Global Palm Oil Market: Production and Consumption Trends, Major Consumers, and Future Outlook

In the last 50 years, palm oil production has skyrocketed. Palm oil production peaked in the 1970s at 2 million tones and is now 35 times higher, at 77 million tons in 2022/23. The demand for sustainably produced palm oil is also driven by industrialized countries' growing concern for clean and green fuels, as well as palm oil's growing use as a feedstock in biofuel production.

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► Dip in Consumption
During the year 2021/22 Global palm oil consumption dipped to 71.08 million metric ton units from 73.12 million metric ton in 2020/21 slightly owing to increasing price of palm oil across the world, gradually consumers started shifting towards soy oil and other oils, but during the year 2022/23 consumption increased to 75.97 million metric ton due to the growing knowledge of its health advantages.

► Major Consuming Nations
The world's largest producer and user of palm oil is unquestionably Indonesia. The majority of domestic consumption in Indonesia is used for food, particularly as cooking oil, although a sizable (and growing) amount is used to make biofuels. Indonesia, India, and China are the three largest consumers, accounting for more than half of the global demand of palm oil. Palm oil is mostly utilized as cooking oil in these three nations.

On the other hand, palm oil demand is rapidly increasing from Middle East & African countries such as Egypt and Dubai. The industry's demand is primarily influenced by the growing demand for processed foods and the use of renewable and halal-certified cosmetics.

► Export Ban led to Decline in Production
The export prohibition had an effect on the farmers' ability to maintain the plants, which resulted in a reduction in productivity. Additionally, the farmers decided to stop harvesting their fresh fruit bunches while the ban was in effect and for a few months later because stock was still very high. On the contrary, the growers had given up hope of increasing production through new planting due to the PSR program's failure to meet its target and the only modest growth in plantation acreage over the previous five years, which was a result of the moratorium on palm oil plantation licences, at 6,00,000HA.

► Top Three Countries which show the highest export increase during August 2022 are:
■ India: Indonesia exported 1.08 million tons of palm oil to India in August 2022, which increased by 193% from the 370.8 thousand tones in July 2022.
■ China: From 524 thousand tones in July 2022 to 879 thousand tones in August 2022, Indonesian palm oil shipments to China surged by 68% or 355 thousand tones.
■ European Union: From 334 thousand tones in July 2022 to 879 million tons in August 2022, Indonesia's exports of palm oil to the European Union increased by 51.7%.

► Price Fluctuation Future Outlook
■ After reaching record highs in 2022, crude palm oil prices may begin to decline in 2023, but "wild cards" including Malaysia's manpower shortage on its palm plantations, China's reopening, and impending recession worries might derail projections. Prices for all oilseeds and oilseed products are anticipated to climb little throughout the forecast period in nominal terms. Due to the oversupply of per capita food, the biodiesel industry's stagnation, and the ongoing intensification of livestock in many emerging economies
■ The benchmark crude palm oil (CPO) spot price for Malaysia is expected to average USD 850 per tonne in 2023, a considerable decrease from the USD1,175/t in 2022, according to Fitch Ratings. On the other hand, according to MPOC anticipates that the price of palm oil will range between MYR 3,900 and 4,300 per tonne, and between MYR 3,800 and 4,200 per tonne until the second quarter of 2023.

Makreo research has published study on Palm Oil titled, "Global Palm Oil Market Report - By Trade, Revenue and Forecast 2018-2028". Market assessment has been carried out using qualitative and quantitative methods and have combined the production and consumption scenario. The market has witnessed many shifts in recent past after the COVID-19 outburst & Ban of Export by Indonesia that given a suggest push in the market. Future outlook has been assessed keeping various influencing factors into consideration and also to assess the expected opportunities in the market.

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This release was published on openPR.