The global palm oil market is expected to grow from USD 76.8 billion in 2025 to USD 119.1 billion by 2035, reflecting a CAGR of 4.5%. This growth is supported by palm oil’s widespread use across food, cosmetics, pharmaceuticals, and biofuel industries.
Attributes | Description |
---|---|
Estimated Market Size (2025E) | USD 76.8 billion |
Projected Market Value (2035F) | USD 119.1 billion |
Value-based CAGR (2025 to 2035) | 4.5% |
As one of the most efficient and versatile vegetable oils, palm oil remains in high demand due to its low cost of production and long shelf life. Expanding populations, rising urbanization, and increasing consumption of processed foods are key drivers of continued global demand.
Innovations in sustainable cultivation and processing are reshaping the palm oil industry. Advancements in yield improvement, satellite-based plantation monitoring, and precision agriculture are reducing environmental impact and improving efficiency. The development of certified sustainable palm oil (CSPO) through bodies like RSPO (Roundtable on Sustainable Palm Oil) is helping meet growing consumer and regulatory expectations for ethical sourcing. Additionally, palm oil derivatives are increasingly used in biodegradable products and renewable energy applications, broadening market potential.
Regulations play a critical role in shaping the global palm oil trade. Many countries enforce import standards related to deforestation, labor practices, and sustainability certifications. In the EU, for instance, the Deforestation Regulation mandates strict traceability requirements for palm oil imports.
Similarly, nations like Indonesia and Malaysia-the largest producers-are adopting stricter environmental and labor policies to align with global sustainability goals. Compliance with international standards will remain crucial for market access and long-term industry viability.
The global palm oil market is projected to reach USD 76.8 billion in 2025. In the edible oils market, palm oil accounts for approximately 30-32%, making it the most widely consumed vegetable oil globally. It contributes around 60-63% to the edible oil-derived fats and shortenings segment due to its versatility, shelf stability, and cost-effectiveness.
In the broader food and beverage ingredients market, palm oil holds a 2-3% share, being a common component in processed foods, snacks, and baked goods. It makes up about 5-7% of the biofuel feedstock market, especially in biodiesel production. In the personal care and cosmetics ingredients market, palm oil comprises roughly 4-5%, used in soaps, creams, and skincare products.
Germany is expected to be the fastest-growing market for palm oil, with a projected CAGR of 5.0% from 2025 to 2035. The food and beverage sector will dominate the application segment, accounting for 73.1% of the market share in 2025. Biofuels, personal care, and industrial applications will collectively represent the remaining 26.9%. Overall, the palm oil market is projected to grow at a CAGR of 4.5%.
A comparison analysis is as below for a six-month fluctuation in the CAGR of the base year (2025 and 2024 respectively) of the global palm oil industry. It is a sudden change in performance and further illustrates realization of revenue trend and thus allows stakeholders to form a wise opinion about the growth trend of the year. H1 or the first half-year is January to June. The second half, H2, is July to December.
Particular | Value CAGR |
---|---|
H1 (2024 to 2034) | 4.2% |
H2 (2024 to 2034) | 4.3% |
H1 (2025 to 2035) | 4.3% |
H2 (2025 to 2035) | 4.5% |
During the first half (H1) of the period 2025 to 2035, the company will have a growth of 4.3%, and in the second half (H2) of the same period at an even greater rate of 4.5%. Carrying this momentum into the second phase, H1 2025-H2 2035, CAGR will be likewise healthy at 4.3% during H1 and barely more at 4.5% in H2. The industry grew by 10 BPS during H1, while company growth stood at 20 BPS in H2.
This long-term development is not solely due to escalating demand from high-income economies but also escalating interest in sustainability, regulatory change, and process advancement in palm oil production. Any suppliers who are capable of positioning themselves as being green and sustainable will be strongly placed to take share in this fast-moving marketplace.
Expansion within the palm-oil sector is being guided by steady demand from food processors, oleochemical manufacturers, and biofuel blenders, while portfolio diversification and traceable supply chains are being emphasized to satisfy evolving regulatory and consumer expectations.
The conventional palm-oil segment is projected to dominate overall supply, with a 91.2% share anticipated for 2025. Large-scale estates in Indonesia and Malaysia are being leveraged for cost-efficient output, and refined downstream networks are being utilized to meet global shipment schedules.
