The global palm oil market was valued at USD 62.94 billion in 2021 and is projected to reach USD 99.41 billion by 2030, registering a CAGR of 5.21% from 2022 to 2030.
The food and beverage industry, as well as the biofuel industry, the energy industry, the personal care and cosmetics industry, and others, are the primary demand drivers for this market.
Both in terms of production and exportation, Indonesia is the world's leading supplier of palm oil. The item is distributed all over the world through the country's exports. The farmers that grow palm oil plants receive assistance from the government as well. A significant portion of the revenue for many low- and medium-volume companies in the region comes from this market. The growth and improvement of the cultivators in the region is largely attributable to the contributions made by the industry.
In a similar vein, the demand for the product coming from the biofuel business has been on the rise. It is put to use in the manufacturing of biofuel, which is then put to use as an environmentally friendly alternative to crude oil in a variety of uses, such as motor oil. The industry of biofuels is still in its infancy; hence its uses are currently somewhat limited.
Because it is so simple to acquire raw materials in the Asia Pacific region, the majority of the world's most important manufacturers are located there. The market is highly competitive as well as comprehensive in nature as a result of the presence of a large number of all-scale players. These players strive to gain a competitive edge over others by increasing their production, improving their distribution networks, improving the quality of their products, and employing a variety of different strategies to compete.
As a result of the participation of numerous participants in the sector's research and development activities, it is anticipated that the industry would eventually achieve development. It is anticipated that there will be an increase in the growth potential available in the market as a result of the growing demand for palm oil as the sector gains ground.
In 2021, the traditional sector held a revenue share of more than 99 percent of the market. This is due to the segment's low cost and widespread availability. Conventional oil palm farms are an essential source of income for small and medium-sized producers since synthetic chemicals can be used to improve productivity. The conventional nature category is more popular in countries with a low per capita income and a large population.
Contemporary to conventional nature sector is organic nature segment, which retains a relatively small market share due to production problems that decrease the product's market availability. It is financially unfeasible and difficult for manufacturers to produce in big amounts because of the tight laws governing production as well as the extremely costly inputs required for production, such as specialist soil maintenance products. Although it is anticipated that awareness of the benefits of organic products will continue to grow at a quick rate, this growth is not expected to be as dramatic.
In 2021, the fractionated palm oil category dominated the market with a revenue share of more than 39%. This is attributable to the product's accessibility and economically reasonable pricing. It is abundantly available and affordable to the public, making it particularly popular in countries with poor incomes. Due to the product's composition, it is easier to manufacture in big quantities.
Following the fractionated palm oil product sector is the Crude Palm Oil (CPO) product segment, which contributed a significant 25 percent to the worldwide revenue due to its primary end-use application in the food & beverage industry. The inclusion of vitamin A in this product segment offers it an advantage over other segments, making its use in edible items more desirable.
Its widespread application in the food industry is anticipated to increase market demand. Additionally, there is substantial demand for CPO from the cosmetics and pharmaceutical industries, as it is a key element in the creation of numerous goods for these industries.
In 2021, food & drinks held a greater than 65 percent sales share of the market. Its significant market share is related to the industry's growing demand for palm oil as raw material and the expanding product line ups that contain palm oil. The increase in the worldwide population has also had an effect on the growth of global products, which has increased product demand on the international market.
Following the food and beverage end-use segments with a negligible variation in revenue share are the personal care and cosmetics and biofuel and energy end-use segments. These are expanding markets that are anticipated to experience rapid expansion in the coming years as a result of technological progress.
Personal care & cosmetics is anticipated to contribute significantly to the worldwide revenue share by the end of the forecast period, despite its sluggish growth rate. In 2021, the sector provided 16 percent of the product market's global revenue share. Diversification of product portfolios and rising demand for organic and sustainable plant-based goods are anticipated to fuel demand for this market segment.
In contrast to the established industry for personal care and cosmetics, biofuel is a nascent business that is projected to reach its full potential in the foreseeable future as technology advances. As soon as non-renewable resource reserves begin to dwindle, biofuel, an environmentally beneficial alternative to conventional fuels, can become a beacon of hope for the energy industry.
The market is split by region into North America, Europe, Asia-Pacific, and LAMEA.
In 2021, the Asia-Pacific region held the largest share of the market, accounting for more than 71% of the total revenue. This can be due to the growing demand from end-use applications industries like the food and beverage industries as well as the expanding consumption that comes from the region's growing population. The large consumption of palm oil in the region can be attributed to several factors, including the rapid increase in population, shifting demographic trends, and the wide variety of food applications in India and China.
This product accounts for a significant portion of the gross national product in countries such as Indonesia and Malaysia, which are among the world's leading producers. The countries that produce palm oil have benefited from the economic development and progress brought about by this business. The revenue generated by the sale of this oil is the only source of income for the smaller and medium-sized companies operating in these countries. An increasing population is predicted to result in higher levels of demand over the course of the forecast period, which should result in the quick expansion of the product market in the region.
It is anticipated that the North American region will soon experience exponential growth as a result of the distinctive demographics of the region, changes in the eating habits of the general populace, and an increase in the demand from the food industry for the production of a variety of exquisite foods. Another factor contributing to the swift expansion of the product's market share in North America is the market's abundance of unrealized potentials, which accounts for the region's rising demand for the product.
|Report Coverage||Revenue Forecast, Competitive Landscape, Growth Factors, Environment & Regulatory Landscape and Trends|
In November 2019, PT. Mahkota Group's subsidiary, PT Berlian Inti Mekar, was responsible for the acquisition of the palm oil mill that was located in South Sumatra. This plant processes around 400 tonnes of palm kernel oil per day while producing CPO-based products such as cooking oil or olein. Other products produced here include olein.