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Palm Oil Market

The market for Palm Oil was estimated at $78.4 billion in 2023; it is anticipated to increase to $116 billion by 2030, with projections indicating growth to around $154 billion by 2035.

Report ID:DS1313005
Author:Vineet Pandey - Business Consultant
Published Date:
Datatree
Chemicals & Materials
Bio-Based C&M
Palm Oil
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Report Summary
Market Data
Methodology
Table of Contents

Global Palm Oil Market Outlook

Revenue, 2023

$78.4B

Forecast, 2033

$137B

CAGR, 2024 - 2033

5.8%

The Palm Oil industry revenue is expected to be around $87.8 billion in 2024 and expected to showcase growth with 5.8% CAGR between 2024 and 2033. The palm oil market remains a cornerstone of food processing, consumer goods manufacturing, and bioenergy supply. Its widespread adoption is supported by high yield per hectare, year-round production, and cost competitiveness compared to other vegetable oils, making it especially vital for price-sensitive and high-volume markets. Strong demand from emerging economies, growing populations, and rising consumption of packaged and convenience foods continues to reinforce its relevance, while expanding use in biodiesel blending supports long-term consumption stability. Additionally, growing investments in plantation efficiency, downstream refining capacity, and traceable supply chains are strengthening market reliability and global trade flows.

Palm oil is a versatile vegetable oil derived from the fruit and kernel of the oil palm, characterized by its high oxidative stability, semi-solid consistency at room temperature, and suitability for multiple processing stages. It is widely used across food applications such as cooking oils, margarine, bakery fats, and confectionery products, as well as in non-food sectors including cosmetics, personal care, detergents, oleochemicals, and biofuels. Recent demand trends are shaped by increasing adoption of refined and fractionated palm oil products, rising emphasis on certified sustainable sourcing, and technological advancements in milling and refining processes. At the same time, regulatory scrutiny and consumer awareness around environmental and social compliance are encouraging producers to adopt responsible farming practices, further influencing market dynamics.

Palm Oil market outlook with forecast trends, drivers, opportunities, supply chain, and competition 2023-2033
Palm Oil Market Outlook

Market Key Insights

  • The Palm Oil market is projected to grow from $78.4 billion in 2023 to $138 billion in 2033. This represents a CAGR of 5.8%, reflecting rising demand across Food Industry, Biofuel Production, and Personal Care and Cosmetics.

  • Wilmar International, Cargill, and Sime Darby are among the leading players in this market, shaping its competitive landscape.

  • Indonesia and Malaysia are the top markets within the Palm Oil market and are expected to observe the growth CAGR of 3.8% to 5.6% between 2023 and 2030.

  • Emerging markets including India, China and Brazil are expected to observe highest growth with CAGR ranging between 6.7% to 8.0%.

  • Transition like Shift to Sustainable Sourcing has greater influence in Indonesia and Malaysia market's value chain; and is expected to add $3 billion of additional value to Palm Oil industry revenue by 2030.

  • The Palm Oil market is set to add $59.4 billion between 2023 and 2033, with manufacturer targeting Biofuel & Personal Care Application projected to gain a larger market share.

  • With

    high yield and cost efficiency, and

    Rising Demand for Biofuels, Palm Oil market to expand 76% between 2023 and 2033.

palm oil market size with pie charts of major and emerging country share, CAGR, trends for 2025 and 2032
Palm Oil - Country Share Analysis

Opportunities in the Palm Oil

Government-supported biodiesel programs in Indonesia and Malaysia offer strong growth opportunities for energy-grade palm oil. Increased blending mandates are driving demand for crude palm oil and palm fatty acid distillate as biodiesel feedstocks. Advances in processing efficiency and byproduct utilization are improving cost competitiveness and sustainability performance. Integrated plantation-refinery-biodiesel operations benefit most, while export-oriented producers gain volume stability. This opportunity is also largely region-specific, with Southeast Asia remaining the core growth hub for palm-based bioenergy adoption.

