Mexico Palm Oil Market Size & Forecast 2025–2033: Demand Surges Across Food, Biofuel & Personal Care Sectors

The Mexico Palm Oil Market is on a steady upward trajectory, driven by rising industrial applications, affordability, and growing interest in renewable energy. According to Renub Research, the market is forecast to reach US$ 1,692.52 million by 2033, expanding from US$ 1,187.09 million in 2024, reflecting a CAGR of 4.02% during 2025–2033. The increase is fueled by growing consumption in the food processing, cosmetics, animal feed, and biofuel sectors, alongside evolving dietary patterns and rapid urbanization.

As Mexico works to strengthen both domestic agricultural production and sustainable energy solutions, palm oil has emerged as a versatile commodity bridging economic, industrial, and environmental needs. Yet, the path ahead is marked by challenges—particularly sustainability concerns and dependency on imports. Still, as trends shift and industry investments grow, palm oil is becoming an increasingly indispensable part of Mexico’s consumption and production landscape.

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Mexico Palm Oil Market Outlook

Palm oil, extracted from the fruit of the oil palm tree (Elaeis guineensis), is one of the world’s most consumed edible oils, prized for its high yield, versatility, and thermal stability. Naturally semi-solid at room temperature, it is ideal for cooking, baking, food manufacturing, and a broad range of industrial uses.

Globally, palm oil is found in everyday consumer goods—instant noodles, bakery items, margarine, snacks, soaps, detergents, lotions, and biodiesel. In Mexico, the oil’s rising popularity is tied to:

Affordability compared to other vegetable oils

Longer shelf life, ideal for processed foods

Ability to withstand high heat in cooking and frying

Growing use across personal care and oleochemical industries

Mexico currently uses far more palm oil than it produces. However, regions in the south—primarily Chiapas, Tabasco, and Campeche—are now seeing increased plantation development encouraged by government incentives aimed at supporting rural incomes and reducing import dependency.

Even with sustainability concerns and market fluctuations, demand continues to grow due to expanding industrial applications and modernization of consumer lifestyles.

Key Growth Drivers in the Mexico Palm Oil Market

1. Rising Food Processing Industry

The most significant driver of the Mexican palm oil market is its widespread use in the packaged and processed food sector, which has expanded rapidly due to urbanization and fast-changing diets. Palm oil’s benefits include:

High heat stability—ideal for frying snacks and convenience foods

Neutral taste and odor for mass food manufacturing

Longer shelf life, which appeals to retailers and processors

As more Mexican consumers rely on ready-to-eat meals, bakery items, and snacks, food manufacturers increasingly choose palm oil as their primary ingredient.

2. Government Support for Domestic Palm Oil Production

To reduce reliance on costly imports, the Mexican government is empowering palm cultivation, particularly in southern regions. Through incentives, agricultural financing, and rural development schemes, the government is supporting domestic producers.

A major milestone occurred in December 2024, when IDB Invest financed US$ 15 million for the sustainable palm oil firm Prolade S.A.P.I. de C.V., which holds RSPO certification. The move underscores the country’s push toward certified sustainable production while strengthening rural livelihoods.

Increased domestic production is expected to enhance supply chain stability and reduce market vulnerability to global price volatility.

3. Increased Demand for Biofuels and Clean Energy

As Mexico pivots toward renewable energy sources, palm oil-derived biodiesel is gaining traction. Supporting this momentum is the country’s goal to increase clean electricity generation.

In May 2025, studies showed that Mexico’s 45% clean electricity target by 2030 could save US$ 1.6 billion annually by reducing dependence on imported U.S. natural gas. Palm oil, as a biodiesel feedstock, now plays a critical role in the broader sustainable energy transition.

Growing investments in biodiesel refineries and sustainable energy programs are expected to further boost demand in this segment.

Key Challenges in the Mexico Palm Oil Market

1. Environmental and Sustainability Concerns

Like many countries, Mexico faces global scrutiny regarding palm oil sourcing due to issues such as:

Deforestation

Biodiversity loss

Soil and water degradation

Stakeholders increasingly demand sustainably sourced palm oil, often through RSPO certification. While progress is underway, shifting to ethical, traceable, and environmentally responsible production can raise operational costs for producers and manufacturers.