Agronomic improvements, including clonal seedlings and optimized fertilizer regimes, are being adopted to lift per-hectare yields without immediate expansion of cultivated land. Price stability is being pursued through forward contracts with multinational food conglomerates. Certification schemes are being implemented by producers to address traceability goals set by major importing blocs, thereby preserving market access and reinforcing demand for conventionally sourced palm oil.
Crude palm oil (CPO) is expected to secure 49.3% of the product-type segment by 2025, supported by robust requirements for further refining into specialty fats, oleins, and stearins. Bulk CPO cargoes are being routed through dedicated tank farms near strategic deep-water ports, allowing economies of scale for processors in South-East Asia. Degumming, bleaching, and deodorization capacities are being expanded to handle higher incoming volumes.
Futures markets are being utilized by traders to hedge pricing volatility linked to weather swings and labor availability. Upstream residues are being redirected into bio-energy generation, allowing operational footprints to be reduced while offsetting refinery utility costs.
The food-and-beverage category is anticipated to consume 62.9% of palm-oil output in 2025, owing to its versatile functionality in frying, shortening, and specialty fat applications. Reformulation of snacks, confectionery, and ready-meal lines is being undertaken to replace trans-fats with palm-based alternatives that deliver suitable melting ranges and oxidative stability. Large bakery chains are entering long-term supply contracts to secure consistent quality and mitigate input-cost fluctuations.
Food-service operators are adopting bulk palm-olein systems for high-temperature frying, extending oil life and reducing waste. Clean-label trends are being addressed by processors through enzymatic interesterification, enabling palm-derived ingredients to meet modern nutritional guidelines.
Organized Segment - Large Palm Oil Producers and Suppliers, The organized segment is controlled by the vertically integrated large multinationals with a firm grip over consistent quality, worldwide reach, and sustainability. They have huge palm plantations, refinery in the plants, and supply of finished palm oil products to industry.
Wilmar International (Singapore/Global Presence), Global palm oil production leader and the whole value chain from plantation to processing and distribution. It is focused on RSPO-certified sustainable palm oil. Sime Darby Plantation (Malaysia) owns the world's largest palm estates, spread over Indonesia and Malaysia, and the world's biggest sustainable palm oil producer is Sime Darby.
Sime Darby explores and develops (R&D) palms for enhanced yields and engages in green methodologies. IOI Corporation (Malaysia): Specialist fat producer and palm oil refiner for generations, IOI Corporation is a food manufacturer supplier, personal care supplier, and biofuel producer supplier. It has market leadership in Europe and Asia and is the world palm oil export leader.
Unorganized Segment - Regional Suppliers and Small-Scale Producers, The organized producer category comprises independent palm oil mills, smallholder farmers, and local traders and is localized in Indonesia, Malaysia, Thailand, and Africa. The producers do not have direct links with export markets but are part of local palm oil supply chains.
Felda Global Ventures (Malaysia): Smaller than corporate rivals, Felda Global Ventures is a market leader in Malaysia's palm oil business, processing crude palm oil (CPO) and palm kernel oil into local products. PT Astra Agro Lestari (Indonesia): Growing Indonesian palm oil company Astra Agro Lestari operates medium-sized plantations and mills and ships raw palm oil to larger refiners. SIPEF, Indigenous-owned plantation group with plantations in Sumatra, SIPEF is a foodstuff manufacturer and specialty ingredient supplier of premium grade palm oil.
The following table shows the estimated growth rates of the top five territories expected to exhibit high consumption of palm oil through 2035.
Countries | CAGR 2025 to 2035 |
---|---|
USA | 4.5% |
Germany | 5.0% |
China | 3.4% |
Japan | 3.7% |
India | 4.0% |
Demand for sustainably sourced, non-GMO, and trans-fat-free edible oils is growing even as the USA palm oil market grows. Despite its increasing use in refined foods, baked goods, and plant-based products, palm oil is still commonly used in the food industry.
The trend towards using RSPO-certified (Roundtable on Sustainable Palm Oil) and fair-traded palm oil in products is additional driving force of demand for low-carbon, organic and ecologically sustainable palm oil formulations. The USA market is also innovating strongly with applications in biofuels, personal care products, and dairy alternatives.