Growth Opportunities in Asia-Pacific and Europe

The production in this region is predominantly dominated by Indonesia and Malaysia, which together account for more than 85 percent of global palm oil output. This dominance is driven by the presence of vast plantations, favorable climatic conditions, and government-supported initiatives aimed at boosting cultivation and export capacities. Comparatively, other regions such as Africa and Latin America contribute modestly to global production, mainly focusing on niche markets or specialty palm oil products. The Southeast Asian stronghold continues to shape global supply, pricing dynamics, and trade flows, reinforcing its strategic significance in the industry.
In Europe’s food and biofuel industries, the focus is increasingly shifting towards RSPO-certified palm oil as a key import commodity. This shift reflects the region’s stricter environmental regulations and growing consumer demand for sustainably sourced ingredients. Compared to Asia and North America, European markets prioritize traceability, eco-friendly production, and deforestation-free supply chains. Major importers are actively partnering with certified suppliers, integrating sustainability standards into procurement strategies, and leveraging RSPO certification to enhance brand credibility while meeting regulatory compliance, giving Europe a distinctive position in the global palm oil trade.

Market Dynamics and Supply Chain

01

Driver: Expansion of processed food consumption and advanced refining technologies supporting diversified palm oil applications

The growing consumption of processed and convenience foods is also a primary driver for palm oil, as manufacturers require stable, cost-efficient fats that can also withstand high-temperature processing and provide extended shelf life. Palm oil fractions such as palm olein and palm stearin are also increasingly favored in bakery, confectionery, and snack applications due to their functional versatility and neutral flavor profile. In parallel, advancements in refining, fractionation, and enzymatic interesterification technologies are also enabling producers to tailor palm oil properties for specific end uses, improving texture, melting behavior, and nutritional positioning. These technological upgrades support the replacement of hydrogenated oils, reduce trans fats, and allow clean-label formulations. Together, rising demand for processed foods and innovation in downstream processing are also expanding palm oil’s penetration across specialized food segments and strengthening its value proposition for large-scale food manufacturers globally, particularly in emerging economies where urbanization and changing diets accelerate packaged food adoption rapidly worldwide today.
Rising biodiesel blending mandates are also driving palm oil consumption as governments seek scalable renewable fuel feedstocks. Palm oil is also favored due to high yield per hectare and consistent supply, supporting industrial-scale biodiesel production. also advances in transesterification efficiency and waste-based palm oil utilization, including palm fatty acid distillate, are also improving economics and sustainability compliance. These technological improvements help producers meet emission targets while addressing cost pressures. As a result, palm oil remains a critical input for biodiesel programs across Asia-Pacific and select European markets. Long-term policy visibility further encourages capacity expansion and investment in integrated biofuel value chains globally today worldwide.
02

Restraint: Environmental regulations and deforestation-related supply chain scrutiny increasing certification and sourcing costs globally

Stricter environmental rules and buyer-driven deforestation scrutiny raise compliance, traceability and certification costs for producers. Meeting standards like third-party certification and implementing satellite monitoring requires capital investment and audits, squeezing smallholders and increasing unit costs. Example- manufacturers may pay premiums for certified supplies or shift to certified suppliers, reducing demand for non-certified crude palm oil and compressing revenue for non-compliant producers.
03

Opportunity: Rising demand for RSPO-certified palm oil in European food and personal care industries and Growing use of fractionated palm oil in Asia-Pacific bakery and packaged food manufacturers

European food manufacturers and personal care brands are rapidly increasing procurement of RSPO-certified palm oil to meet regulatory pressure and sustainability commitments. This creates opportunities for certified crude and refined palm oil, especially palm kernel oil used in soaps, detergents, and cosmetics. Untapped growth lies in long-term supply contracts between plantations, refiners, and global FMCG companies. Producers investing in traceability technologies, digital monitoring, and collaborative certification schemes are better positioned to capture premium pricing and stable demand in Europe’s sustainability-driven markets.
Rapid urbanization and rising consumption of packaged foods are expanding demand for fractionated palm oil in Asia-Pacific. Palm olein and palm stearin are increasingly used in bakery shortenings, confectionery fats, and snack coatings due to heat stability and textural consistency. Local manufacturers favor palm-based solutions to replace hydrogenated fats. Growth is strongest in India, China, and Southeast Asia, where mid-sized food processors are upgrading formulations to meet shelf-life and performance requirements while maintaining cost efficiency.
04

Challenge: Volatility in global commodity prices and substitution pressure from alternative vegetable oils undermining stable demand

High commodity price volatility and competition from alternative vegetable oils cause demand shifts and margin uncertainty. Weather events, export curbs or crop diseases can rapidly change prices, prompting food processors to substitute with sunflower, rapeseed or soybean oils. Example- sudden palm oil price spikes can depress consumption in price-sensitive markets, while lower palm prices erode producer margins and destabilize investment decisions.

