Palm Oil Market Set to Reach $88.84 Billion by 2033 Amid Rising Global Demand

According to Renub Research Recent Report palm oil market is experiencing substantial growth, poised to expand from US$ 61.19 billion in 2024 to US$ 88.84 billion by 2033, registering a compound annual growth rate (CAGR) of 4.23% during the forecast period. Driven by its versatility, affordability, and rising awareness of its nutritional and industrial applications, palm oil remains one of the most critical commodities in the edible oils sector. Its influence extends beyond the kitchen, touching industries such as biofuels, cosmetics, pharmaceuticals, and oleochemicals, making it indispensable in both developed and emerging economies.

Palm oil is extracted from the fruit of the oil palm tree, primarily cultivated in Southeast Asia, where Indonesia and Malaysia dominate global production. Its high yield per hectare and cost-effectiveness have positioned it as a preferred vegetable oil worldwide. Millions of people rely on the palm oil industry for employment, and the sector significantly contributes to the economic development of producing nations.

However, the industry has faced scrutiny due to its environmental and social impacts. Deforestation, biodiversity loss, and greenhouse gas emissions associated with large-scale oil palm plantations have raised global concerns. Additionally, labor exploitation and land rights issues in production regions have drawn attention from human rights organizations. In response, initiatives like the Roundtable on Sustainable Palm Oil (RSPO) have emerged to certify sustainably produced palm oil, aiming to reduce ecological harm while maintaining economic viability. Despite these measures, ensuring compliance across the global supply chain remains a challenge.

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Innovations and Industry Developments

Several recent projects reflect the industry’s growth and modernization. In May 2024, Dabeeo, a leading geospatial intelligence AI company, launched an AI monitoring initiative for 765 square kilometers of Indonesian palm oil plantations in partnership with the Tunas Sawa Erma Group, one of Indonesia’s top producers. This project demonstrates how technology is increasingly being integrated into production for better yield management and environmental monitoring.

Similarly, 3F Oil Palm inaugurated its first integrated oil palm processing unit in India in May 2024. Located in Arunachal Pradesh, the facility features a palm oil processing and refinery plant, a zero-discharge effluent plant, a palm waste-based power plant, and support infrastructure. It marks India’s first integrated oil palm factory under the National Mission on Edible Oils–Oil Palm (NMEO-OP) initiative, signaling the country’s growing commitment to domestic palm oil production.

In January 2024, M11 Industries and MK Agrotech commenced a palm oil plantation in Odisha under an MoU with the Government of Odisha’s NMEO-OP program, further highlighting India’s push to enhance local production capabilities and reduce import dependency.

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Key Drivers of Market Growth

1. Fortified Palm Oil Demand

Fortified palm oil, enriched with vitamins A and D, is gaining traction due to increasing health-conscious consumer behavior. Such oils can contribute 25%–30% of daily vitamin requirements, helping combat malnutrition. Countries are launching programs to encourage fortification, especially in staple oils.

For instance, India’s Food Safety and Standards Authority (FSSAI) proposed mandatory fortification of edible oils in 2021 to improve nutrition and immunity. In the UK, KTC Edibles launched Planet Palm, a certified sustainable palm oil product line, while BASF West Africa and EDCEL Limited introduced Vitamin A premixes for edible oils, reflecting growing industry adoption.

2. Biofuel Production

Palm oil serves as a critical feedstock for biodiesel, a renewable energy source that enhances energy security while reducing reliance on fossil fuels. Government incentives and biofuel policies are fueling demand, especially in regions like India, where the National Policy on Biofuels encourages indigenous biofuel production.

Private investments are also driving expansion. For example, Eni Kenya B.V. opened a vegetable oil agri-hub in Makueni, Kenya, producing 2,500 tons of oil in 2022 with a planned capacity of 15,000 tons, supporting local bio-refinery operations. As biofuel adoption increases globally, the palm oil market is expected to benefit significantly.

