Palm Oil Market

Palm Oil Market Size and Share:

The global palm oil market size was valued at USD 57.19 Billion in 2024. Looking forward, IMARC Group estimates the market to reach USD 77.54 Billion by 2033, exhibiting a CAGR of 3.42% during 2025-2033. Indonesia currently dominates the market, holding a significant market share of over 59.1% in 2024. The rising versatility and wide product application, rapid population growth, significant economic development, expanding middle class in emerging markets, cost effectiveness of palm oil production, and increasing awareness about its health benefits are some of the major factors propelling the market growth.

One of the primary drivers is its widespread use in the food industry, where it serves as a key ingredient in cooking oils, margarine, baked goods, and processed foods due to its versatility and long shelf life. Additionally, the rising global population and increasing urbanization have significantly boosted the demand for packaged and ready-to-eat foods, further expanding the need for palm oil. Another major factor is the growing use of palm oil in non-food applications such as cosmetics, soaps, and cleaning products. Its natural properties make it a desirable base ingredient in personal care and household items. The biofuel industry also contributes to demand, with many countries incorporating palm oil into biodiesel blends as part of renewable energy policies, especially in Indonesia and Malaysia.

Government support, favorable climatic conditions in Southeast Asia, and cost-efficiency compared to other vegetable oils strengthen its market position. For instance, in March 2025, according to Minister of State for Consumer Affairs, Food & Public Distribution Nimuben Jayantibhai Bambhaniya, the Union government launched the National Mission on Edible Oils–Oilseeds (NMEO-OS) with an investment of Rs 10,103.38 crore to increase domestic oilseed production from the current 39 million tonnes to 70 million tonnes by 2030–31. With an emphasis on the northeastern states, the government has also started the NMEO-Oil Palm initiative to encourage oil palm planting and help the nation self-sufficient in edible oils. As a result of the program, an additional 6.5 lakh hectares will be planted with oil palm. However, environmental concerns and regulatory changes related to deforestation and sustainable sourcing are prompting shifts toward certified sustainable palm oil. Technological advancements in cultivation and processing also contribute to improved yields and quality, helping to meet global demand efficiently and competitively.

Palm Oil Market Trends:

Expanding Food and Beverage Industry

Palm oil is widely used in the food and beverage industry for its versatile properties, including its neutral flavor, high smoke point, and high oxidative stability. The expanding food and beverage industry is offering lucrative growth opportunities to the overall market. For instance, total revenue in the Indian food and beverage industry is expected to show an annual growth rate (CAGR 2022-2027) of 14.94%, resulting in a projected market volume of US$ 30.75 Million by 2027. With the expansion of the food and beverage industry, the worldwide production of palm oil has also increased in volume to meet demand. For instance, Indonesia, the leading producer of palm oil, recorded 45.5 million metric tons of palm oil produced in 2022-2023. Besides this, the escalating utilization of palm oil in producing processed and ready-to-cook meals like instant noodles and frozen food snacks is positively impacting the palm oil market outlook. For instance, according to IMARC, the global instant noodles market size reached US$ 55.4 Billion in 2023. Looking forward, IMARC Group expects the market to reach US$ 82.6 Billion by 2032, exhibiting a growth rate (CAGR) of 4.4% during 2024-2032. The rising preference for ready-to-cook food items on account of hectic work schedules is anticipated to further propel the market growth.

Increasing Production of Biofuel

Palm oil is a significant feedstock to produce biofuels, particularly biodiesel. Palm oil-based biodiesel is a renewable energy source that helps reduce dependency on fossil fuels, contributing to energy security and diversification of energy sources. The government authorities of various nations are promoting the use of biofuels as alternatives to fossil fuels, which is bolstering demand for palm oil, particularly in regions with biofuel mandates and incentives. For instance, India's Ministry of Petroleum and Natural Gas published its "National Policy on Biofuels" in 2018 and further amended it in June 2022. The policy's objective is to reduce the import of petroleum products by fostering domestic biofuel production. In response to such initiatives, various biofuel manufacturers are increasingly investing in expanding their operations, which is creating a positive outlook for the overall market. For instance, in July 2022, Eni Kenya B.V. completed the construction of the oilseed collection and pressing plant (agri-hub) in Makueni, Kenya, and started production of the first vegetable oil for bio-refineries. According to the company, the first agri-hub had a capacity of 15,000 tons, with an expected output of 2,500 tons in 2022. As a result, numerous programs launched by governing bodies of various nations to promote bio-based goods like palm oils are anticipated to bolster the palm oil market size in the coming years.

