Palm Oil Market Size, Share & Trends Analysis Report By Nature (Organic, Conventional), By Product (Crude Palm Oil, RBD Palm Oil), By End-use (Food & Beverage, Pharmaceuticals), By Region, And Segment Forecasts, 2023 - 2030

Report Overview

The global palm oil market size was valued at USD 67.3 billion in 2022 and is expected to expand at a compound annual growth rate (CAGR) of 5.1% from 2023 to 2030. The market is driven by growing demand from the food, beverage, biofuel, energy, personal care, and cosmetics industries. Major manufacturers are primarily located in the Asia Pacific region due to the ease of availability of raw materials. The market is highly competitive as well as comprehensive in nature owing to the presence of a large number of all-scale players who try to gain a competitive edge over others with their high quantity & quality production methods, superior distribution networks, product innovation, and various other competitive strategies.

Indonesia is the largest palm oil producer as well as exporter globally. According to the Cabinet Secretariat of Indonesia, in 2018, the country’s palm oil exports amounted to USD 17.89 billion and were worth 3.5% of the country’s GDP. Furthermore, Indonesia remains aggressive in exporting palm oil to all regions around the world. The Indonesian government also supports the cultivators of palm oil plants. It is a major source of income for many small and medium-scale producers in the region. The industry is majorly responsible for the development and economic progress of cultivators in the region.

Similarly, the product has witnessed an increasing demand from the biofuel industry. It is used in the production of biofuel, which is further used as a sustainable alternative to crude oil in many applications such as engine oil. Currently, the biofuel industry is a budding industry with a limited scope of applications. The biofuel industry is expected to undergo promising developments as many players are involved in research and development activities. As the industry gains ground, the demand for palm oil is expected to increase and drive the product market.

Nature Insights

The conventional segment dominated the palm oil industry with a revenue share of more than 99% in 2022. This is attributable to the low price and easy availability of the segment. Conventional oil palm farms are a crucial source of income for small and medium size cultivators as they can increase production with the help of synthetic chemicals. The conventional nature segment is more popular in low-income countries with high populations. 

On the other hand, the organic nature segment holds a very small share of the market due to difficulties in production, which reduce the availability of the product in the market. The stringent regulations for production as well as their costly nature limit their reach to potential consumers. The troubles with pricing are likely to continue as production requirements such as specialized soil maintenance make it financially infeasible and difficult for the manufacturers to produce in large quantities. However, consumers show a willingness to purchase high-quality products at a premium price. The increasing awareness about the benefits of organic products is anticipated to create promising prospects for growth.  

Product Insights

Fractionated palm oil segment dominated the market with a revenue share of over 39% in 2022. This is attributable to the ease of availability of the product and economically feasible prices. It is very popular in low-income countries as it is abundantly available as well as affordable for the masses. The constituent nature of the product makes it more viable to manufacture it in large quantities.

Another major product segment following fractionated palm oil is the crude palm oil segment, which contributed a substantial share of 25% to the global revenue, owing to its major end-use application in the food & beverage industry. The presence of vitamin A gives this product segment an edge over the other segments, making its utilization in edible products more desirable. 

Its extensive use in the food industry is expected to drive market demand. There is also significant demand for crude palm oil from cosmetics and pharmaceuticals end-use industries. It is a crucial ingredient for the production of many products in these industries.

End-use Insights

The food & beverages sector dominated the palm oil industry with a revenue share of more than 65% in 2022. Its high share is attributable to the increasing usage of the product end-use applications in the industry and increasing product portfolios that demand palm oil as a raw material. The rise in the global population has also affected global product growth, boosting demand in the global market.

With a scanty difference between their revenue share, following the food and beverage end-use segment are the personal care & cosmetics and biofuel & energy segments. These are developing segments and are expected to attain prompt growth in the coming years, as the advancement of technologies is likely to spur new avenues of growth.

The personal care & cosmetics end-use segment has a moderate growth rate and is expected to contribute significantly to the global revenue share by the end of the forecast period. In 2022, the segment contributed a 16% revenue share in the product market. The diversification in the product portfolios and increasing demand for organic and sustainable products that are plant-based are factors expected to drive the demand from this segment.