2. Import Dependency and Market Volatility

Despite growing domestic production, Mexico still imports large quantities—primarily from Indonesia and Malaysia. This creates exposure to:

Fluctuating global prices

Foreign exchange volatility

Diplomatic shifts

Shipping and logistical disruptions

Smaller industries relying on palm oil as a core input often struggle to cope with sudden cost volatility.

Segment by Segment: Mexico Palm Oil Market Landscape

Mexico Palm Oil Home Cooking Market

Palm oil is increasingly popular as an affordable cooking oil, especially in low- and middle-income households. It is commonly used for:

Frying

Sautéing

Baking

Retailers offer both refined and blended palm oils, appealing to cost-conscious consumers and those seeking stable, high-heat cooking options. Wider acceptance as a household oil will continue to expand this segment.

Mexico Biofuel Palm Oil Market

The biodiesel industry represents a high-growth, long-term sector for palm oil in Mexico. The government’s focus on energy independence, reduced emissions, and rural development is intensifying interest in palm-based biodiesel.

Southern Mexico’s palm-growing regions stand to benefit the most as investment in biodiesel facilities grows.

Mexico Personal Care Palm Oil Market

Palm oil and its derivatives—such as palm kernel oil and fatty acids—are widely used as moisturizing and stabilizing agents in:

Soaps

Shampoos

Body lotions

Face creams

Cosmetics

With Mexican consumers becoming more wellness- and beauty-conscious, demand for natural and plant-based ingredients is rising. Both international and domestic brands are shifting to sustainably certified palm oil to meet consumer expectations.

Mexico Animal Feed Palm Oil Market

Palm oil and its by-products, especially palm kernel cake, are valuable ingredients in poultry and livestock feed due to:

High energy density

Improved animal performance

Better feed efficiency

As livestock and poultry production expand nationwide, the use of palm-derived feed ingredients is increasing, making this a steadily growing application area.

Regional Insights: Mexico Palm Oil Market

Northern Mexico

Although unsuitable for cultivation due to arid conditions, northern Mexico is a major consumption region. Strong demand comes from:

Urban households

Food manufacturers

Retail chains

Cities like Monterrey and Hermosillo are key markets, supported by established import and distribution networks.

Central Mexico

Home to major urban centers such as Mexico City and Guadalajara, this region accounts for a large portion of total consumption. The region benefits from:

High population density

Vibrant foodservice and hospitality sectors

Strong logistics connectivity

Central Mexico is a core hub for distribution and industrial processing.

Southern Mexico

The powerhouse of Mexico’s domestic palm production, southern states like Chiapas, Tabasco, and Campeche offer ideal climate conditions and receive strong government support.

The region is also benefiting from:

New refining facilities

Infrastructure development

Investments in sustainable cultivation

As a result, southern Mexico is expected to remain the center of palm oil production and a driver of national growth.

Market Segmentation

By Application

Household Cooking

Food & Beverages

Oleo Chemicals

Personal Care

Animal Feed

Biofuel

By Region

Northern Mexico

Central Mexico

Southern Mexico

Others

Key Companies Covered

(Each with 5 viewpoints: overview, key person, recent developments, SWOT, revenue analysis)

Archer-Daniels-Midland Company

Boustead Holdings Berhad

IJM Corporation Berhad

IOI Corporation Berhad

Kulim Malaysia Berhad (Johor Corporation)

Sime Darby Plantation Berhad

United Plantations Berhad

Univanich Palm Oil Public Company Ltd.

Final Thoughts

The Mexico Palm Oil Market is entering a transformative phase fueled by industrial expansion, renewable energy investments, and supportive government policies. While sustainability challenges and import dependence remain obstacles, Mexico is gradually building a more resilient palm oil ecosystem through regional development and certified sustainable practices.

With growing demand across food processing, personal care, animal nutrition, and clean energy, palm oil will continue to play a central role in Mexico's industrial and agricultural future. As domestic production expands and stakeholders embrace ethical sourcing, the market’s long-term outlook remains positive—making palm oil a strategic commodity to watch in the coming decade.