As governments are pushing deforestation-free palm oil sourcing so companies are investing more into tracing their palm oil supply chains, regenerative agriculture methods, and sustainable refining methods.
Germany is experiencing continuous growth in its palm oil market, motivated by evolving this EU sustainability legislation, rising consumer preference for palm oil-free and fair-trade products, and tough import mechanisms regarding deforestation-related palm oil. Proponents of the free palm oil market argue that the demand for certified organic palm oil alternatives is fueled by the growing consumption of plant-based foods, specialty cosmetics, and bio-based lubricants.
With increasing interest in carbon-neutral palm oil sourcing is increasing, making German manufacturers invest in deforestation-free supply chains, bio-based palm derivatives, as well as, palm kernel oil applications with regards to personal care and industrial use.
China’s palm oil market is accelerating in line with growing demand for bulk edible oil processing, bulk edible oil processing for instant noodles and confectionery, and the growing production of palm-based biodiesel. Refined palm oil and palm olein variants are in high-demand as a result, due to the development of the packaged food industry, fast food chains and margarine production.
Due to government policies promoting sustainable palm oil imports, palm oil refining technologies, palm. Emulsifiers, and high-oleic palm fractions for food and non-food applications are focusing in the palm oil refining manufacturers in China.
Japan’s palm oil market is driven by Japan’s emphasis on high-quality, functional food-grade oils as well as specialty industrial usage. However, Japanese consumers believe low-saturated fat palm oil variants, enzymatically processed palm fractions and RSPO-certified sustainable palm oil are ideal for cosmetics, pharmaceuticals and premium food products.
Demand for custom palm oil mixtures with enhanced oxidative stability and sensory characteristics is expected to increase in Japan, as it utilizes fractionation and enzymatic methods to process palm oil.
India’s palm oil market is growing due to rising demand for cheap edible oils, its greater use in packaged foods and policy support from the government for domestic production and imports of palm oil. It is estimated that the use of palm oil in instant snacks, deep-frying, and bakery formulations and its production will increase very rapidly.
Indian corporations are investing in low-cost supply chains, high-yield palm oil processing and fortified palm oil production with government incentives for palm oil self-sufficiency and domestic refining.
The palm oil market is moderately consolidated, with major agribusinesses such as Archer Daniels Midland, Wilmar International, Sime Darby Plantation, IOI Corporation, Kuala Lumpur Kepong, Kulim, IJM, PT Sampoerna Agro, Univanich, and others playing dominant roles. Production is vertically integrated-spanning plantation, milling, refining, and distribution.
These companies focus on enhancing operational efficiency, sustaining supply alongside biofuel mandates, and implementing certifications like RSPO to meet sustainability demands. Innovation is driven by traceability systems, eco-friendly practices, and expansion into broader product lines (food, oleochemicals, biofuels). The Asia-Pacific region remains the hub of production and consumption, with Indonesia and Malaysia supplying about 85% of global output.
Recent Palm Oil Industry News
In Dec 2024, Wilmar entered an option agreement with Adani Commodities LLP to acquire up to 31.06% of Adani Wilmar (AWL), with plans to make it a wholly owned subsidiary, enhancing its foothold in India’s edible oil sector
The market is categorized into organic and conventional palm oil, catering to different consumer preferences and industry requirements.
The industry offers various types of palm oil, including Crude Palm Oil (CPO), Refined, Bleached, and Deodorized (RBD) Palm Oil, Palm Kernel Oil, and Fractionated Palm Oil, each serving distinct purposes.
Palm oil is widely used across multiple industries, such as food & beverages, personal care & cosmetics, pharmaceuticals, biofuel & energy, and other applications, emphasizing its versatility.
The market is segmented as North America, Latin America, Western Europe, Eastern Europe, East Asia, South Asia & Pacific, Central Asia, Russia and Belarus, Balkan & Baltic Countries, Middle East and Africa.
The global palm oil industry is projected to reach USD 76.8 billion in 2025.
The industry is forecasted to grow at a CAGR of 4.5%.
Asia-Pacific is expected to dominate due to high demand for edible oils and biofuels.
Key drivers include rising demand for processed foods, biofuels, and sustainable palm-based ingredients.
Companies are investing in RSPO-certified palm oil, zero-deforestation commitments, and regenerative agriculture.
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