Growing Demand for Fortified Palm Oil

Fortified palm oil provides essential vitamins such as vitamin A and vitamin D, which are crucial for overall health and well-being. Additionally, as consumer preferences shift towards healthier food options, the demand for fortified palm oil is rising. Fortifying cooking oils can aid people in consuming 25% to 30% more vitamin D and A than is required. Several nations have started large-scale initiatives to promote the fortification of staple foods, especially oils, in response to growing consumer health awareness. According to the palm oil market forecast, concerned government authorities are also acknowledging the importance of food fortification and its potential to support the achievement of international nutrition targets, which is bolstering the palm oil market share. For example, the Food Safety and Standards Authority of India (FSSAI) published a proposal in 2021 calling for the mandatory fortification of cooking/edible oil with vitamins A and D to strengthen immunity and combat malnutrition, particularly deficits in micronutrients. Various palm oil manufacturers are also following sustainable practices and increasingly investing in the development of palm oils that are high in nutrition. For instance, in October 2023, KTC Edibles, the UK’s largest supplier of edible oils, launched Planet Palm, a new range of certified sustainable, traceable, and responsibly sourced palm oil products for food manufacturers in the UK. Similarly, in September 2021, BASF West Africa teamed up with EDCEL Limited and launched the Vitamin A premix for edible oils. Such initiatives are anticipated to propel the palm oil market sales & revenue in the coming years.

Palm Oil Industry Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the global palm oil market, along with forecasts at the global and regional levels from 2025-2033. The market has been categorized based on application.

Analysis by Application:

• Household Cooking
• Food & Beverages
• Oleo Chemicals
• Personal Care
• Animal Feed
• Bio-fuel

Household cooking stands as the largest application in 2024, holding around 34.8% of the market. The ubiquity of palm oil in household kitchens across the globe is a primary driver. It is a staple cooking oil in many cultures due to its affordability, neutral flavor, and versatility. Palm oil's semi-solid state at room temperature makes it ideal for frying, sautéing, and baking, enhancing the taste and texture of a wide array of dishes. Its widespread availability and affordability further cement its place as a preferred choice for cooking purposes in households. Additionally, the sheer size of the global population necessitates a substantial volume of cooking oil. As more people gain access to kitchens and start cooking at home, the demand for cooking oils like palm oil naturally rises. The world's growing middle class, particularly in emerging markets, contributes significantly to this trend as they increasingly opt for home-cooked meals.

Regional Analysis:

• India
• Indonesia
• China
• European Union
• Malaysia
• Others

In 2024, Indonesia accounted for the largest palm oil market share of over 59.1%. According to palm oil industry statistics by IMARC, Indonesia is the largest producer of palm oil in the world. The tropical climate of the country and vast expanses of suitable land makes it exceptionally conducive to palm oil cultivation. Indonesia is the leading producer of palm oil. The country recorded 45.5 million metric tons of palm oil produced in 2022-2023. Moreover, the favorable growing conditions, combined with the availability of a skilled labor force, enable Indonesia to produce a substantial quantity of palm oil, which, in turn, influences its dominance in the market. Additionally, the Indonesian government has actively supported the palm oil industry through policies and incentives, fostering palm oil market value. For instance, established in 2012, the Sustainable Palm Oil (SPO) Initiative is an alliance between the Government of Indonesia (GoI), the United Nations Development Program (UNDP), the private sector, and other non-government partners that aims to address key challenges in Indonesia's palm oil sector such as deforestation and improving the livelihoods of smallholder farmers. Moreover, Indonesia's strategic geographic location enables efficient export to key markets, such as China and India, both of which have high demand for palm oil.

