Palm Oil Market Size & Share | Outlook Report - 2034

According to the report by Expert Market Research (EMR), the global palm oil market attained a volume of nearly 80.97 million metric tons (MMT) in 2024. Aided by the growing demand for vegetable oils in both food and non-food sectors and the increasing use of palm oil as a cost-effective and multifunctional ingredient, the market is projected to grow at a CAGR of 2.80% during 2025-2034, reaching approximately 106.72 MMT by 2034.

Palm oil is one of the most widely used vegetable oils globally and is derived from the fruit of oil palm trees. Owing to its high productivity and diverse applications, palm oil is a staple in food preparation, cosmetics, personal care products, household cleaning goods, and increasingly, biofuels. Its widespread adoption across diverse industries makes it a significant contributor to the global edible oil trade and economic growth in key producing nations.

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Market Size

The global palm oil market forms a major segment within the global edible oils industry. In 2024, global palm oil production reached 80.97 MMT, supported by large-scale plantations in Southeast Asia. The market's expansive growth potential is attributed to its strong presence in developing countries, where palm oil is the most affordable cooking oil. With rising incomes and evolving consumption patterns in emerging markets, the volume is forecasted to increase steadily, touching 106.72 MMT by 2034. This growth reflects the increasing consumption of palm oil in food processing, hospitality, industrial manufacturing, and the energy sector.

Market Share

Asia Pacific dominates the global palm oil market, with Indonesia and Malaysia accounting for over 80% of global production. These nations not only fulfil domestic demand but also supply large volumes to major importing countries such as India, China, the Netherlands, and Pakistan. India remains the world's largest importer of palm oil, driven by its vast population and heavy reliance on palm oil for edible and commercial cooking purposes.

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In terms of application, the food industry holds the largest market share, as palm oil is a crucial ingredient in cooking oils, snacks, baked goods, and confectionery. Non-food uses, such as in soaps, cosmetics, lubricants, and biodiesel, also account for a significant portion of market consumption. The biofuel industry, in particular, is witnessing increased adoption of palm-based feedstock, further supporting market expansion.

Market Trends

A key trend shaping the palm oil market is the increasing focus on sustainability. With rising awareness of environmental issues such as deforestation and biodiversity loss associated with unsustainable palm cultivation, many stakeholders are turning toward Certified Sustainable Palm Oil (CSPO). Organizations like the Roundtable on Sustainable Palm Oil (RSPO) are playing a pivotal role in driving transparency and responsible sourcing practices throughout the supply chain.

The application of technology in palm oil cultivation and processing is also becoming increasingly prevalent. Precision agriculture techniques, satellite mapping, and data-driven yield optimization are helping producers improve efficiency while reducing environmental footprints.

Another trend is the expanding use of palm oil in the renewable energy sector. Palm-based biodiesel is gaining traction as a clean alternative to fossil fuels, particularly in countries implementing mandatory blending mandates. This not only contributes to emissions reduction goals but also enhances domestic consumption of palm oil, balancing the volatility of international markets.

Drivers of Growth

The global palm oil market is being driven by several significant factors.

Growing demand for affordable edible oils
Palm oil is the most affordable and widely used vegetable oil worldwide. In developing countries, it is the preferred choice due to its low cost, long shelf life, and cooking versatility. As incomes rise and urbanisation accelerates, the demand for palm oil in everyday cooking and processed food manufacturing is growing consistently.

Rising consumption in processed foods
The expansion of the processed and packaged food industry has increased the demand for palm oil as it improves shelf stability and texture in food items. Palm oil's properties make it ideal for applications in instant noodles, frozen desserts, bakery products, margarine, and snack items.

Biofuel adoption and government policies
Many countries have introduced policies promoting the use of biodiesel as a renewable energy source. Indonesia and Malaysia, two of the world's largest producers, have implemented blending mandates like B35 (35% palm-based biodiesel), substantially increasing domestic consumption. This trend supports the overall market and helps stabilize palm oil prices amid global trade uncertainties.

High yield and efficient production
Compared to other oil crops, oil palm trees produce a significantly higher yield per hectare. This agricultural efficiency allows producers to meet global demand with less land, making palm oil economically and logistically favorable for cultivation.

Market Key Players

The global palm oil market is supported by the operations of several major players that manage cultivation, refining, distribution, and global exports. These companies are increasingly investing in sustainable practices, vertical integration, and research to meet regulatory and consumer expectations.

Wilmar International Ltd.
Cargill, Incorporated
Bunge Limited
Archer Daniels Midland Company
PT Astra Agro Lestari Tbk
FGV Holdings Berhad
Sime Darby Plantation Berhad.
Kuala Lumpur Kepong Berhad
RGE Pte Ltd
Musim Mas Group
IOI Corporation Berhad
Golden Agri-Resources Ltd
Others

Challenges and Opportunities

The palm oil industry faces several challenges that impact its global perception and operational growth.

Environmental impact and sustainability concerns
The expansion of oil palm plantations has been linked to deforestation, loss of biodiversity, and climate change. This has prompted backlash from environmental groups and the imposition of restrictions or boycotts, especially in Western markets. Producers are under increasing pressure to adopt transparent, traceable, and sustainable cultivation methods.

Trade barriers and geopolitical tensions
Fluctuating import duties, export restrictions, and trade disputes can affect the free flow of palm oil globally. For instance, tariff revisions in India or regulatory restrictions in the EU can disrupt market dynamics and impact pricing structures.

Price volatility and competition from alternative oils
Palm oil prices are influenced by a range of factors, including weather patterns, crude oil prices, and exchange rates. Additionally, increasing production of soybean, sunflower, and canola oils in other regions creates competitive pressure.

Despite these challenges, the market presents substantial opportunities.

Shift toward sustainable and premium palm oil
As consumers and regulators increasingly demand ethically sourced products, there is strong growth potential in the certified sustainable palm oil segment. Companies that can demonstrate compliance with sustainability standards stand to gain access to premium markets and secure long-term partnerships.

Technological innovation in agriculture
The adoption of AI, drone technology, and genetic research in oil palm cultivation offers producers the chance to improve yields, reduce environmental damage, and meet sustainability criteria more effectively.

Rising demand in non-traditional markets
Growing markets in Africa and Latin America are emerging as new demand hubs for palm oil, driven by industrialisation, changing food habits, and expanding middle-class populations.

Market Forecast

The global palm oil market is poised for stable growth during the forecast period from 2025 to 2034. With a projected CAGR of 2.80%, the market is expected to grow from 80.97 MMT in 2024 to 106.72 MMT by 2034. The rising demand for palm oil in both food and non-food applications, alongside regulatory support for biodiesel adoption and increasing sustainability commitments from major producers, will support this growth trajectory.

As innovation and sustainability continue to reshape the palm oil industry, companies investing in responsible sourcing, technological efficiency, and diversified product development will be best positioned to thrive in the evolving market landscape. The shift towards a more transparent and eco-conscious palm oil supply chain, combined with robust demand across global sectors, ensures that the palm oil market remains a resilient and vital part of the global commodities ecosystem.

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