Palm Oil Market Size, Share & Trends Analysis Report By Nature (Organic, Conventional), By Product (CPO, RBD Palm Oil, Palm Kernel Oil, Fractionated Palm Oil), By Application (Edible Oil, Bio-Diesel, Lubricants, Shampoos, Soaps and Cosmetics, Others), By End-use (Food Industry, Personal Care and Cosmetics Industry, Biofuel Industry, Pharmaceutical Industry, Others) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2023-2032

Market Overview

The global palm oil market size was valued at USD 70.27 billion in 2023 and is projected to reach USD 108.21 billion by 2032, registering a CAGR of 5.1% from 2023 to 2032.

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.

Palm oil, a kind of edible vegetable oil, is produced from the mesocarp of oil palm fruits, which are indigenous to West Africa. It is the highest-yielding vegetable oil crop in the world, producing 5–10 times more per hectare than other key vegetable oil crops. It is low in fat, easy to digest, and high in carotenoids and vitamin A, all of which have several nutritional benefits.

The acceptance and use of edible oils have grown over the past few years, both domestically and internationally. This acceptance and development are connected to several health advantages, including increased vitality, better eye vision, a reduction in premature aging, a boost to the immune system, and a decreased risk of cancer and heart disease. As a result of consumers' rising awareness of these health benefits, the market is anticipated to grow profitably.

Market Dynamics

Global Palm Oil Market Drivers

Increasing demand from the biofuel industry & reason for the development of a region

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 products 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.

Global Palm Oil Market Restraints

In Sufficient workforce

Due to the interruption caused by the pandemic, there is a limitation on labor and labor in the palm oil output. Because there were fewer workers, production could have been more efficient, increasing production costs and narrowing profit margins.

Demand suddenly increased due to government policies encouraging the blending of palm oil into diesel, which also caused issues in the supply chain. As a result, the sector is now experiencing restraints compared to expectations for rapid growth.

Global Palm Oil Market Opportunity

Highly competitive market and development by many players

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.

Technology Adoption and Awareness

Additionally, in the forecast period of 2022 to 2029, the market players will have lucrative opportunities due to the adoption of new technologies, such as cutting-edge satellite-based technology that aids in monitoring deforestation and significant initiatives taken by governments of various countries, such as Denmark and other western European nations. The increased consumer awareness of palm oil's beneficial health effects will also contribute to the palm oil market's future expansion.

Regional Analysis

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 potential, which accounts for the region's rising demand for the product.

Segmental Analysis

In 2021, the traditional sector held a revenue share of more than 99% 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% 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% 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 lineups 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 in 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% 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.

Impact of covid-19

Covid-19 had some profound adverse impacts on the global advanced ceramics market.

COVID-19 spread across the world from China, making the whole world stand still and to a complete lockdown situation. Covid-19 is an infectious disease that was caused by a newly discovered coronavirus. During the time, the fatality rate among the population above 40 was also high globally. The disease causes severe illness for people suffering from medical conditions like diabetes, cardiovascular disease, chronic respiratory disease, etc.

Considering the situation during that time, it was declared a pandemic which led to numerous countries, including the major economies like China, the United States, India, and others, implementing lockdowns which adversely affected the global economy.

In the first two quarters of 2020, the economic and industrial operations temporarily halted. Almost every manufacturing unit where advanced ceramics is used, such as electrical and electronics, transportation, industrial, chemical, and other End-user Industries (except medical), reduced their manufacturing capacities due to the lack of workers. The lockdown implemented put a halt to global supply chains. This resulted in repercussions in terms of both production and demand for advanced ceramics.

Market Recovery Timeline and Challenges

With time the lockdowns were uplifted, and relaxation was made to the public. Gradually, the economy picked up the pace and started its operations, bringing the demand in the global advanced ceramics market and increasing among various industries. As the situation improved during the initial months of 2021, the economies also strengthened their fiscal policies and initiated their development process; the end-user industries began their activities, bringing the overall ceramics market back on track.

Recent Developments

• In November 2022, ADM Added New North American Microbiology Laboratory to Research and Quality Capabilities.
• In December 2022, Sime Darby Plantation will provide a clear roadmap for achieving net-zero status by 2050.
• In November 2022, Sime Darby Plantation, Intan Hebat Baru, and Wild Asia were Raising the Standards for Small Palm Oil Producers.