Palm Oil Market

• In November 2019, PT. Mahkota Group acquired a palm oil mill in South Sumatra, through subsidiary, PT Berlian Inti Mekar. This plant produces CPO based products such as cooking oil or olein and processing about 400 tons of palm kernel oil per day.

• In June 2021, Cargill is constructing a new $200 million coconut oil refinery in Lampung, Indonesia, which will speed the company's efforts to establish a sustainable palm supply chain and offer clients verified deforestation-free goods.

In this report, the Palm Oil Market has been segmented by Nature, Product, Application, End-use and Geography.

Palm Oil Market, Segmentation by Nature

The Palm Oil Market has been segmented by Nature into Organic and Conventional.

Organic
The organic palm oil segment is gaining steady traction, accounting for nearly 18% of the total market. Demand is driven by rising consumer preference for clean-label, chemical-free, and sustainably produced oils. This growth is further supported by expanding use in organic food products, personal care, and cosmetics.

Conventional
Conventional palm oil dominates the market with about 82% share, owing to its cost-effectiveness and widespread availability. It is extensively used in food processing, biofuels, and industrial applications. Despite sustainability concerns, its strong role in mass-market consumption continues to sustain demand worldwide.

Palm Oil Market, Segmentation by Product

The Palm Oil Market has been segmented by Product into Crude Palm Oil and Palm Kernel.

Crude Palm Oil
Crude palm oil dominates the market with nearly 75% share. It is widely used in food processing, edible oils, and as a raw material for biofuels and oleochemicals. Demand is supported by its cost-effectiveness, high yield, and increasing use in mass-market food products across emerging economies.

Palm Kernel
Palm kernel oil holds about 25% of the market and is valued for its high lauric acid content, making it essential in detergents, personal care, and cosmetics. It also plays a role in industrial applications such as surfactants and lubricants. Rising demand for bio-based raw materials continues to strengthen this segment’s growth.

Palm Oil Market, Segmentation by Application

The Palm Oil Market has been segmented by Application into Edible Oil, Cosmetics, Bio-Diesel, Lubricants, Surfactants and Others.

Edible Oil
Edible oil is the largest application, accounting for about 55% of palm oil demand. It is widely used in cooking, processed foods, and bakery & confectionery owing to its stability and neutral taste. Growth is supported by expanding packaged food consumption and affordability across emerging markets.

Cosmetics
Cosmetics represent roughly 10% of the market, leveraging palm-oil derivatives for emolliency, moisturization, and texture enhancement. They are utilized in skincare, haircare, and color cosmetics. Clean-beauty and bio-based ingredients trends continue to lift adoption.

Bio-Diesel
Bio-diesel applications hold around 15%, with palm oil converted into FAME biodiesel and used in transport blends. Demand tracks renewable mandates and decarbonization policies, while co-benefits include improved lubricity in fuel systems.

Lubricants
Lubricants account for approximately 7% of usage, where palm-based esters improve lubricity, biodegradability, and oxidation stability. Key end uses span metalworking fluids, hydraulic oils, and industrial greases seeking greener chemistries.

Surfactants
Surfactants contribute about 8%, utilizing palm-derived fatty alcohols and acids for foaming, wetting, and detergency. Applications include home & fabric care, hard-surface cleaners, and personal wash products.

Others
The “Others” category makes up nearly 5%, covering food additives, pharmaceutical excipients, candles, and specialty chemicals. Demand is niche but benefits from innovation in value-added derivatives.

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Palm Oil Market, Segmentation by End-use

The Palm Oil Market has been segmented by End-use Into Food Industry, Personal Care & Cosmetics Industry, Biofuel Industry, Pharmaceutical Industry and Others

Food Industry
The food industry is the largest end user, accounting for about 58% of palm oil demand. Palm oil is widely used in edible oils, bakery & confectionery, and processed foods due to its stability and versatility. Growth is supported by expanding packaged food consumption and cost-effective sourcing in emerging markets.

Personal Care & Cosmetics Industry
This segment represents roughly 12% of demand, using palm-derived ingredients for emolliency, moisturization, and texture enhancement. Applications span skincare, haircare, and color cosmetics. Clean-beauty trends and preference for bio-based ingredients continue to lift adoption.

Biofuel Industry
Biofuels account for around 17%, where palm oil is converted to FAME biodiesel for transport blends. Demand closely follows renewable mandates and decarbonization policies, with added benefits in fuel lubricity. Supply reliability and competitive pricing underpin usage in key blending markets.

Pharmaceutical Industry
The pharmaceutical segment holds approximately 6% share, leveraging palm derivatives as excipients, capsule materials, and emulsifying agents. Emphasis on quality compliance and consistent functionality supports steady demand. Growth remains linked to broader healthcare and nutraceutical expansion.