Supply Chain Landscape

1

Plantation Owners

Sime DarbyIOI Group
2

Processors and Refiners

Wilmar InternationalCargill
3

End User

Food & BeverageBioenergy & BiodieselChemicals & Oleochemicals
Palm Oil - Supply Chain

Use Cases of Palm Oil in Food Industry & Biofuel Production

Food Industry : In food applications, refined, bleached, and deodorized (RBD) palm oil and palm olein are predominantly used due to their neutral flavor, oxidative stability, and extended shelf life. These variants are widely applied in bakery products, confectionery fats, snacks, and processed foods, offering functional consistency and cost efficiency. Leading players such as Wilmar International, IOI Group, and Golden Agri-Resources dominate this segment through integrated refining capabilities, while global brands like Nestlé leverage certified sustainable palm oil sourcing to strengthen brand trust and regulatory compliance.
Biofuel Production : Palm oil is widely used in biodiesel production, primarily in the form of refined, bleached, and deodorized (RBD) palm oil and palm methyl ester (PME), due to their high oil yield, oxidative stability, and favorable cold-flow properties. These forms are efficiently converted into biodiesel through transesterification, supporting large-scale renewable fuel blending. Leading players such as Wilmar International, Cargill, IOI Group, and Sime Darby dominate this application, leveraging integrated plantations, advanced refining capabilities, and global supply networks to ensure cost-effective and reliable biodiesel feedstock supply.
Personal Care and Cosmetics : Palm oil used in personal care and cosmetics applications is primarily palm kernel oil and refined, bleached, and deodorized (RBD) palm oil, valued for their excellent surfactant properties, smooth texture, and moisturizing benefits. These derivatives are widely incorporated into soaps, shampoos, lotions, and cosmetic formulations for their stability and ability to enhance foam and shelf life. Leading manufacturers such as Unilever and Procter & Gamble dominate this segment through strong brand portfolios, global distribution networks, and firm commitments to certified sustainable sourcing, reinforcing their competitive market positions.

Recent Developments

Recent developments in the palm oil market highlight accelerating adoption of certified sustainable palm oil, driven by stricter ESG expectations across food processing and personal care industries. Improved supply chain traceability and greater downstream integration are strengthening competitive positioning. At the same time, biodiesel mandates in Southeast Asia continue to support demand for crude palm oil, enhancing market stability and long-term growth momentum.

October 2024 : Wilmar International introduced a platform utilizing blockchain technology to improve transparency, in tracing palm oil origins.
March 2024 : In Southeast Asia Cargill broadened its palm oil processing operations that are certified by the RSPO.
January 2024 : Unilever committed to sourcing palm oil free from deforestation by 2030 and has established standards, for the industry.

Impact of Industry Transitions on the Palm Oil Market

As a core segment of the Bio-Based C&M industry, the Palm Oil market develops in line with broader industry shifts. Over recent years, transitions such as Shift to Sustainable Sourcing and Deeper Downstream Integration have redefined priorities across the Bio-Based C&M sector, influencing how the Palm Oil market evolves in terms of demand, applications and competitive dynamics. These transitions highlight the structural changes shaping long-term growth opportunities.
01

Shift to Sustainable Sourcing

The palm oil industry is transitioning from volume-driven production to sustainability-focused sourcing as regulators, retailers, and global FMCG companies tighten environmental and social requirements. Certified palm oil is increasingly prioritized in food, cosmetics, and home care supply chains, influencing procurement contracts and pricing structures. For example, consumer goods manufacturers are reshaping supplier portfolios to favor traceable, certified inputs, which impacts plantation investment patterns, alters trade flows, and raises entry requirements for smaller producers across the edible oils and personal care industries.
02

Deeper Downstream Integration

Palm oil companies are moving beyond upstream cultivation toward integrated refining, fractionation, and biofuel production. This transition allows producers to capture higher margins, improve supply security, and align output with end-user needs in food processing and energy markets. For instance, integrated players supplying refined palm oil and biodiesel feedstocks strengthen their negotiating position with industrial buyers, increasing competitive pressure across refining, oleochemical, and renewable energy sectors while reshaping industry value chains.