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Palm Oil Market

The market for Palm Oil was estimated at $73.4 billion in 2025; it is anticipated to increase to $97.3 billion by 2030, with projections indicating growth to around $129 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, 2025

$73.4B

Forecast, 2035

$129B

CAGR, 2026 - 2035

5.8%

The Palm Oil industry revenue is expected to be around $73.4 billion in 2026 and expected to showcase growth with 5.8% CAGR between 2026 and 2035. This projected expansion reinforces Palm Oil as a cornerstone commodity in the global edible oils and biofuel markets, supported by its cost-competitiveness, high yield per hectare, and functionality across food formulations and industrial uses. Accounting for 72.0% of total end-use, the Food & Beverage and Biofuel & Energy segments continue to anchor Palm Oil demand, leveraging its role as both a versatile cooking oil and efficient biofuel feedstock within renewable energy portfolios. Crude Palm Oil, which generated $35.39 billion in sales in 2025, remains the dominant product type in the Palm Oil market, underpinning large-scale refining, oleochemicals production, and downstream value chains that secure the industry’s ongoing relevance for emerging and developed economies.

Palm Oil is a highly productive vegetable oil distinguished by its balanced fatty acid profile, semi-solid texture at ambient temperatures, and oxidative stability, making it a preferred ingredient in processed foods, bakery fats, confectionery coatings, and instant noodles as well as in household and personal care products. Beyond the Food & Beverage sector, Palm Oil derivatives are essential in biofuel and energy applications, soaps and detergents, lubricants, and specialized oleochemicals, where consistent quality and year-round availability are critical. Recent trends such as the shift toward sustainable palm oil sourcing, increased traceability across responsible supply chains, tightening biofuel blending mandates, and rising demand for plant-based, clean-label products are reshaping the Palm Oil industry landscape and reinforcing its position in global commodity, energy, and consumer goods markets.

Palm Oil market outlook with forecast trends, drivers, opportunities, supply chain, and competition 2025-2035
Palm Oil Market Outlook

Market Key Insights

  • The Palm Oil market is projected to grow from $73.4 billion in 2025 to $129 billion in 2035. This represents a CAGR of 5.8%, reflecting rising demand across Food Industry, Biofuel Production, and Personal Care and Cosmetics.

  • Wilmar International, IOI Corporation Berhad, and Kuala Lumpur Kepong Berhad 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 2025 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 $55.6 billion between 2025 and 2035, with manufacturer targeting Personal Care & Cosmetics & Biofuel & Energy Application projected to gain a larger market share.

  • With

    expansion of processed food consumption and advanced refining technologies supporting diversified palm oil applications, and

    Rising biodiesel mandates accelerating palm oil utilization in energy markets, Palm Oil market to expand 76% between 2025 and 2035.

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

In the European Union, tightening decarbonisation targets and advanced biofuel mandates are also stimulating interest in Palm Oil as a flexible biofuel feedstock for renewable diesel and co-processing refineries. While regulatory scrutiny remains high, certified Crude Palm Oil and by-products can support secure feedstock supply and price stability versus competing vegetable oils. Globally, Crude Palm Oil revenues are expected to increase from $35.39 billion in 2025 to $46.92 billion by 2030, reflecting a 5.8% CAGR anchored in energy applications.

Growth Opportunities in Asia-Pacific and Europe

In Asia-Pacific, the Palm Oil market is driven primarily by the Food & Beverage industry, where palm-based cooking oils, specialty fats, and vegetable oil blends dominate household and industrial consumption, creating strong demand for both crude palm oil and refined grades; top opportunities lie in moving beyond bulk edible oils into higher-margin palm oil derivatives for bakery, confectionery, and instant foods, as well as oleochemicals for home and personal care applications, supported by rapid urbanization, rising disposable incomes, and a cost advantage over competing oils in the broader edible oils market; competition is intense among integrated plantation–refining groups and agile regional refiners that are investing in automation, yield-improvement technologies, and RSPO certification, pushing new entrants to differentiate via reliable supply, sustainability credentials, and customized formulations; key growth drivers include government support for agribusiness, expanding retail and foodservice channels, and growing interest in sustainable palm oil from multinational brands, which opens strategic room for partnerships, co-investment in traceability systems, and capacity expansion targeted at branded cooking oils, value-added food ingredients, and feedstock for export-oriented palm-based biofuels.
In Europe, the Palm Oil market is increasingly shaped by regulatory and sustainability pressures, with the Biofuel & Energy segment holding the highest strategic relevance as palm-based biodiesel and renewable diesel face tightening rules yet still influence import flows and pricing dynamics across the value chain; the most attractive opportunities are shifting toward certified sustainable palm oil and high-spec palm oil derivatives for Personal Care & Cosmetics and Pharmaceuticals, where demand for consistent quality, traceable sourcing, and advanced functional ingredients supports premium pricing; competition is led by large refining and trading groups and specialized ingredient formulators that secure segregated or mass-balance certified supply, compelling new and existing suppliers to focus on differentiated sustainability narratives, long-term offtake agreements, and technical support for customers reformulating products; primary market drivers include stringent climate and deforestation policies, corporate commitments to zero-deforestation supply chains, evolving fuel mandates, and consumer preference for ethical, high-performance products, creating strategic opportunities for investment in certified supply chains, collaboration with European brand owners on next-generation palm-based biofuel feedstock and oleochemicals, and repositioning Palm Oil from a commodity input to a traceable, sustainable ingredient in premium consumer and industrial applications.