Others
“Others” contribute about 7%, covering surfactants, industrial lubricants, candles, and specialty chemicals. These applications prioritize cost-effectiveness and tailored performance from palm-based intermediates. Innovation in value-added derivatives is gradually widening the scope of use.

Palm Oil Market, Segmentation by Geography

In this report, the Palm Oil Market has been segmented by Geography into five regions; North America, Europe, Asia Pacific, Middle East & Africa and Latin America.

Palm Oil Market Share (%), by Geographical Region

North America
North America accounts for around 14% of palm oil demand, led by processed foods, packaged snacks, and select oleochemical uses. Growth is supported by steady foodservice recovery and niche personal care applications. Sustainability commitments are encouraging shifts toward certified supply across major brands.

Europe
Europe holds about 22% share, with demand concentrated in bakery, confectionery, and biodiesel blending. Tight regulatory standards and preference for certified sustainable palm oil shape procurement. Product development in clean-label foods and personal care keeps usage stable.

Asia Pacific
Asia Pacific leads with nearly 45% of the market, driven by large-scale edible oil consumption, expanding food processing, and proximity to plantations. Indonesia, Malaysia, China, and India anchor both supply and demand. Rising urban incomes sustain growth in packaged foods and HORECA.

Middle East & Africa
Middle East & Africa represent roughly 10%, with demand tied to household cooking, industrial soaps & detergents, and growing food manufacturing. Population growth and expanding modern retail support steady uptake amid import-dependent supply chains.

Latin America
Latin America contributes about 9%, led by Brazil, Mexico, and Colombia. Usage centers on food industry applications, with selective growth in biodiesel and oleochemicals. Distribution upgrades and innovation in value-added derivatives are widening regional adoption.

This report provides an in depth analysis of various factors that impact the dynamics of Global Palm Oil Market. These factors include; Market Drivers, Restraints and Opportunities.

Drivers, Restraints and Opportunity

Drivers:

• Versatility and Industrial Applications
• Productivity and Yield Advantages

• Global Economic Trends-Global economic trends significantly impact the dynamics of the global palm oil market. Economic growth in emerging markets, particularly in regions like Asia and Africa, has been a major driver of increased palm oil consumption. As these economies develop, there is a rising demand for processed foods, cooking oils, and personal care products, all of which rely heavily on palm oil. The growing middle-class population in these regions, with higher disposable incomes, further fuels this demand. Additionally, urbanization plays a crucial role, as it leads to a shift in dietary preferences towards convenience foods, which often contain palm oil as a key ingredient due to its affordability and functional properties.

  Conversely, economic downturns or fluctuations in major economies can impact palm oil demand and prices. During periods of economic uncertainty or recession, consumers may cut back on discretionary spending, affecting the consumption of processed foods and other palm oil-based products. Moreover, exchange rate fluctuations can influence the competitiveness of palm oil exports from major producing countries like Indonesia and Malaysia, which dominate the global market. Changes in global trade policies and tariffs also play a pivotal role in shaping the market landscape, impacting the flow of palm oil between regions and affecting pricing dynamics.

  Investments in infrastructure and logistics within palm oil-producing countries are crucial economic factors. Improvements in transportation networks and storage facilities can enhance supply chain efficiency, reducing costs and potentially boosting production volumes. Conversely, inadequate infrastructure can constrain production capacities and increase operational costs, thereby affecting market dynamics. Overall, understanding and responding to these economic trends are essential for stakeholders in the global palm oil market to navigate market fluctuations and capitalize on growth opportunities effectively.

Restraints:

• Health Concerns
• Market Volatility

• Supply Chain Issues-Supply chain issues in the global palm oil market encompass a range of challenges that impact production, distribution, and market stability. One significant issue revolves around the complexities of palm oil sourcing and production in tropical regions. These areas often face difficulties related to land rights, labor practices, and social conflicts. Conflicting land claims and disputes over indigenous land rights can lead to disruptions in palm oil supply chains, affecting both local communities and international stakeholders. Moreover, issues such as inadequate infrastructure and logistical challenges in remote production areas can hinder efficient transportation and distribution of palm oil products.

  Another critical aspect of supply chain issues in the palm oil market relates to sustainability and environmental impact. Deforestation and habitat destruction for palm oil plantations have drawn global scrutiny due to their detrimental effects on biodiversity and climate change. Regulatory efforts to curb deforestation often lead to stricter standards and certification requirements, which can pose compliance challenges for producers. Additionally, ensuring sustainable practices throughout the supply chain—from cultivation to processing and transportation—is essential to meet evolving consumer and regulatory expectations.

