Global Palm Oil Market Poised to Reach USD 88.84 Billion by 2033: Balancing Growth, Sustainability, and Innovation

Global Palm Oil Market Overview

The Palm Oil Market is expected to reach US$ 88.84 billion by 2033, rising from US$ 61.19 billion in 2024, registering a CAGR of 4.23% from 2025 to 2033, according to Renub Research.

Palm oil is among the most vital and versatile edible oils globally, derived from the fruit of the oil palm tree. Its widespread use in food, cosmetics, pharmaceuticals, industrial products, and biofuels makes it indispensable to modern economies. As a result, palm oil represents one of the largest segments of the global vegetable oil market.

Indonesia and Malaysia dominate the world’s palm oil production, collectively accounting for nearly 85% of total output. Due to its high yield per hectare and cost efficiency, palm oil is preferred over soybean, sunflower, or rapeseed oils, enabling producers to meet rising global demand efficiently. The industry supports millions of jobs, particularly across Southeast Asia, and contributes substantially to national GDPs.

Yet, the market faces a pressing paradox — economic prosperity versus environmental responsibility. Rapid plantation expansion has led to deforestation, biodiversity loss, and carbon emissions, drawing global scrutiny. As a countermeasure, sustainability initiatives like the Roundtable on Sustainable Palm Oil (RSPO) are working to ensure ethical, traceable, and eco-friendly production.

Despite challenges, global demand continues to rise — bolstered by its broad utility, affordability, and evolving sustainable practices.

Recent Developments in the Palm Oil Industry

The palm oil market is witnessing a wave of innovation and modernization to meet both demand and sustainability goals:

May 2024: AI firm Dabeeo launched an AI-based monitoring project covering 765 square kilometers of Indonesian palm plantations, partnering with Tunas Sawa Erma Group to optimize sustainable cultivation.

May 2024: India’s 3F Oil Palm began operations at its first integrated oil palm processing unit in Arunachal Pradesh under the National Mission on Edible Oils – Oil Palm (NMEO-OP) initiative.

January 2024: M11 Industries and MK Agrotech started a new oil palm plantation project in Odisha, India, under a memorandum with the Government of Odisha, supporting self-sufficiency in edible oils.

These initiatives highlight the sector’s transformation towards technology-driven efficiency and eco-conscious growth.

Growth Drivers of the Palm Oil Market

1. Rising Demand for Fortified Palm Oil

Health-conscious consumers are increasingly turning to fortified edible oils enriched with vitamins A and D. Fortified palm oil contributes to improved nutrition and immunity — particularly vital in developing nations combating micronutrient deficiencies.

Countries like India, through its Food Safety and Standards Authority (FSSAI), have proposed mandatory fortification policies to strengthen public health. Global companies are following suit:

KTC Edibles (UK) launched Planet Palm in 2023 — a certified sustainable, traceable palm oil range.

BASF West Africa and EDCEL Limited introduced Vitamin A premix for edible oils in 2021 to improve nutrition levels across the region.

Such initiatives not only drive market growth but also align the palm oil sector with the global health and sustainability agenda.

2. Increasing Production of Biofuel

Palm oil is emerging as a key feedstock for biodiesel, offering a renewable alternative to fossil fuels. The move toward energy diversification and emissions reduction has amplified palm oil’s strategic importance.

Government initiatives like India’s National Policy on Biofuels (2022 revision) aim to reduce crude oil imports and promote indigenous biofuel generation. Similarly, Eni Kenya B.V. began operations in 2022 at its agri-hub in Makueni, producing vegetable oil for bio-refineries.

The push for bio-based economies in Asia, Africa, and Europe ensures consistent demand for palm oil in the renewable energy sector — a trend expected to accelerate through 2033.

3. Versatility Across Industries

Palm oil’s chemical stability and versatility make it indispensable across industries:

Food & Beverages: Used in margarine, bakery fats, chocolates, and instant noodles.

Personal Care & Cosmetics: Common in soaps, shampoos, lotions, and lipsticks due to its moisturizing properties.

