Palm Oil Market size is set to grow by USD 57 billion from 2024-2028, Increasing consumer awareness regarding health benefits of palm oil to boost the market growth, Technavio

NEW YORK, July 5, 2024 /PRNewswire/ -- The global palm oil market  size is estimated to grow by USD 57 billion from 2024-2028, according to Technavio. The market is estimated to grow at a CAGR of  10.07%  during the forecast period.  Increasing consumer awareness regarding health benefits of palm oil is driving market growth, with a trend towards new growth avenue for palm oil in biodiesel. However, concerns about deforestation and plant diversity losses  poses a challenge. Key market players include 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..

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Key Market Trends Fueling Growth

Palm oil is a significant contributor to the biodiesel market, accounting for approximately 10% of global production. This vegetable oil, derived from the fruit of the oil palm tree, is an efficient and cost-effective first-generation feedstock. Compared to other oilseeds, oil palm yields more oil per hectare annually, making it an attractive choice for biodiesel production. With around 70 million tons of palm oil produced annually, its adoption in the biodiesel industry is on the rise. As the world shifts towards more sustainable and cleaner fuel options, the demand for biodiesel is increasing. Palm oil's high yield and cost-effectiveness position it well to meet this demand, driving growth in the palm oil market during the forecast period. 

Palm oil, derived from palm fruits, is a popular vegetable oil used in various industries. It's a key ingredient in instant noodles, cereals, candles, shampoos, and detergents. Crude palm oil and RBD (refined, bleached, and deodorized) palm oil are the main types, with palm kernel oil used for biofuel production. Sustainable and organic production methods are trending to address concerns over agrochemicals, pesticides, and deforestation. Palm oil's saturated fat content and potential link to heart disease have raised health concerns. Biofuels, such as biodiesel, are growing segments. Unrefined palm oil and fractionated palm oil have their uses, with the latter in edible oil and biofuels. Imports of palm oil, including from countries like Indonesia and Malaysia, are significant. The market includes both conventional and organic segments. Agrochemicals, pesticides, insecticides, and surfactants are used in palm oil production. Mesocarp, the edible part of the fruit, is extracted for oil. Sustainable farming practices and the use of feedstock like soybean oil are important for reducing the environmental impact. Mineral oil and transfats are alternatives, but their production and use have drawbacks. Rapeseed oil is a competitor, but palm oil's versatility gives it a competitive edge. 

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Market Challenges

• The palm oil market faces significant challenges, including deforestation and loss of plant diversity, scarcity of natural resources, and climate change. These issues pose threats to the global food production system. In response, Indonesia and Malaysia, which account for 85% of the world's palm oil production, have prioritized sustainable and organic farming methods. Additionally, efforts are being made to protect endangered species, such as the Orangutan and Sumatran Rhino, from palm oil tree plantations. Regulations like the Forest Policy of 1988 and Forest Conservation Act of 1980 restrict cultivation and marketing in certain areas, limiting palm oil market expansion.
• The palm oil market faces several challenges in both the conventional and organic segments. In conventional production, the use of agrochemicals, pesticides, and insecticides raises concerns over sustainability and health issues like saturated fat and cholesterol levels. In the organic segment, the focus is on sustainable farming practices, but challenges include higher production costs and smaller yields. Biodiesel and diesel industries utilize palm oil as feedstock, but competition from other sources like soybean and rapeseed oil, as well as biofuels like bioethanol, can impact market share. The health concerns surrounding saturated and trans fats in palm oil also impact the edible oil market. Deforestation is a significant challenge due to the conversion of tropical forests into palm oil plantations. Consumer goods and industries using palm oil as an ingredient or feedstock face reputational risks due to these sustainability concerns. The organic farming movement offers a solution, but requires significant investment and adherence to strict regulations. Fractionated palm oil, unrefined palm oil, and palm kernel oil are key products, with applications in surfactants, lubricants, and biofuels. The market for unrefined palm oil is growing due to its health benefits, but its higher price compared to refined palm oil is a challenge. White palm oil and mineral oil are also used in various industries. In summary, the palm oil market faces challenges from health concerns, competition from other oils, sustainability issues, and reputational risks. Organic farming and sustainable practices offer solutions, but require significant investment and regulatory compliance.