Contrary to the personal care & cosmetics segment which is an established market, biofuel is a budding market that is expected to gain its full potential during the forecast period, as technological advancements take shape. In the near future, as the deposits for non-renewable resources decline, biofuel, which is an environment-friendly alternative to conventional fuels, can become a ray of hope for the energy industry.

Regional Insights

Asia Pacific region dominated the market with a revenue share of over 71% in 2022. This is attributed to the growing consumption by the rising population of the region as well as high demand from end-use application industries such as the food & beverage industry. The rapid increase in population, changing demographic trends, and diverse food applications in India and China are accountable for the high consumption of palm oil in the region.

This product is a major source of income for countries like Indonesia and Malaysia, which are large producers globally. Income from this business helps the countries producing palm oil to develop and advance. Small and medium players in these countries are solely dependent on the revenue from this oil for their livelihood. Over the forecast period, the product market in the region is expected to grow rapidly, owing to increased demand from the growing population.

The North American region is anticipated to exhibit robust growth in the near future, due to the distinguished demography of the region. The growth is also aided by a change in the eating habits of the masses and the increasing demand from the food industry for the adoption of global delicacies. The North American market has significant untapped potential currently, which is another reason for the rapid growth of the product in the region.

Key Companies & Market Share Insights

The market is consolidated and highly competitive. The prices of the product in the international market are highly volatile and are affected by international crude oil prices. The market has the presence of multinational companies such as ADM and Wilmar International Ltd., which aid the market to be more competitive. Major players have acquired plantations or contracted cultivators to ensure a constant supply of raw materials.  Volatility in the prices of the raw material adversely affects the profitability of the product. 

The product manufacturers are engaged in continuous R&D activities, capacity expansions, mergers & acquisitions, and other strategies to gain a competitive advantage over others. For example, in November 2019, PT. Mahkota Group acquired a palm oil mill in South Sumatra, through a subsidiary, PT Berlian Inti Mekar. This plant produces crude palm oil-based products such as cooking oil or olein and processes about 400 tons of palm kernel oil per day. Some prominent players in the global palm oil market include:

• ADM

• Wilmar International Ltd.

• Sime Darby Plantation Berhad

• IOI Corporation Berhad

• Kuala Lumpur Kepong Berhad

• United Plantations Berhad

• Kulim (Malaysia) Berhad

• IJM Corporation Berhad

• PT Sampoerna Agro, Tbk

• Univanich Palm Oil Public Company Ltd.

• PT. Bakrie Sumatera Plantations tbk

• Asian Agri

Palm Oil Market Report Scope

Global Palm Oil Market Segmentation

This report forecasts volume & revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2018 to 2030. For the purpose of this study, Grand View Research has segmented the global palm oil market report based on nature, product, end-use, and region:

• Nature Outlook (Volume, Kiloton; Revenue, USD Million, 2018 - 2030)

  • Organic

  • Conventional

• Product Outlook (Volume, Kiloton; Revenue, USD Million, 2018 - 2030)

  • Crude Palm Oil

  • RBD Palm Oil

  • Palm Kernel Oil

  • Fractionated Palm Oil

• End-Use Outlook (Volume, Kiloton; Revenue, USD Million, 2018 - 2030)

  • Food & Beverage

  • Personal Care & Cosmetics

  • Biofuel & Energy

  • Pharmaceuticals

  • Others

• Regional Outlook (Volume, Kiloton; Revenue, USD Million, 2018 - 2030)

  • North America

    • U.S.

    • Mexico

    • Canada

  • Europe

    • Germany

    • U.K.

    • France

    • Spain

    • Italy

    • Russia

  • Asia Pacific

    • China

    • India

    • Japan

    • South Korea

    • Malaysia

    • Indonesia

  • Central & South America

    • Brazil

    • Argentina

    • Colombia

  • Middle East & Africa

    • South Africa

    • Saudi Arabia