Palm Oil Market
Palm Oil Market By Product Type (Processed Palm Oil, Virgin Palm Oil), By Distribution Channel (Modern Trade Channels, Franchise Outlets, Specialty Stores, Online Channels), By End User (Foodservices, Food Processing Industries, Retailers), by Region – Global Forecast 2021-2031
Palm Oil Market Outlook 2021-2031
Global palm oil market size in 2022 is expected to top nearly US$ 33 Bn. As per the report, palm oil market revenues are anticipated to grow 1.5x to reach nearly US$ 50 Bn by 2031, experiencing a compounded annual growth rate (CAGR) of nearly 5%.
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Palm Oil Consumption Analysis 2016-2020 vs Future Outlook 2021-2031
From 2016 to 2020, consumption of palm oil expanded at a CAGR of 4% with the market closing in at almost US$ 30 Bn. Significant growth in demand from key end use industries coupled with rising consumer awareness regarding positive health benefits has sustained sales.
Sales are especially high across Indonesia, India, and China. According to government data, India's total palm oil potential in 2019 is estimated to be around 350,000 hectares spread across 16 states.
In the long run, global palm oil demand is expected to rise, registering a CAGR of nearly 5% until 2031. India and China will continue to consume maximum palm oil.
How is Multiple Functionality Spurring Palm Oil Uptake across Major Industries?
Attributed to its multifarious benefits, palm oil is utilized in a variety of applications, including food, personal care, and transportation fuel, especially biodiesel. According to World Wildlife Fund (WWF), palm oil is utilized in close to 50% of packaged products, ranging from pizzas, doughnuts and chocolate, to deodorant, shampoo, toothpaste and lipstick.
Palm oil is highly versatile, possessing several properties and functions which makes it so useful and so widely used. In Asian and African countries, palm oil is used widely as a cooking oil, just like sunflower oil or olive oil. Greater stability at high temperatures makes it an ideal choice for fried products.
How is Uptake in Biofuels and Energy Sectors Yielding Growth Opportunities?
In recent years, palm-derived biodiesel has acquired significant traction. Compared to petroleum-based diesel, palm oil based biodiesel has a significantly lower sulfur content. Hence, the risk of noxious emissions upon its combustion is mitigated.
A recently developed palm biodiesel variant offers low pour content. This makes it easier to use, particularly during winters. It also produces far less carbon residues, meaning it leaves lesser carbon build-up in a diesel engine. In terms of feedstock, palm oil is considered an economical alternative to soybean.
Availability of Substitute Products to Hamper Expansion Prospects?
While palm oil is the most popular vegetable oil due to its greater saturated fatty acid content, manufacturers are investigating other alternatives, including soybean oil, rapeseed oil, and sunflower respectively.
Concerns regarding deforestation to plant more palm trees is discouraging end users from using palm oil. Although the aforementioned alternatives lack the same solid fats as palm oil, hydrogenation of liquid oil can mimic the consistency of palm oil solid fats. This is expected to hamper adoption in the forthcoming decade.
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What Supports Increasing Palm oil Sales in Europe?
Europe is likely to dominate the global palm oil industry. Countries such as the Netherlands, Germany, Spain, and Italy import sustainable palm oil and distribute it in the European market. Fact.MR expects the region to expand at a CAGR of around 4% until 2031.
According to sources, 7.3 million tons were imported by the European Union for usage in the food and energy industries. These factors are expected to contribute to the worldwide sustainable palm oil market's expansion.
How Lucrative is the Opportunity for Palm Oil in India?
According to market sources, the Indian government stated recently that it will reduce tariffs on imports of tropical oil to combat food price inflation.
The Indian Ministry of Finance declared that import levies on crude palm oil (CPO) have been reduced from 38% to 28%, citing that it was “in the public interest” to do so.
Based on these trends, it is expected that sales and production of palm oil is anticipated to incline significantly in forthcoming years. Fact.MR anticipates a CAGR of around 4% for the Indian palm oil market.
Why are Sales of Palm Oil Rising in the U.S?
In 2021, palm oil demand in the U.S is expected to be worth $12 Bn, holding a 27% stake. Rising preference for consuming vegetable oils is spurring uptake since the past few years.
According to the U.S Department of Agriculture, 1470 metric tons of palm oil is expected to be consumed through 2021 domestically. This represents an increase of 5.3% compared to 2020. Extensive uptake across the food & beverage and pharmaceutical industries is expected to steer future growth.
How are the Growth Prospects Unfolding across China?
China, the world's second-largest economy, is expected to reach an impressive market size, representing a CAGR of over 8% across the short-term forecast period.
Palm oil demand and consumption in the Chinese food sector is expected to witness significant growth as government efforts to clamp down on the use of genetically modified (GM) products acquires pace. Between January and August 2020, imports totaled to 1.85 million metric tons, especially from Malaysia.
Why is Processed Palm Oil Likely to Remain Preferred?
As per Fact.MR’s palm oil industry analysis, processed palm oil is expected to outperform its virgin counterpart, accounting for 3/4th of the global demand through 2031.
Growth is majorly attributed to the presence of a higher concentration of saturated fatty acids compared to virgin palm oil. The latter is largely confined to cooking applications, yielding 1/4th of the global revenue until 2031.
How is the Foodservice Segment Favoring Palm Oil Sales Expansion?
Extensive palm oil applications owing to its high nutritional value across major food preparations is likely to impel sales in the foodservice domain.
As per Fact.MR, the foodservice segment is expected to generate revenue worth US$ 13 Bn by 2022. Simultaneously, the food processing industry is expected to generate an opportunity worth US$ 9 Bn by the same period.
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In the following decade, manufacturers in the palm oil market will focus on strategic acquisitions, collaborations, and new launches.
- In June 2021, Cargill announced a $200 million investment in a new palm oil refinery in Lampung, Indonesia. The proposals will help the company expedite its efforts to build a sustainable palm supply chain and provide customers with verified deforestation-free products.
- Similarly, Hershey's palm oil is used in a limited number of goods since it is adaptable and has unique properties that other edible oils lack. Palm oil, for example, contains no trans-fat and has a distinct texture and flavor when used in specialized confectionery applications.
Key Segments Covered
By Product Type :
- Processed Palm Oil
- Virgin Palm Oil
By End User :
- Palm Oil Demand from Foodservices
- Palm Oil Demand from Food Processing Industries
- Palm Oil Demand from Retailers
By Distribution Channel :
- Palm Oil Sales through Modern Trade Channels
- Palm Oil Sales through Franchise Outlets
- Palm Oil Sales through Specialty Stores
- Palm Oil Sales through Online Channels
- FAQs -
According to Fact.MR, global palm oil sales are poised to reach US$ 33 Bn by 2022
From 2016 to 2020, palm oil sales expanded at around 4% CAGR
As per Fact.MR’s projections, palm oil market value is poised to reach US$ 50 Bn by 2031, expanding at nearly 5% CAGR
Extensive applications in the food & beverages processing sector and pharmaceutical industry amid perceived health benefits is majorly driving market growth
Increased applications as biofuels, particularly biodiesel, is expected to accelerate sales of palm oil across several countries
A CAGR of 4% has been projected for the European palm oil industry until 2031
The U.S is expected to account for 27% of palm oil demand across North America
Palm oil market in India will likely expand at a CAGR of around 4% in the forecast period
China is forecast to register a CAGR of 8% in the short-term forecast period
Processed palm oil is expected to account for 75% of global palm oil demand until 2031
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Yes, the report has been compiled by expert analysts of Fact.MR, through a combination of primary and secondary research. To know more about how the research was conducted, you can speak to a research analyst.
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