Key Regional Takeaways:

India Palm Oil Market Analysis

The India palm oil market is primarily driven by the increasing consumption of processed and packaged foods. According to an industry report, a minimum of 38% of the Indian population consumed unhealthy foods, and the proportion of packaged, highly processed, and calorie-dense items in household food budgets nearly doubled, rising from 6.5% to 12% during the same period. In line with this, rapid expansion of the organized foodservice sector is also encouraging the higher uptake of the oil across commercial kitchens. Furthermore, supportive government initiatives to support domestic refining capacity and reduce reliance on imports are influencing market dynamics. The growing adoption of palm-based oleochemicals in personal care and home care formulations is further expanding market scope. Similarly, rising disposable incomes increasing demand for affordable cooking oils among middle-income households, is propelling the palm oil market growth. The transition toward bio-based industrial inputs fostering the use of palm oil in non-food applications, is strengthening market demand. Additionally, rise in digital retail platforms enhancing product accessibility across tier 2 and tier 3 cities, is stimulating market appeal. Besides this, favorable trade agreements with Southeast Asian exporters helping ensure consistent import flows, is impacting the market trends.

Indonesia Palm Oil Market Analysis

The Indonesia palm oil market is advancing due to the country’s well-established plantation infrastructure. According to the UN, the palm oil sector is generating 4.5% of its GDP and giving employment to 3 million people in the country. In accordance with this, favorable agro-climatic conditions supporting year-round cultivation and high yield output, is propelling the market growth. Furthermore, strong government backing through replanting programs and export incentives is reinforcing production efficiency and international market competitiveness. Similarly, rising demand from fast-growing regional economies continuously sustaining robust export volumes, is supporting market expansion. Strategic investments in logistics and storage infrastructure improving supply chain integration and delivery timelines, is impelling the market. Additionally, the expansion of downstream processing industries, including biodiesel, oleochemicals, and specialty fats, is fostering value addition within domestic markets. Moreover, the mandatory biodiesel blending policy ensuring stable domestic offtake, is anchoring demand beyond traditional food applications, thereby creating lucrative market opportunities.

China Palm Oil Market Analysis

The market in China is progressing attributed to a strong demand from the food processing sector, particularly in the production of instant noodles, bakery items, and snack foods. Similarly, the steady growth of urbanization leading to lifestyle changes that favor the consumption of ready-to-eat and convenience foods, is bolstering market development. As such, E-commerce platforms such as JD recorded a significant sales increase of over 120% in ready-to-eat meals between 2021 and 2023. Furthermore, the rising imports for industrial applications, including oleochemicals and surfactants, are contributing to volume growth in the market. Competitive pricing of palm oil compared to other vegetable oils ensuring its continued preference among manufacturers, is expanding the market reach. Additionally, growth in e-commerce platforms facilitating wider product availability and streamlined distribution, is enhancing market appeal. Apart from this, various trade partnerships with major Southeast Asian producers ensuring a stable and cost-effective supply base for China’s refining and processing industries, is providing an impetus to the market.

European Union Palm Oil Market Analysis

The European Union palm oil market is witnessing growth due to the growing demand for palm oil in the food industry, particularly in processed foods and bakery products. Similarly, the increasing use of palm oil in the biofuels sector, especially for renewable energy production, is fostering market expansion. Additionally, the expansion of trade agreements between European Union and palm-producing countries ensuring a steady supply of palm oil is bolstering the market development. Furthermore, the ongoing innovations in palm oil processing technology continue to improve sustainability and quality, thereby positively influencing the market. Moreover, growing awareness of palm oil’s role in achieving sustainable development goals is stimulating the market appeal. According to an industry report, Europe is the largest consumer of certified sustainable palm oil globally, accounting for 45% of consumption. Besides this, strict European regulations, such as the EU’s Renewable Energy Directive, is encouraging the adoption of sustainable palm oil.