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Segment Overview 

This palm oil market report extensively covers market segmentation by

1. Application 
• 1.1 Edible oil
• 1.2 Surfactants
• 1.3 Bio-diesel
• 1.4 Others
2. Type 
• 2.1 Conventional
• 2.2 Organic
3. Geography 
• 3.1 APAC
• 3.2 Middle East and Africa
• 3.3 Europe
• 3.4 North America
• 3.5 South America

1.1 Edible oil-  Palm oil is a widely used edible oil, particularly in Asian markets. Two primary forms exist: palm fruit oil and palm kernel oil. Palm fruit oil is primarily used for cooking, while packaging foods often includes palm oil. Compared to hydrogenated oils, palm oil is considered healthier. Its affordability compared to other vegetable oils also boosts its market share. With fewer harmful trans fats, food processors benefit from using it. The global demand for palm oil is increasing in various regions, driving growth in this sector during the forecast period.

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Research Analysis

Palm oil, derived from the fruits of the palm tree, is a versatile vegetable oil widely used in food, cosmetics, and industrial sectors. It is rich in nutrients and employed in the production of instant noodles, cereals, candles, shampoos, detergents, and biofuels. Crude palm oil and RBD (refined, bleached, and deodorized) palm oil are the primary forms, while palm kernel oil is extracted from the seeds. Sustainable and organic production methods are increasingly adopted to mitigate concerns over deforestation and agrochemical use in tropical forests. Unrefined palm oil, palm seed oil, and mineral oil are alternative options. However, high trans-fat content and links to heart disease remain concerns. Mesocarp, the edible part of the fruit, is used in cooking, while rapeseed oil is a common alternative. Agrochemicals are used in palm oil production, but efforts are made to minimize their impact on the environment. Palm oil feedstock is a significant commodity in the global market.

Market Research Overview

Palm oil is derived from the fruits of the palm tree, which is native to the tropical regions of Africa. It is a versatile vegetable oil that is widely used in various industries, including food, cosmetics, and biofuels. Palm oil is rich in saturated fats and is commonly used in the production of instant noodles, cereals, candles, shampoos, detergents, and biodiesel. The demand for palm oil is high due to its affordability and versatility. However, the production of palm oil has been linked to deforestation, particularly in tropical regions where palm plantations are expanding. Sustainable and organic production methods are being adopted to address these concerns. The global palm oil market can be segmented into crude palm oil, refined, bleached, and deodorized (RBD) palm oil, palm kernel oil, fractionated palm oil, and biofuels. Palm oil is used as a feedstock in the production of surfactants, lubricants, and other industrial products. The conventional segment and organic segment of the palm oil market are growing at different rates due to increasing consumer awareness and demand for sustainable and healthier alternatives. The use of palm oil in the biofuel industry is also increasing due to its high energy density and low carbon footprint compared to mineral oil. However, the high saturated fat and trans fat content in palm oil has been linked to heart disease and other health concerns. The palm oil market is expected to continue growing due to its wide range of applications and the increasing demand for affordable vegetable oils. Imports of palm oil and its derivatives are significant in many countries, particularly in Europe and North America. The palm oil market is a complex and dynamic industry that involves various stakeholders, including producers, processors, traders, consumers, and governments. The use of agrochemicals, including pesticides and insecticides, in palm oil production is a concern for environmental and health advocates. The palm oil industry is also facing competition from other edible oils, such as rapeseed oil, soybean oil, and kernel oil. The future of the palm oil industry depends on its ability to adapt to changing market conditions, consumer preferences, and regulatory requirements while ensuring sustainable and ethical production practices.

Table of Contents:

1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation

• Application
• Edible Oil
• Surfactants
• Bio-diesel
• Others
• Type
• Conventional
• Organic
• Geography
• APAC
• Middle East And Africa
• Europe
• North America
• South America

7 Customer Landscape
8 Geographic Landscape
9 Drivers, Challenges, and Trends
10 Company Landscape
11 Company Analysis
12 Appendix

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SOURCE Technavio