant in terms of employment and production. Crude palm oil and refined, bleached, and deodorized (RBD) palm oil are the main forms of palm oil. Palm kernel oil is another derivative. Palm oil is considered healthier than some hydrogenated oils due to its lower trans fat content. It is also less expensive than other vegetable oils like rapeseed oil, contributing to its increased market share. Therefore, the demand for the market is expected to increase across the world during the forecast period, which will drive the growth of this segment. 

Regional Analysis

APAC is estimated to contribute 71% to the growth of the global market during the forecast period

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Technavio's analysts have provided extensive insight into the market forecasting, detailing the regional trends and drivers influencing the market's trajectory throughout the forecast period. The primary states that contribute to the expansion of the market in the APAC region include China, Australia, Thailand, South Korea, and India. India was one of the principal palm oil importers worldwide. For energy production in power stations, palm oil is an excellent substitute for mineral oil. The most substantial palm oil producers are Indonesia and Malaysia, followed by other tropical nations in South America, APAC, and Africa. Additionally, Malaysia is among the most prominent palm oil exporters to the United Arab Emirates (UAE).

In addition, the demand for palm oil is increasing in the manufacturing of halal-certified processed foods and cosmetics. Palm oil is a cost-effective alternative to partially hydrogenated fat-containing trans-fatty acids. Furthermore, it has several health benefits, such as improving vision, enhancing the immune system, reducing the risk of cancer and heart attacks, and slowing down the aging process. However, the negative impact of palm oil is that it increases environmental pollution. Manufacturing plants that produce palm oil can produce up to 2.5 metric tons of effluent for each metric ton of palm oil. It also results in fuel for air pollution, soil erosion, and climate change in the region. 

Key Companies & Market Insights

Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market forecasting growth and analysis.

• Key Offering - Alami Commodities Sdn Bhd offers palm oil products such as RBD Palm Olein oil.
• Key Offering - Alfa Laval AB offers palm oil such as Milling Palm Oil.
• Key Offering - Archer Daniels Midland Co. offers palm oil such as Hydrogenated Palm Oils, Interesterified Palm Oils, Palm Oils, and Blends.

The palm oil market growth and forecasting report also includes detailed analyses of the competitive landscape of the market and information about Key companies, including: Agarwal Industries P Ltd., Alami Commodities Sdn Bhd, Alfa Laval AB, Archer Daniels Midland Co., Asian Agri, Best Industry Group, Cargill Inc., Charleston Holdings Pte Ltd., Crowe LLP, Godrej and Boyce Manufacturing Co. Ltd., Gujarat Ambuja Exports Ltd., IOI Corp. Berhad, Kuala Lumpur Kepong Berhad, Musim Mas Group, Nisshin OilliO Group Ltd., Oil Palm India Ltd., Patanjali Ayurved Ltd., Sime Darby Plantation Berhad, Sinar Mas, and Univanich Palm Oil Public Co. Ltd.

The palm oil market analysis and report of qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.

Segment Overview

The palm oil market research and growth report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD Billion  " for the period 2024-2028, as well as historical data from 2018 - 2022 for the following segments.

• Application Outlook 
  • Edible oil
  • Surfactants
  • Bio-diesel
  • Others
• Type Outlook 
  • Conventional
  • Organic
• Region Outlook 
  • North America
    • The U.S.
    • Canada
  • Europe
    • U.K.
    • Germany
    • France
    • Rest of Europe
  • APAC
    • China
    • India
  • Middle East & Africa
    • Saudi Arabia
    • South Africa
    • Rest of the Middle East & Africa
  • South America
    • Argentina
    • Brazil
    • Chile

Market Analyst Overview

The market is a significant sector in the global agricultural industry, with production centered in countries such as Indonesia and Malaysia. Palm oil is used in various industries, including food, cosmetics, and biodiesel production. The demand for palm oil is driven by its versatility and affordability. The palm oil industry faces challenges such as environmental concerns, deforestation, and social issues. However, the industry continues to grow, with new technologies and sustainable practices being adopted to address these challenges. The market is segmented by application, including food, cosmetics, and biodiesel. The food segment dominates the market due to the widespread use of palm oil in food products.

In addition, the market landscape depends on various factors such as the Conventional segment, Organic segment, Fractionated palm oil, Organic farming, and Oil Nature. The cosmetics segment is expected to grow at a significant rate due to the increasing demand for natural and sustainable production or personal care products. The biodiesel segment is also gaining traction due to the growing demand for renewable energy sources. The market is influenced by various factors, including population growth, increasing disposable income, and government regulations. Despite the challenges, the market is expected to continue its growth trajectory in the coming years.

What are the Key Data Covered in this Palm Oil Market Research Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the growth of the market between 2024 and 2028
• Precise estimation of the market and its contribution of the market in focus to the parent market
• Accurate predictions about upcoming market  trends and changes in consumer behavior
• Growth of the market across APAC, Middle East and Africa, Europe, North America, and South America
• Thorough analysis of the market’s competitive landscape and detailed information about companies
• Comprehensive analysis of factors that will challenge the growth of market companies

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