3. Industrial Versatility

Beyond food, palm oil’s properties make it invaluable in personal care, pharmaceuticals, detergents, and industrial applications. Its emulsifying and moisturizing characteristics are critical for soaps, lotions, and cosmetics. In pharmaceuticals, palm oil derivatives are used in capsules, ointments, and medicines. Additionally, it contributes to the production of candles, lubricants, and biodiesel, reinforcing its broad industrial appeal.

Challenges Facing the Palm Oil Market

Environmental Concerns

The rapid expansion of palm oil plantations, particularly in Indonesia and Malaysia, has caused deforestation and biodiversity loss, threatening habitats of species like tigers and orangutans. Carbon emissions from land clearing exacerbate climate change, prompting global pressure to adopt sustainable practices. While RSPO certification and other initiatives address these concerns, widespread implementation remains difficult.

Price Volatility

Palm oil prices are highly sensitive to climatic conditions, geopolitical tensions, and production fluctuations. Natural disasters like floods, droughts, and disease outbreaks can disrupt supply, while export restrictions and trade regulations may affect global pricing. This volatility poses challenges for both producers and consumers, making long-term planning and market predictability difficult.

Regional Market Insights

United States

The US palm oil market continues to grow steadily due to its extensive use in food, cosmetics, and biofuels. Products like margarine, baked goods, and snacks rely on palm oil for affordability and shelf-life. With rising demand for sustainably sourced products, RSPO-certified palm oil is gaining traction in the US market. Despite sustainability challenges, palm oil remains a cost-effective and versatile ingredient in various industries.

United Kingdom

The UK market is driven by palm oil’s role in food processing, cosmetics, and biofuel production. Ethical sourcing concerns and sustainability pressures have boosted the importance of RSPO certification. As consumer awareness of environmental impact grows, the demand for certified sustainable palm oil continues to rise, influencing both production practices and import trends.

India

India is a major consumer of edible oils, with palm oil being integral to cooking, processed foods, and snacks. Affordability and versatility make it a preferred choice, but environmental concerns in producing countries are driving a shift toward sustainable sourcing. Government initiatives and RSPO certifications are increasingly adopted to ensure responsible consumption and production practices.

Saudi Arabia

As a leading importer, Saudi Arabia’s palm oil market is expanding due to its extensive use in cooking, processed foods, detergents, biodiesel, and cosmetics. Sustainability concerns have prompted an increase in RSPO-certified imports, reflecting growing consumer and regulatory attention to ethical sourcing.

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Market Segmentation

The palm oil market can be categorized across several applications and regions:

By Application:

Household Cooking

Food & Beverages

Oleo Chemicals

Personal Care

Animal Feed

Biofuel

By Country:

North America: United States, Canada

Europe: UK, France, Germany, Italy, Spain, Belgium, Netherlands, Turkey

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

Latin America: Brazil, Mexico, Argentina

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

Key Players in the Global Palm Oil Market

The industry is dominated by several multinational corporations focusing on sustainable and efficient production practices:

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 companies emphasize innovation, sustainability, and expansion in emerging markets. Their strategies include RSPO certification, traceable supply chains, and diversification across food, biofuel, and industrial applications, ensuring resilience against environmental and market challenges.

Conclusion

The global palm oil market is on a trajectory of steady growth, driven by population expansion, urbanization, and rising demand in multiple industries. Its versatility, affordability, and nutritional potential make it a cornerstone of the global edible oils sector. While environmental sustainability and price volatility remain challenges, initiatives like RSPO certification and fortification programs are shaping a more responsible and health-conscious market.

Regions such as India, Saudi Arabia, the United States, and the UK are leading demand, while Southeast Asia continues to dominate production. With innovations in biofuel production, industrial applications, and fortified oils, the palm oil market is poised for long-term growth, balancing economic opportunities with environmental and social responsibility. By 2033, the industry is projected to reach US$ 88.84 billion, cementing its role as a vital global commodity.

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