Global Palm Oil Market Size, Assessment, Growth and Forecast, 2030

Global palm oil market size was valued at USD 58.8 billion in 2022, which is expected to grow to USD 81.7 billion in 2030, with a CAGR of 4.2% during the forecast period, between 2023 and 2030. The upsurge in global population and economic expansion propels an ever-mounting appetite for edible oils, with palm oil emerging as a pervasive component within a wide spectrum of food products. Additionally, governmental endeavors to foster the integration of biofuels, including those sourced from palm oil, have introduced an additional stratum of significance to this sector. In a collective endeavor to diminish dependence on fossil fuels and abate carbon emissions, the potential of palm oil as a renewable energy resource has garnered the rapt attention of policymakers and various industries.

The global palm oil market faces fluctuations in supply due to unpredictable weather and disease outbreaks. The market is affected by the availability of other oils, trade rules, and changes in currency values along with growing apprehensions concerning deforestation, habitat degradation, and the ethical dimensions associated with palm oil production, all adding a layer of unpredictability to the palm oil industry. However, initiatives such as the Roundtable on Sustainable Palm Oil (RSPO) have garnered substantial momentum contributing to a positive market outlook.

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Growing Demand for Biofuel

Palm oil serves as a vital feedstock in biodiesel production, a renewable energy source that holds significant promise in the global pursuit of sustainable alternatives to fossil fuels. The utilization of palm oil as a primary ingredient in biodiesel formulation has gained traction, driven in large parts by government policies and incentives aimed at advancing the adoption of renewable energy sources.

For instance, in a bid to decrease its reliance on imported diesel fuel in the face of soaring global energy costs and to curb emissions, Indonesia, the largest global palm oil producer has taken the significant step of increasing the mandatory palm oil blend in biodiesel. Since February 2023, the required blending ratio of palm oil in biofuel has been elevated from 30% to a new benchmark of 35%. Government initiatives like these towards biofuel development drive the demand for palm oil globally.

Rising Sustainable Practices

Growing concerns about the decrementing environmental and social impacts associated with palm oil production have significantly altered the industry landscape. Deforestation, habitat destruction, and human rights violations have cast a shadow on conventional palm oil practices, prompting a widespread call for change. This shift in public sentiment has created a heightened demand for palm oil that is sourced and produced in a manner that mitigates these negative consequences.

In response to these concerns, certification programs like the Roundtable on Sustainable Palm Oil (RSPO) have emerged as vital mechanisms for driving responsible production practices within the palm oil sector. The RSPO, as a leading example, sets forth stringent standards and guidelines that producers must adhere to attain certification. These criteria include environmental conservation, land use, labor rights, and community engagement. These rules address consumer concerns and promote consumption raising demand for palm oil.

Impact of COVID-19

The COVID-19 had mixed effects on the global palm oil market. The market faced challenges due to supply shortages, demand differences, and logistical problems. Industries such as chemical processing were affected by market restrictions, lowering the demand for palm oil. The decreased cultivation of palm during Covid-19 owing to labor restriction weakened the market’s supply side. However, there were positive impacts on global palm oil market caused by the increased demand from sectors like pharmaceuticals and personal care. The need for personal care and hygiene items peaked during the pandemic which led to an increased demand for palm oil globally.

Impact of Russia-Ukraine War

The ongoing conflict between Russia and Ukraine did not directly impact the palm oil market. However, Ukraine was the highest sunflower oil exporting country, and the war has disrupted the supply of sunflower oil. Therefore, the demand for substitute oils, such as palm oil peaked at the beginning of the conflict. Moreover, the conflict between Russia and Ukraine has led to market instability and trade disruptions worldwide. Global palm oil manufacturers face challenges due to delays and uncertainty in supply chains resulting from the ongoing war.

Global Palm Oil Market: Report Scope

“Palm Oil Market Assessment, Opportunities and Forecast, 2016-2030F” is a comprehensive report by Markets and Data, providing in-depth analysis and qualitative & and quantitative assessment of the current state of the palm oil market globally, industry dynamics, and challenges. The report includes market size, segmental shares, growth trends, COVID-19 and Russia-Ukraine war impact, opportunities, and forecast between 2023 and 2030. Additionally, the report profiles the leading players in the industry, mentioning their respective market share, business model, competitive intelligence, etc.

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