Palm Oil and Palm Oil Derivatives Market Size, Share, Industry, Forecast and outlook (2024-2031)

Palm Oil and Palm Oil Derivatives Market is segmented By Product Type (Crude Palm Oil, Palm Kernel Oil, Palm Kernel Cake, and Others), By Application (Food & Beverages, Cleaning & Personal Care, Feedstock, Biofuel), By Distribution Channel (E-Commerce, Supermarkets & Hypermarkets, others), and By Region (North America, Latin America, Europe, Asia Pacific, Middle East, and Africa) – Share, Size, Outlook, and Opportunity Analysis, 2024-2031

Palm Oil and Palm Oil Derivatives Market Overview

The Palm Oil & Palm Oil Derivatives Market is expected to grow at a CAGR of 6.87% during the forecast period 2024-2031.

Palm oil is an edible vegetable oil high in saturated fats and free from trans fats. Palm oil is used in around 50% of food products available in the market. Palm oil derivatives, also known as fractions, are used to produce pre-packaged food, cosmetics, cleaning products, hair care, soaps, and other personal care products. Palm oil is also used to produce biofuels and exhibiting as a green fuel option for motor vehicles, shipping and Aircraft fuel. Palm kernel cake, a by-product of palm kernel oil, is used as feed-in livestock.

Palm Oil and Palm Oil Derivatives Market Summary

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Palm Oil and Palm Oil Derivatives Market Dynamics and Trends

The Cost-effectiveness and edible nature of palm oil made it an effective ingredient in producing packaged food products and healthcare products. The widening application spectrum of palm oil in food, cosmetics, and personal care products results in significant growth of the global palm oil and palm oil derivatives market. Growing demand for food and changing food habits results and the need for nutrient-rich food products to meet the nutritional requirements of consumers. Focus is laid on the utilization of healthy ingredients and efficient food processing technologies. Palm oil is considered the healthiest cooking oil over all other vegetable oils due to the nutrient and healthy fat content. The consumption of palm oil in the food industry is likely to witness a growth of 1.3%, a higher rate than most agricultural commodities, during the forecast period. According to the OECD-FAO Agricultural Outlook, palm oil's global production is expected to increase from around 80 million tons in 2020 to close to 100 million by 2030 in the OECD-FAO Agricultural Outlook, palm oil's global production oil & palm oil derivatives.

The market is likely to grow at a lucrative growth rate due to the growing utilization of palm kernel cake in livestock feed due to its nutritional benefits. The rising livestock popular due and growth in the animal feed industry are estimated to port the growth due palm oil derivatives market. World cattle population is well above 1 billion and is only expected to increase which would positively impact the palm oil derivatives market. Furthermore, the growing demand for biodiesel in automotive and industrial applications may provide growth opportunities to the palm oil market. Automobile policies worldwide are shifting towards usage of B20 (Biodiesel), and biodiesel from palm oil has significant potential as an alternative to petroleum fuels. Usage in Soaps, Detergents, Surfactants, Cosmetics, Pharmaceuticals, Nutraceuticals and other similar products is also increasing which will positively impact the Palm Oil and Palm Oil Derivatives Market.

However, the environmental concerns associated with the production of palm oil are limiting the market growth. Palm oil production is considered one of the major factors of rainforest destruction in Asia and America. This is shifting consumers' interest away from palm oil biodiesel, particularly in automotive applications. According to the OECD-FAO Agricultural Outlook, although Global palm oil output has outpaced the production of other vegetable oils over the past decade, growth in the production of palm oil is expected to weaken due to increasing attention to sustainability concerns and the aging of oil palm trees in Indonesia and Malaysia. These two countries account for more than 80% of the world’s palm oil production.

Covid-19 Impact Analysis Palm Oil and Palm Oil Derivatives Market

While the global trade came to halt during the lockdowns imposed to control the spread of novel coronavirus, the food industry has been impacted by severe freight challenges. Most of the food categories witnessed decline in sales volume due to lack of demand and supply chain disruptions. The sales declined in the food industry, particularly in food service and HoReCas. Since, food industry is one of the key applications of palm oil, this weakened business imposed a negative impact on the global palm oil and palm oil derivatives market.

Adding to this, more than 80% of global palm oil production is located in the region of Myanmar and Indonesia. The lack of international exports and imports during lockdowns adds to the negative impact. For instance, India's palm oil imports, which account for roughly 60% of its total vegetable oil imports, fell from 9.4 million mt in 2019 to 7.21 million mt in 2020 due to the pandemic. However, these disruptions are only short term and since there is demand, the market will come back to normal once the pandemic ends. Already Indonesian palm oil exports reach decade high $3 billion in May 2021.

Palm Oil and Palm Oil Derivatives Market Segmentation Analysis

Global palm oil consumers' interest away from sed on type to crude palm oil, kernel palm oil, palm oil cake, etc.