Pharmaceuticals: Serves as a stabilizer and excipient in drug formulations.

Industrial Uses: Integral to detergents, lubricants, candles, and biodiesel.

This cross-sector demand ensures the palm oil market remains resilient, even during economic slowdowns.

Challenges Confronting the Palm Oil Market

1. Environmental Sustainability

Deforestation linked to palm oil plantations, particularly in Indonesia and Malaysia, poses a significant ecological challenge. The loss of tropical rainforests threatens species like orangutans and tigers, while land clearing releases large volumes of carbon dioxide, exacerbating climate change.

Global consumer brands and governments are increasingly enforcing sustainability standards and traceable supply chains. The RSPO certification, although not flawless, plays a crucial role in promoting responsible sourcing practices.

Still, implementing sustainability across thousands of smallholder farms remains a major hurdle — one that will define the industry's reputation in the coming decade.

2. Price Volatility

The palm oil market is highly sensitive to weather patterns, policy shifts, and geopolitical tensions. Events like droughts, floods, or export restrictions can quickly destabilize prices.

For instance, unpredictable climate events in Southeast Asia have repeatedly affected yields, while global trade policies, such as export bans or tariffs, add further uncertainty. Such volatility impacts both producers and buyers, challenging long-term planning and profit stability.

Regional Insights

United States Palm Oil Market

The U.S. palm oil market continues to expand, driven by demand in food manufacturing, cosmetics, and biofuels. Palm oil’s cost-effectiveness and shelf stability make it a staple in processed foods and personal care products.

Growing consumer awareness of sustainability has led to a preference for RSPO-certified palm oil, with major corporations like Unilever and Nestlé integrating responsible sourcing into their supply chains.

United Kingdom Palm Oil Market

In the UK, palm oil is widely used across snacks, bakery goods, and packaged foods. The nation’s stringent environmental regulations and eco-aware consumers have made certified sustainable palm oil (CSPO) a norm.

Brands are actively reducing deforestation-linked sourcing, reinforcing the UK’s role as a leader in ethical palm oil consumption. Despite challenges, the oil remains critical to many industrial and food applications.

India Palm Oil Market

India stands as one of the world’s largest consumers of palm oil, primarily for cooking oils and processed foods. The country’s heavy reliance on imports from Malaysia and Indonesia underscores the need for domestic palm cultivation initiatives, such as NMEO-OP, which aims to increase self-reliance.

The market is also witnessing a gradual shift toward fortified and sustainable palm oils, with both government and private players investing in awareness and production capacity.

Saudi Arabia Palm Oil Market

In Saudi Arabia, palm oil demand is rising rapidly, particularly for food processing, packaged snacks, and cosmetics. While the nation is a key importer rather than a producer, sustainability initiatives are gaining ground as part of broader efforts to support green sourcing and bio-based industries under Vision 2030.

Palm Oil Market Segmentation

By Application:

Household Cooking

Food & Beverages

Oleo Chemicals

Personal Care

Animal Feed

Bio-fuel

By Region:

North America: United States, Canada

Europe: France, Germany, Italy, Spain, United Kingdom, Belgium, Netherlands, Turkey

Asia-Pacific: China, Japan, India, Australia, South Korea, Thailand, Malaysia, Indonesia, New Zealand

Latin America: Brazil, Mexico, Argentina

Middle East & Africa: South Africa, Saudi Arabia, UAE

Leading Companies in the Palm Oil Market

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.

Wilmar International Ltd.

These firms are actively investing in sustainability certification, traceability systems, and renewable energy projects, ensuring compliance with environmental standards while maintaining profitability.

Final Thoughts

The global palm oil market stands at a defining crossroads — between sustained economic expansion and environmental accountability. With demand set to soar past US$ 88.84 billion by 2033, the challenge is not just to meet consumption needs but to do so ethically and sustainably.

Advancements in AI-driven agriculture, fortified oils, and biofuel innovations point toward a promising, more responsible future. However, ensuring transparency across supply chains, supporting smallholder farmers, and enforcing sustainability standards will remain the key to transforming the industry into a model of inclusive and green growth.