Global palm oil market in 2023 was USD 70.95 billion. Demand for palm oil grew 8.3% in 2024 compared to the previous year, so global market will be USD 76.8 billion in 2025. Global sales between 2025 to 2035 will be expanding at 4.5% CAGR, eventually reaching USD 119.1 billion in 2035.
The market of palm oil remains on the increase because it is used for a variety of applications in foodstuffs, cosmetics, biofuels, among others. Palm oil is extremely sought after based on its stability, adaptability, and relatively low cost versus other vegetable oils, and as such is an underlying commodity used in foods, cooking fats and oils, and cosmetics.
Most discernible driving force behind palm oil demand is in the food sector as a cooking oil and in food products as an ingredient for margarine, snacks, bakery food, and ready-to-eat food. Palm oil demand to be utilized in the biofuels market due to growing interest in alternative fuels is another driving force behind its market growth.
| Attribute | Description |
|---|---|
| Estimated Global Palm Oil Industry Size (2025E) | USD 76.8 billion |
| Projected Global Palm Oil Industry Value (2035F) | USD 119.1 billion |
| Value-based CAGR (2025 to 2035) | 4.5% |
Sustainability is the most important problem for palm oil businesses. The environmental effects of palm oil cultivation, deforestation, landscape loss, and greenhouse gas emissions have created ever-growing pressure on governments, consumers, and green agencies alike.
Several businesses and manufacturers are therefore greening, including the application of the Roundtable on Sustainable Palm Oil (RSPO) certification that certifies socially responsibly and environmentally sustainably the production of palm oil.
In addition, health and sustainability concerns increasingly redefine demand for palm oil substitutes. Initiatives to make palm oil a sustainable crop through technology, certification, and better land use will be able to uphold demand in the long term and even propel growth.
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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.
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.
Growth of Sustainable & Certified Palm Oil (RSPO, ISCC, MSPO)
Shift: Due to increasing pressure from ecologists, regulators, and consumers for deforestation-free, ethically sourced palm oil by brands, there has been increased fear of greenhouse gas emissions and loss of biodiversity. EU Deforestation Regulation (EUDR) of 2025 will ban the import of deforestation-induced palm oil, destroying export-based economies of Indonesia and Malaysia.
USA business retailers and FMCG companies are becoming increasingly compelled to ensure 100% traceable and sustainable palm oil to preserve business ESG standards. Over 72% of global FMCG brands committed to sustainability but only 20% have achieved 100% transition, a 2023 Roundtable on Sustainable Palm Oil (RSPO) report found. Pledge-performance gap is forcing industry-wide action.
Strategic Response: Unilever, Nestlé, and Procter & Gamble are racing to 100% RSPO-certified palm oil, investing in blockchain-based traceability technology with real-time supply chain data. The world's leading palm oil manufacturer, Wilmar International, launched a supplier compliance dashboard to track in real time the sustainability statements given by suppliers in order to detect risk related to non-compliance with EUDR.
Sime Darby Plantation and Cargill have invested significantly in smallholder farmer certification schemes and certified more than 20,000 small farmers to practice sustainable farming methods in order to attain sustainable supply chain resilience. Private-labelers such as Tesco and Carrefour are taking off the shelves non-certified palm oil, requesting manufacturers to attain strong sustainability certification as a measure to compete for shelf space.
Growing Demand due to Biofuel & Energy Market
Shift: Palm oil biodiesel and biofuel demand is being fueled by the global transformation of energy demand, mainly in Southeast Asia and Europe. Indonesia, the world's largest producer of palm oil, has been favoring the B35 mandate, where the diesel fuel will be blended with 35% palm oil, and the latter will be depleted by merely 13 million metric tons of palm oil in 2024.
Thailand and Malaysia also raised their individual targets of blending biodiesel, propelling the demand forward. Meanwhile, EU palm oil biofuels remain contentious and EU Renewable Energy Directive (RED II) based on deforestation grounds. Policy hurdles notwithstanding, though, low-carbon fuels continue to open up shipping and aviation markets, and palm oil biofuels remain in the equation.
Strategic Response: Neste, a global renewable diesel leader, is investing in palm oil-free biofuels and waste oils, animal fat, and recycled feedstock use to meet the demands of sustainability while reducing virgin palm oil reliance. Wilmar International and Golden Agri-Resources are collaborating with Indonesian and Malaysian government refineries to make as much biodiesel as possible sustainably for meeting local and export demand.
Sime Darby Oils is developing a sustainable aviation fuels (SAF) business for airlines operating in the market and would prefer to reduce their carbon footprint from fuel. BP and Shell are entering palm oil biofuels for renewable product diversification, balancing the risk of environmental concerns and producing competitively priced products in emerging economies.
Alternative Use of Palm Oil in Food & Personal Care
Shift: North American and European consumers are shunning palm oil increasingly on the grounds of saturated fat at heavy consumption, deforestation, and ethics. Over 43% of French, German, and British food and cosmetic manufacturers are re-formulating to replace or drop palm oil with coconut oil, sunflower oil, and shea butter.