Crude palm oil evolved as the largest market in the global palm oil and palm oil derivatives market due to the growing consumption of crude palm oil from the food and cosmetics industry as a primary oiling agent. Crude palm oil is extensively due to soaps, shampoos, lotions, cathendles, cleaning agents, and many other products.  Additionally, increasing implementation of Biodiesel 20 and Biodiesel mandate in major palm producing nations associated with increasing biodiesel production through crude contribute to the growth of the market during the forecast period. Biodiesel production from crude palm oil in Malaysia has increased from 10 million tons in 2018 to 12-13 million tons in 2019, simultaneously contributing to the growth of the global crude palm oil market.

Palm Oil and Palm Oil Derivatives Market has applications in Food & Beverages, Cleaning & Personal Care, Livestock, Biofuel industries. Food & Beverages is by far the largest application with around 80% market share. However, the other industries are also increasing rapidly and expected to have a significantly higher market share in the forecast period. For instance, in 2018, 65% of all the palm oil imported into the EU was used for energy and it will only get higher. More than half of it (53%) of all palm imports was used to make biodiesel for cars and trucks and 12% to generate electricity and heating.

Palm Oil and Palm Oil Derivatives Market Geographical Share

By region, the global palm oil and palm oil derivatives market is segmented into North America, South America, Europe, Asia-Pacific, Middle-east and Africa.

Asia-Pacific palm oil and palm oil derivatives market is expected to grow at a higher CAGR during the forecast period with the high production and consumption environment. More than 80% of global palm oil production is located in the region of Myanmar and Indonesia. According to the data published in The United States Department of Agriculture, annual imports of palm oil to India increased from 2 million tons in 2010 to 9.4 million tons in 2019. Growing domestic demand for palm oil from end-user industries and households led to increased palm plantations across India. Growing government support for the plantations of palm through policies also contributes to the growth of the Indian palm oil & palm oil derivatives market. The National Mission on Oilseeds and Oil palm were implemented under India’s 12th five-year plan for the shifting farming practices towards domestic production of palm oil. Currently, India accounts for 17% of global palm oil consumption.

Palm Oil and Palm Oil Derivatives Market Companies and Competitive Landscape

The key players in the global palm oil & palm oil derivatives market include Wilmar International, PT Astra Agro Lestari Tbk, London Sumatra, ExcelVite, Cargill inc and IOI Corporation Berhad. The key strategies adopted by the prominent players in the global palm oil and palm oil derivatives market include establishing new production plants to cater to the global and regional demand for palm oil. Growing establishments of palm oil include establishing might boost the new installations of oil refineries across the region. This will boost the food processors across the region towards palm oil usage as a primary ingredient in producing their products. Research institutes are working actively in finding new applications of palm oil especially in biodiesel application. However, companies need to be careful to comply with the regulations regarding the sustainability issues concerning palm oil.

• In July 2021, Korindo, a Korean palm oil giant stripped of sustainability status. Korindo's trademark licenses with FSC will be terminated from October 2021.
• In April 2018, African Palm Oil Corporation launched a new palm oil production plant in Guinea-Bissau, West Africa, and planned to expand to seven million hectares across West Africa in the next five years.
• In July 2021, South Korea's state defence research agency has acquired core technologies for the production of palm oil-based bio jet fuel. Through a series of tests, the agency found that the low-carbon renewable fuel could be an alternate fuel source for military and civil jet turbine engines.

Product Portfolio of Cargill Inc.

• Food and Beverages
• Animal Nutrition
• Food Service
• Bio Industrial
• Agricultural
• Meat and Poultry
• Industrial
• Price Risk Management
• Beauty & Personal Care
• Pharmaceuticals
• Transportation and Logistics

Key Developments

• In June 2021, Cargill unveiled its plans to build new palm oil refinery in Lampung, Indonesia, to meet growing demand for sustainable, traceable edible palm oil.  Cargill is building a new US$200 million palm oil refinery will accelerate Cargill’s efforts to develop a sustainable palm supply chain and provide verified deforestation free products to customers.
• Cargill in April 2021, announced plans to break ground on a new canola processing facility in Regina, Saskatchewan, to support the growing global demand for canola products. $350 million project builds upon Cargill’s overall investment across its North America oilseeds network. The company expects to begin construction early next year with plans to be operational by early 2024. The company will also update and modernize its canola facilities in Camrose and Clavet over the next 12 months to increase volume and broaden capabilities at both locations.
• The United Nations World Food Programme (WFP) and the Global Agribusiness Company Cargill in July 2021, jointly launched the Holistic Agriculture Risk Management Project, a three-year pilot initiative in Songyuan, Jilin province of China. Cargill contributes US$1 million to WFP to reduce and mitigate the risks that corn farmers face and help them achieve food security while enhancing resilience at the community level. Other key players include Sime Darby Berhad, Soft Gel Technologies Inc., Golden Agri-Resources Ltd., Asian Agri