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: Sustainable packaged food manufacturing expansion in India and Indonesia and Premium clean beauty and personal care consumers in North America

Rapidly expanding packaged food and plant-based foods sectors in India and Indonesia are creating strong demand for versatile, cost-efficient Palm Oil ingredients. Manufacturers of snacks, instant noodles, bakery, confectionery, and dairy alternatives are shifting toward RBD Palm Oil and palm oil derivatives that deliver neutral flavour and extended shelf life. Global RBD Palm Oil revenue is projected to rise from $13.07 billion in 2025 to $18.50 billion by 2030, the fastest 7.2% CAGR, with sustainable palm oil and clean label claims unlocking premium margins.
Rising demand for naturally derived cosmetic ingredients in North America is opening space for Palm Oil innovators targeting premium skin care, hair care, and personal hygiene brands. Palm Kernel Oil and highly refined RBD Palm Oil fractions can replace petrochemical surfactants and emollients while improving product sensory performance. On a global basis, Palm Kernel Oil revenues are projected to grow from $15.86 billion in 2025 to $19.96 billion by 2030, a 4.7% CAGR driven by high-value personal care and oleochemical uses.
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

Palm Oil Plantations

United Plantations BerhadSime Darby PlantationGolden Agri-Resources
2

Crude Palm Oil

IOI Corporation BerhadKuala Lumpur Kepong BerhadMusim Mas
3

Refined Palm Oil

Wilmar International Ltd.ADMCargill
4

End-Use Applications

Sustainable palm oil foodsEdible vegetable oilsBiofuel and biodiesel
Palm Oil - Supply Chain

Use Cases of Palm Oil in Food Industry & Personal Care

Food Industry : Palm oil plays a central role in the food industry due to its versatility, stability, and cost efficiency. Refined, bleached, and deodorized palm oil as well as palm olein and palm stearin fractions are widely used in cooking oils, bakery fats, confectionery coatings, and processed foods. Palm olein is preferred for frying applications because of its high oxidative stability and balanced fatty acid profile, which helps extend shelf life and maintain flavor. Palm stearin is commonly blended into margarine and shortening to provide desirable texture and structure. Its semi solid nature at room temperature eliminates the need for hydrogenation, supporting trans fat free formulations in packaged food products.
Biofuel Production : In biofuel production, crude palm oil and palm fatty acid distillate are key feedstocks for biodiesel manufacturing. These materials undergo transesterification to produce fatty acid methyl esters that can be blended with conventional diesel fuel. Palm oil based biodiesel offers high energy content and relatively stable combustion performance, making it suitable for transportation and power generation. Many countries in Southeast Asia and Europe incorporate palm biodiesel into mandated blending programs to enhance renewable fuel adoption. The consistent supply and high oil yield per hectare make palm oil an economically attractive raw material for large scale biofuel operations seeking reliable and scalable feedstock sources.
Personal Care and Cosmetics : Palm oil and its derivatives are extensively used in personal care and cosmetic formulations due to their emollient and surfactant properties. Refined palm oil, palm kernel oil, and fatty alcohol derivatives are incorporated into soaps, shampoos, creams, and lotions. Palm kernel oil is particularly valued for its high lauric acid content, which provides cleansing and foaming characteristics in soap production. Fatty acids and glycerin derived from palm oil enhance moisturization and texture in skin care products. Their compatibility with a wide range of formulations and ability to support stable emulsions make palm based ingredients essential components in modern beauty and hygiene applications.

Recent Developments

Recent developments in the palm oil market show increased investment in downstream refining, fractionation, and biodiesel integration as companies respond to evolving sustainability standards and renewable energy mandates. A key trend is growth in certified sustainable palm oil production and biofuel feedstock diversification, driven by consumer demand for eco-friendly ingredients and regulatory pressure to reduce carbon emissions. This shift supports broader use in food processing, oleochemicals, and renewable fuels, enhancing supply chain resilience and market competitiveness.

June 2025 : Wilmar agreed to acquire the remaining 50% stake in PZ Wilmar Limited, its Nigerian joint venture with PZ Cussons, for about US$70 million, giving Wilmar full ownership of a major palm oil plantation and edible oils/refinery business and strengthening its upstream and downstream presence in West Africa’s edible oil market. Completion is expected in late 2025 pending approvals.
November 2025 : Wilmar International Ltd. received Competition Commission of India approval to acquire up to a 20% stake in AWL Agri Business Ltd as part of a broader equity acquisition strategy in India’s large edible oil and FMCG segment, reinforcing its distribution and branded palm oil footprint.

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 shift to sustainable sourcing is redefining the Palm Oil market from Indonesia and Malaysia outward, moving the value chain from volume to verified impact and unlocking an estimated $3 billion in additional industry revenue by 2030. As global FMCG, food, and personal care brands tighten ESG compliance, demand is consolidating around certified palm oil and deforestation-free supply chains, enabling premium pricing and longer-term offtake contracts. Buyers increasingly require full traceability and RSPO certification, reshaping plantation investment decisions and excluding non-compliant smallholders from high-value export channels. This transition is reconfiguring trade flows in edible oils, concentrating bargaining power with scalable, sustainable producers and positioning sustainable palm oil as a strategic differentiator in global supply chains.
02

Deeper Downstream Integration

Deeper downstream integration is significantly transforming the palm oil market by shifting value creation from raw crude palm oil sales to higher margin refined and specialty products. By investing in refining, fractionation, oleochemical processing, and biodiesel plants, producers gain greater control over quality, pricing, and supply continuity. For example, integrated companies supplying refined palm olein to food manufacturers can ensure consistent specifications and faster delivery, strengthening long term supply contracts. In the energy sector, firms producing biodiesel in house can respond quickly to blending mandates and renewable fuel incentives. This integration also intensifies competition for independent refiners and standalone oleochemical producers, as large integrated players leverage scale efficiencies, optimized feedstock allocation, and stronger bargaining power across food, personal care, and renewable energy industries.