Apart from this, new EU legislation requires extra labelling of palm oil more specifically so consumers can identify and avoid the unsustainable palm oil easily. Thus, palm oil substitutes gain popularity on the food and cosmetic side of the business, and companies react by buying more sustainable or man-made substitutes.
Strategic Response: L'Oréal and Ferrero (Nutella and their palm oil have committed to reducing their use of palm oil, replacing shea butter and cocoa butter with sustainable alternatives without diminishing their product in quality or texture. Mars and Mondelez are regrinding with high-oleic sunflower oil, the same texture as palm oil but without the environmental drawbacks.
With USD 20 million in seed money, startup C16 Biosciences is creating a lab-cultured palm oil with commercial plans for a scalable alternative by 2026. Palm oil-free product lines from food store chains Whole Foods and Trader Joe's have pressured the industry to become more transparent and sustainable.
Booming Demand in Emerging Markets
Shift: Palm oil consumption is increasing in emerging economies, especially India, China, and Africa, as it is a dominant cooking oil and required food additive ingredient. India is the biggest palm oil importer, with more than 9 million metric tons consumed every year, followed by China, where demand also continues to rise as the instant noodles and processed foods market grows.
Africa, especially Nigeria and Kenya, is also witnessing growing consumption because palm oil continues to be an affordable alternative to sunflower and soybean oil whose prices have been fluctuating on global markets. Regardless of how much the West whined about the sustainability of palm oil, its affordability and consumption continue to render it a price-sensitive market option.
Strategic Response: The world's palm oil producing titans, Indonesia and Malaysia, are winning out preferential trade deals with China and India and building export ties, guaranteeing constant supply regardless of the ups and downs on the global markets. Fortified variants of palm oil with vitamins A and D by Fortune Foods and Adani Wilmar's COFCO Corporation are being brought in to South Asian and Chinese health food consumers.
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.
| Segment | Value Share (2025) |
|---|---|
| Food & Beverage (By Application) | 73.1% |
Food and beverages led the market due to the high demand for palm oil in snack foods, confectionery, processed dairy, and fast food products. For manufacturers and consumers worldwide, palm oil is a product notoriously in demand for its stability, value and ability to provide both texture and shelf life across a wide range of food products. Its rich flavour and versatility are why it is one of the key ingredients of margarine, baked goods and instant noodles.
Due to the increasing demand for sustainably-sourced and trans-fat-free palm oil, more manufacturers are now focusing on RSPO-certified, low-saturated fat, and functional palm oil derivatives. Developments in enzymatic processing and fractionation technology mean that manufacturers are able to create palm-based ingredients that have improved nutritional profiles and a reduced environmental footprint.
Brands are also being driven to reform palm oil sourcing practices by increasingly conscious consumer demands for ethical sourcing and deforestation-free supply chains.
The segment is expected to grow rapidly in Asia-Pacific and North America, accounting for an estimated 73.1% of the forecasted value share in 2025. Palm-based emulsifiers, frying oils and specialty fats remain an essential ingredient in processed and packaged foods in these markets, as food products within the sphere of convenience, affordability and functionality continue to reign.
| Segment | Value Share (2025) |
|---|---|
| Biofuels, Personal Care & Industrial Applications (By Application) | 26.9% |
Increasing demand for bio-based fuels, bio-based cosmetics, and biomaterials has spurred the industry to expand into palm-derived biofuels, personal care formulations, and industrial lubricants. Palm-based products are being mandated in industries due to their versatility, renewability, and economical use.
The growing use of palm kernel oil and palm oleo chemicals in personal care markets, detergents, and pharmaceuticals also contributed to demand. Due to their emollient, foaming, and stabilizing properties, these palm derivatives are key components in cosmetic formulations, surfactants, and pharmaceutical preparations.
Everyone wants high-purity and sustainable palm derivatives that help be both environmentally sound, and drive demand for the fractionated palm oil, palm wax, and glycerin will only increase as producers push for these sustainable products. Incentives for using sustainably sourced palm ingredients are reinforced by various programs for improving sustainable palm processing and RSPO certification.
A 26.9% value share in 2025 is expected from this segment, with demand being especially strong from Asia-Pacific and North America. Palm oil-based versatile raw materials are becoming more widely used in the cosmetic and pharmaceutical fields, as well as in the production of renewable energy and this follows the global trend for raw materials to be green and multifunctional.
The palm oil market is witnessing fierce competition among key players, who focus more on sustainable sourcing, bio-refining technologies, and growing applications in food, energy, and personal care. And companies are investing in palm oil certification schemes, low-carbon refining avenues and palm-derived specialty products.
Key players in the industry such as Wilmar International, Sime Darby, IOI Corporation, Cargill, and Kuala Lumpur Kepong (KLK) possess significant expertise in large scale palm oil processing, bio-based palm derivatives, and global trading networks. Many companies are ramping up refining operations in the Asia-Pacific region to meet growing demand for sustainable palm oil in food and industrial use.
Strategic opportunities consist of collaborations with sustainable palm growers, investment into palm oil traceability initiatives, and creating palm-free alternatives for ethical consumers. Source: Manufacturers immediately switched to RSPO-certified palm oil and zero-deforestation supply chains.
For instance
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.
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.
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