  The palm oil supply chain is susceptible to market-driven pressures and price volatility. Fluctuations in palm oil prices can impact profitability along the entire supply chain, influencing decisions on cultivation, investment, and export strategies. Market dynamics, including competition from alternative vegetable oils and changing consumer preferences, further complicate supply chain management. Adapting to these market shifts requires agility and strategic planning from stakeholders across the palm oil supply chain, including growers, processors, traders, and end-users.

  Addressing supply chain issues in the global palm oil market necessitates collaborative efforts among governments, industry players, and civil society. Promoting transparency, accountability, and responsible sourcing practices can help mitigate risks associated with supply chain complexities. Embracing sustainable agriculture practices, investing in infrastructure development, and supporting community engagement initiatives are integral to fostering a resilient and ethical palm oil supply chain. By addressing these challenges proactively, stakeholders can work towards a more sustainable and socially responsible palm oil industry globally.

Opportunities:

• Alternative Uses
• Emerging Markets

• Certification and Branding-Certification and branding initiatives play crucial roles in shaping the global palm oil market by addressing sustainability concerns and enhancing consumer trust. The Roundtable on Sustainable Palm Oil (RSPO) certification, for instance, establishes standards for sustainable palm oil production, including criteria for environmental responsibility, social equity, and economic viability. Companies certified by RSPO adhere to these standards, promoting transparency and accountability throughout the palm oil supply chain. This certification helps mitigate environmental impacts such as deforestation and biodiversity loss, crucial for meeting global sustainability goals.

  Branding efforts further amplify the impact of certification by creating market differentiation and consumer awareness. Brands that commit to using certified sustainable palm oil can attract environmentally conscious consumers who prioritize ethical sourcing and responsible production practices. Effective branding communicates a company’s commitment to sustainability, fostering brand loyalty and trust among consumers. Moreover, it incentivizes other stakeholders in the palm oil industry to adopt similar practices, thereby driving broader adoption of sustainable palm oil sourcing.

  In addition to RSPO, other certification schemes and initiatives focus on various aspects of sustainability and ethical production. These include certifications that address labor rights, land rights, and community engagement within palm oil-producing regions. By obtaining multiple certifications or adhering to stringent voluntary standards, companies can strengthen their market position, gain access to premium markets, and mitigate reputational risks associated with unsustainable practices. Ultimately, certification and branding initiatives not only support sustainable palm oil production but also contribute to the overall reputation and long-term viability of companies in the global palm oil market.

Palm Oil Market is defined by strong competition as producers, refiners, and distributors expand their global supply chains. Leading companies emphasize strategies such as collaboration, merger, and partnerships to enhance market reach. Nearly 65% of total production and trade is managed by established firms, ensuring steady growth through sustainability-focused innovation.

Market Structure and Concentration
The market exhibits a semi-consolidated profile, with about 55%–60% share held by top producers and integrated refiners. Smaller enterprises contribute niche innovation in specialty and certified sustainable palm oil. This competitive structure fosters expansion, as varied strategies are employed to meet demand from food, biofuel, and industrial applications.

Brand and Channel Strategies
Major players implement diversified strategies including direct supply agreements, retail distribution, and partnerships with consumer goods companies. Around 45% of revenues are influenced by partnerships with packaged food and cosmetics manufacturers. These collaboration efforts enhance brand credibility, ensure product traceability, and sustain growth across multiple end-use industries worldwide.

Innovation Drivers and Technological Advancements
More than 40% of companies invest in refining technologies, yield improvement, and supply chain transparency. Continuous technological advancements enhance quality, traceability, and efficiency, keeping innovation central to competitiveness. Strategic merger and R&D initiatives strengthen value chains, accelerating expansion into sustainable palm oil derivatives and eco-friendly industrial applications.

Regional Momentum and Expansion
Nearly 50% of expansion activities are concentrated in Asia-Pacific, supported by high consumption and large-scale plantations. Producers strengthen their presence through partnerships with local governments and refiners, while international firms align strategies with sustainability requirements. This regional momentum drives consistent growth, reinforcing the dominance of palm oil in key supply markets.

Future Outlook
The future outlook suggests that nearly 55% of industry growth will stem from sustainable certification, biofuel adoption, and supply chain digitalization. Companies will continue prioritizing collaboration, merger, and partnerships to strengthen market position. Ongoing technological advancements will foster further expansion, ensuring long-term competitiveness in the palm oil market.

Key players in Palm Oil Market include:

• Kala Gostaran Sabz Andish Co Ltd
• Middle East Gold Star Co
• Golbarg Baharan
• Savola Behshar Company
• Jahan Vegetable Oil Company

In this report, the profile of each market player provides following information:

• Company Overview and Product Portfolio
• Key Developments
• Financial Overview
• Strategies
• Company SWOT Analysis