Palm Oil Market to Cross USD 101.79 Bn in 2033 | 5.1% CAGR
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Palm Oil Market Overview
Published Via 11Press: Palm oil is a widely used vegetable oil that is derived from the fruit of the oil palm tree. It is used in a variety of products, including food, cosmetics, and biofuels. The global palm oil market is driven by the growing demand for vegetable oils, as well as the low cost and high yield of palm oil production. Palm oil production has increased dramatically since the early 2000s due to increasing demand from food manufacturers and consumers around the world. This trend will continue into the foreseeable future as global population growth continues to drive up demand for edible oils and other related products.
The Global Palm Oil Market is expected to grow at a CAGR of roughly 5.1% over the next ten years and will reach USD 101.79 Bn in 2033, from USD 61.90 Bn in 2023.
The Global Palm Oil Market is a dynamic and rapidly changing industry that has experienced rapid growth over the past decade. Palm oil is a vegetable oil derived from the fruit of oil palms, which are native to West Africa and parts of Southeast Asia. It is an important source of edible oil, biofuel, cosmetics, and various other products. As such, this market has seen an expansive increase in production as well as usage across multiple applications. This article provides an overview of the global palm oil market with a focus on its overall size and growth prospects over the next five years.
The market demand for palm oil is driven by the increasing global population and rising incomes, which have led to higher demand for food and consumer goods. The trend toward sustainable and responsible production of palm oil is also driving demand, as consumers become more aware of the environmental and social impacts of palm oil production.
Key Takeaways
- In 2022, 72% of revenue was generated by the Asia-Pacific palm oil market.
- The conventional segment holds a 98% revenue share based on nature in 2022.
- The fractionated palm oil segment held 40% of the 2022 revenue share based on product type.
- According to the end user, the food and beverage segment has a 66% revenue share by 2022.
- The largest market for palm oil is Asia-Pacific, where palm oil is widely used in food and consumer goods. The fastest-growing market is Africa, where palm oil production is increasing rapidly.
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Regional Snapshot
- The Asia Pacific region was the dominant market, with a revenue share exceeding 69% by 2022. This is driven by rising consumption and high demand from end-use industries like food & beverages. High consumption of palm oil can be attributed to changing demographic trends and diverse food applications in India & China.
- Countries such as Indonesia and Malaysia, which are major producers worldwide, rely heavily on palm oil revenues for survival. These revenues enable small and medium-sized business owners in these nations to expand rapidly over the forecast period due to an increase in demand from a larger population base. The region’s product market is expected to expand rapidly during this time due to increased supply from these major producers.
- North America will experience rapid growth due to its unique demographics, changing eating habits and increased demand from the food sector for various delicacies. Furthermore, there is untapped potential that could fuel product sales exponentially in this region.
Drivers
- Growing demand for vegetable oils and consumer goods.
- Low cost and high yield of palm oil production.
- Increasing awareness of sustainable and responsible production practices.
Production of palm oil has seen a massive boost due to rising demand for it as both fuel and nutrition. Global attention is being drawn towards its lack of GMOs, gluten, and dairy in edible fats such as palm oil. Furthermore, the product is expected to expand further due to its health benefits and cost advantage compared with other vegetable oils.
This product is a widely consumed edible and economically viable food item that can be used for various commercial and home uses. The palm oil market is expected to expand despite the presence of numerous companies engaged in research & development activities. Furthermore, projected growth within the food industry should lead to an uptick in palm-related fat consumption.
Restraints
- Environmental and social concerns related to palm oil production.
- Fluctuations in palm oil prices.
Functional foods and drinks with nutrients provide health benefits as well as essential nutritional content. These may include vitamins, minerals, fatty acids, prebiotics, and amino acids. In recent years there has been an uptick in consumer awareness regarding functional products due to increased product development and innovation. Unfortunately, consumption patterns have shifted away from confectionery and bakery to more functional options which has had an adverse impact on palm oil sales and demand in recent years – hindering its growth within the industry.
Opportunities
- Increasing demand for biofuels.
- Growing popularity of palm oil alternatives, such as soybean oil and sunflower oil.
- The introduction of clean label packaging for palm oil products is expected to pique consumer interest and encourage them to opt for these healthy snacks.
Challenges
- Environmental and social concerns related to palm oil production.
- Competition from other vegetable oils.
Sustainability is a major challenge for the palm oil industry. To remain viable, plantations need to be cleaned with fire and then cleared through deforestation – creating an issue for this sector of the industry. Furthermore, COVID-19’s negative effects on health have further compounded, decreasing demand for palm oil products.
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Recent Developments
- In December 2021, the European Union announced plans to phase out the use of palm oil in biofuels by 2030, citing environmental concerns.
- In October 2021, Malaysia, one of the world’s largest producers of palm oil, announced plans to introduce a certification scheme for sustainable palm oil production.
- Cargill, Incorporated, an American private food corporation, was incorporated in Wilmington, Delaware in June 2021. It announced the development of a palm oil refinery in Lampung Indonesia.
- In August 2021, Nestle, the world’s largest food and beverage company, announced plans to invest $100 million in a new sustainable palm oil program.
Market Segmentation
Type
- Crude Palm Oil
- Palm Olein
Application
- Foods
- Bio-Diesel
- Surfactants
- Cosmetics
Key Market Players
- Felda Global Ventures
- IOI
- Sime Darby Berhad
- Musim Mas
- Astra Agro Lestari
- Bumitama Agri
- Genting Group
- KLK
- WILMAR
- RGE Pte
- Indofood Agri Resources
- Golden Agri Resources
- First Resources
- Sampoerna Agro
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Nature Insights
In 2021, the conventional nature segment held a dominant share in the market with over 99% revenue share. This is attributed to its low cost and wide availability. Small and medium-sized oil palm farmers are an important source of income as they can increase production through synthetic chemicals. Low income countries with high populations tend to favor traditional nature segments more.
Organic nature products have only a small share of the market due to production issues and costly products needed for production – such as soil maintenance products. Despite growing awareness, organic products are expected to see rapid growth over the coming years.
Report Scope
| Report Attribute | Details |
| The market size value in 2023 | USD 61.90 Bn |
| Revenue forecast by 2033 | USD 101.79 Bn |
| Growth Rate | CAGR of roughly 5.1% |
| Regions Covered | North America, Europe, Asia Pacific, Latin America, and Middle East & Africa, and Rest of the World |
| Historical Years | 2017-2022 |
| Base Year | 2022 |
| Estimated Year | 2023 |
| Short-Term Projection Year | 2028 |
| Long-Term Projected Year | 2032 |
FAQ.
Palm oil is a vegetable oil that is derived from the fruit of the oil palm tree. It is widely used in a variety of products, including food, cosmetics, and biofuels.
The key drivers of the palm oil market are the growing demand for vegetable oils and consumer goods, the low cost and high yield of palm oil production, and the increasing awareness of sustainable and responsible production practices.
The major regions in the palm oil market are Asia-Pacific, Europe, North America, and Rest of the World. Asia-Pacific is currently the largest market, followed by Europe and North America. Africa is expected to be the fastest-growing market during the forecast period.
The major challenges facing the palm oil market are the environmental and social concerns related to palm oil production, such as deforestation, habitat destruction, and human rights abuses. Fluctuations in palm oil prices are also a challenge for the industry.
The opportunities in the palm oil market include the increasing demand for biofuels, the growing popularity of palm oil alternatives such as soybean oil and sunflower oil, and the potential for sustainable and responsible palm oil production to meet consumer demand.
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