Palm Oil Market to Reach USD 115.56 Billion by 2033, Driven by Food, Biofuel, and Personal Care Demand, Reports Straits Research

The global palm oil market is projected to grow significantly, valued at USD 73.85 billion in 2024 and expected to reach USD 77.62 billion in 2025. According to Straits Research, the market is forecasted to reach USD 115.56 billion by 2033, expanding at a compound annual growth rate (CAGR) of 5.1% during the period from 2025 to 2033. Growth is being driven by increasing demand across the food and beverage, biofuel, energy, and personal care and cosmetics industries, alongside rising consumer awareness of palm oil's nutritional benefits.

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Palm Oil: Nutritional Benefits and Market Trends

Palm oil, extracted from the mesocarp of oil palm fruits, is indigenous to West Africa and is the highest-yielding vegetable oil globally, producing 5-10 times more per hectare than other major vegetable oils. Rich in carotenoids and vitamin A, palm oil offers several health advantages, including improved immunity, better eye health, enhanced vitality, and reduced risk of cancer and heart disease. Its digestibility, low fat content, and nutritional profile have increased global consumer acceptance and are driving market growth.

Market Growth Drivers

The palm oil market is benefiting from growing demand in biofuel production and strong regional development in Asia-Pacific. Indonesia, the world's leading palm oil producer and exporter, supports farmers with government initiatives, contributing significantly to regional economic growth. Palm oil is increasingly used in biofuel as a sustainable alternative to fossil fuels, supporting environmental initiatives globally. Straits Research notes that this growing biofuel demand will continue to propel market expansion.

Market Restraints

Despite growth opportunities, the palm oil industry faces challenges including workforce limitations and supply chain disruptions. The COVID-19 pandemic affected labor availability, impacting production efficiency and increasing costs. Sudden spikes in demand due to policies mandating palm oil blending in diesel have further strained supply chains, constraining growth compared to projections.

Opportunities and Competitive Landscape

The market remains highly competitive, with numerous players seeking a strategic advantage through increased production, enhanced distribution networks, and product quality improvements. Technology adoption, including satellite-based monitoring for deforestation, alongside government initiatives in countries such as Denmark and Western Europe, creates opportunities for sustainable growth. Rising consumer awareness of health benefits associated with palm oil further supports market expansion.

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Regional Insights

Asia-Pacific dominates the palm oil market, accounting for more than 71% of total revenue in 2021. High demand from the food and beverage sector, coupled with population growth and shifting dietary trends in countries such as India and China, drives this dominance. North America is anticipated to see rapid growth due to evolving dietary habits and increased demand from the food industry for premium products. The revenue generated from palm oil also significantly contributes to the GDP of producing nations like Indonesia and Malaysia, supporting economic development.

Nature and Product Insights

The conventional palm oil segment held over 99% of the market in 2021 due to low costs and widespread availability, particularly in low-income regions. Organic palm oil remains a niche segment, constrained by production costs and strict regulatory requirements, though growing consumer awareness may boost adoption. In terms of product type, fractionated palm oil dominated the market with over 39% revenue share, followed by crude palm oil (CPO), which contributes significantly to food and beverage applications due to its vitamin A content.

Application and End-Use Insights

Food and beverage applications account for over 65% of palm oil consumption, driven by increasing global population and expanding product lines. Personal care and cosmetics and biofuel segments are also experiencing growth, with the personal care industry projected to contribute substantially to global revenue by 2033. Biofuel applications are emerging as technology advances, offering environmentally friendly alternatives to conventional fuels.

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Key Market Players

ADM
Wilmar International Ltd.
Sime Darby Plantation Berhad
IOI Corporation Berhad
Kuala Lumpur Kepong Berhad
United Plantations Berhad
Kulim (Malaysia) Berhad
IJM Corporation Berhad
PT Sampoerna Agro
Tbk
Univanich Palm Oil Public Company Ltd.
Bakrie Sumatera Plantations tbk
Asian Agri

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