The global palm oil market is on an upward trajectory, projected to reach US$84.98 billion by 2032, up from US$58.73 billion in 2023. This growth represents a compound annual growth rate (CAGR) of 4.19% from 2024 to 2032. This article delves into the factors driving this expansion, the challenges faced by the industry, and emerging trends shaping its future.
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Palm Oil Market Outlook
Palm oil, extracted from the fruit pulp of the oil palm tree (Elaeis guineensis), is native to West Africa, Malaysia, and Indonesia. Rich in carotenoids, palm oil can be separated into various fractions with unique properties. The refining process purifies crude palm oil, enhancing its versatility and functionality. The food industry, in particular, has embraced refined palm oil for its beneficial properties and widespread availability.
But palm oil is not just confined to cooking. It is a key ingredient in many everyday products—bread, biscuits, margarine, cereals, instant noodles, and even candles. Additionally, it's present in personal care items such as shampoos and in delectable treats like chocolates and ice cream. The rising global demand underscores its ubiquitous presence and versatility.
Palm Oil Production: Palm oil production has experienced steady growth over the past fifty years. From 1995 to 2015, annual production increased from 15.2 million tons to 62.6 million tons, and it's expected to reach 240 million tons by 2050. Today, palm oil plantations occupy 10% of the world's permanent cropland, and products containing palm oil are used by 3 billion people across 150 countries.
Indonesia is the largest producer and exporter of palm oil. However, the rapid expansion of plantations has led to significant environmental and social challenges, including deforestation, biodiversity loss, and social conflicts. While the Indonesian government supports the industry, addressing these issues is crucial for sustainable development.
Palm Oil Consumption: Palm oil consumption is on the rise globally, driven by its versatility and extensive application in various products. Rich in both saturated and unsaturated fats, as well as vitamin E and beta-carotene, palm oil offers several health benefits. It provides energy, supports vision, boosts the immune system, and may reduce the risk of heart disease and cancer. The growing awareness of these benefits and the expansion of the food sector contribute to the market's growth. In the U.S. alone, approximately 1.7 million metric tons of palm oil are consumed annually.
Increase in Personal Care and Cosmetic Products: The use of palm oil in personal care and cosmetic products is also rising. Palm oil's nourishing, emollient, and protective properties make it a popular ingredient in makeup, body oils, hair products, and creams. In global markets, it accounts for about 10% of the market share, with a slightly smaller presence in Europe (7%). In cosmetic product labels, palm oil is listed as "Elaeis Guineensis fruit oil," while palm kernel oil is identified as "Elaeis Guineensis kernel oil."
Indonesia's Palm Oil Market
Indonesia is actively increasing the use of palm oil in biofuel production to support renewable energy goals and reduce greenhouse gas emissions. Advanced biofuel production from palm residues presents a sustainable alternative, contributing to Indonesia's biodiesel blending targets. Nonetheless, this expansion poses risks to biodiversity and deforestation. Implementing sustainable practices and policies is essential to mitigate these impacts and promote environmental sustainability. In October 2023, Indonesia introduced its crude palm oil futures exchange. This move aims to enhance price transparency domestically and challenge existing global price benchmarks in the long term.
Palm Oil Market Company Overview
Several leading companies dominate the global palm oil market, including: Archer-Daniels-Midland Company, Boustead Holdings Berhad, IJM Corporation Berhad, IOI Corporation Berhad, Kulim Malaysia Berhad (Johor Corporation), Sime Darby Plantation Berhad, United Plantations Berhad, Univanich Palm Oil Public Company Ltd., and Wilmar International Ltd. These companies play a crucial role in shaping market dynamics, influencing trends, and driving innovations.
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Recent developments news in the palm oil industry highlight its evolving landscape:
India's Integrated Oil Palm Processing Unit: In May 2024, India's first integrated oil palm processing unit, 3F Oil Palm, commenced commercial operations. This facility includes a palm oil processing and refinery, a modern oil palm factory, a zero-discharge effluent plant, a palm waste-based power plant, and additional infrastructure. It marks the first oil palm factory in Arunachal Pradesh under the National Mission on Edible Oils–Oil Palm (NMEO-OP).
AI Monitoring Project in Indonesia: Dabeeo, an AI technology company, launched a new AI monitoring project in Indonesia in May 2024. This initiative, in partnership with Tunas Sawa Erma Group, aims to enhance palm oil plantation management through advanced technology.
Oil Palm Plantation Program in Odisha: In January 2024, M11 Industries and MK Agrotech began an oil palm plantation program in Odisha, India. This program, part of the National Mission on Edible Oils–Oil Palm, was formalized with a memorandum of understanding (MoU) between Odisha's corporation and government.
Application – Global Palm Oil Market breakup in 6 viewpoints:
- Household Cooking
- Food & Beverages
- Oleo Chemicals
- Personal Care
- Animal Feed
- Bio-fuel
Country – Global Palm Oil Market breakup in 25 viewpoints:
North America
- United States
- Canada
Europe
- France
- Germany
- Italy
- Spain
- United Kingdom
- Belgium
- the Netherlands
- Turkey
Asia Pacific
- China
- Japan
- India
- Australia
- South Korea
- Thailand
- Malaysia
- Indonesia
- New Zealand
Latin America
- Brazil
- Mexico
- Argentina
Middle East & Africa
- South Africa
- Saudi Arabia
- United Arab Emirates
All the Key players have been covered from 3 Viewpoints:
- Overview
- Recent Development & Strategies
- Financial Insights
Company Analysis:
- Archer-Daniels-Midland Company
- Boustead Holdings Berhad
- IJM Corporation Berhad
- IOI Corporation Berhad
- Kulim Malaysia Berhad (Johor Corporation)
- Sime Darby Plantation Berhad
- United Plantations Berhad
- Univanich Palm Oil Public Company Ltd.
- Wilmar International Ltd.
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