Malaysia Palm Oil Market Analysis

The country’s advanced refining and processing infrastructure supports the Malaysian market, enhancing its role as a key global supplier of high-grade palm derivatives. In addition to this, rising demand from the global halal-certified food sector is augmenting exports of compliant palm-based ingredients, is fostering market expansion. Besides this, strategic government initiatives, including labor policy reforms and mechanization incentives, aimed at addressing productivity constraints, is impelling the market. Effective February 1, 2025, Malaysia's minimum monthly wage will rise from RM1,500 to RM1,700, covering all employment types. Furthermore, sustained procurement by key markets in South Asia and the Middle East reinforcing Malaysia’s position in international trade flows, is influencing the market dynamics.

Competitive Landscape:

The global palm oil market is intensely competitive, dominated by major players such as Wilmar International, Cargill, Sime Darby Plantation, Golden Agri-Resources, and Musim Mas. These companies maintain a strong presence through vertical integration, large-scale plantations, and strategic partnerships. Sustainability certifications like RSPO and environmentally responsible sourcing practices are increasingly vital for maintaining market access, especially in Europe and North America. Competition is also shaped by regional policies, particularly in Indonesia and Malaysia, which control most of the global production. Price volatility due to climate, labor availability, and global demand-supply dynamics further influences competitiveness. Innovation in refining processes and diversification into biodiesel and personal care sectors also differentiates players in this evolving market landscape.

The report provides a comprehensive analysis of the competitive landscape in the palm oil market with detailed profiles of all major companies, including:

• Archer-Daniels-Midland Company
• Asian Agri
• Boustead Holdings Berhad
• IJM Corporation Berhad
• IOI Corporation Berhad
• Kuala Lumpur Kepong Berhad
• Kulim Malaysia Berhad (Johor Corporation)
• PT Dharma Satya Nusantara Tbk
• PT PP LONDON SUMATRA INDONESIA TBK
• PT Sampoerna Agro Tbk
• PT. Bakrie Sumatera Plantations tbk
• Sime Darby Plantation Berhad
• United Plantations Berhad
• Univanich Palm Oil Public Company Ltd.
• Wilmar International Ltd.

Latest News and Developments:

• January 2025: Hindustan Unilever Limited (HUL) approved the acquisition of Vishwatej Oil Industries' palm undertaking in Telangana. This move supports HUL’s palm localisation strategy to reduce import dependence, enhance supply chain resilience, and contribute to India’s National Mission on Edible Oils through sustainable farming practices.
• July 2024: RSPO and IVPA signed an MoU to promote sustainable palm oil cultivation and imports in India. With India importing 9 million tonnes annually, efforts focus on awareness, policy advocacy, and increasing domestic production under NMEO-OP. RSPO membership in India grew 20%, reaching 118 entities.
• May 2024: Leading geospatial intelligence AI technology firm Dabeeo commenced its latest AI monitoring project of palm oil farms in Indonesia. The company inked a deal with Tunas Sawa Erma Group, one of Indonesia's major palm oil producers, for the project, spanning across a total of 765 square kilometers.
• May 2024: India's first integrated Oil Palm Processing Unit by 3F Oil Palm started its commercial operations. This integrated Oil Palm project includes a cutting-edge oil palm factory (Palm Oil Processing and Refinery), a zero-discharge effluent plant, a palm waste-based power plant, and additional structures and go-downs for support purposes. This factory marks the first Oil Palm factory in Arunachal Pradesh and India's first Oil Palm Factory under NMEO-OP.
• January 2024: Karnataka-based MK Agrotech, an edible oil and food company, and M11 Industries announced the launch of an oil palm plantation program in Odisha. The company signed a memorandum of understanding (MoU) with the Government of Odisha under the National Mission on Edible Oils–Oil Palm (NMEO-OP).

Palm Oil Market Report Scope:

Key Benefits for Stakeholders:

• IMARC’s report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the palm oil market from 2019-2033.
• The research study provides the latest information on the market drivers, challenges, and opportunities in the global palm oil market.
• The study maps the leading, as well as the fastest-growing, regional markets.
• Porter's Five Forces analysis assists stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the palm oil industry and its attractiveness.
• Competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market.