Development of Sustainable Palm Supply Chain Becomes a Linchpin for Palm Oil Market Stakeholders | Fact.MR

Palm Oil Market

Key Findings

Palm Oil Market to Witness Lower Profit amid Rising Cost of Production

The growth of the palm oil market is dependent on several market sentiments and supply-demand factors. High price volatility is likely to hit the palm oil market as palm oil captures the largest volume of vegetable oil traded across the globe and enforcement of new policies and regulation against the backdrop of growing awareness regarding irresponsible plantation practices.

Palm oil is one of the most widely used vegetable oils and it has been grown as a subsistence crop for several millennia. Originally from West Africa, they were introduced to Southeast Asia by Europeans and this region dominates the palm oil market today in terms of production. The versatility of palm oil has allowed it to be used in diverse areas such as cosmetics, detergents, pharmaceutical, and food products. More than half the products sold in a typical supermarket store contains products from the palm oil market. Palm oil uses nearly 10 times less land than competing vegetable oils such as sunflower or rapeseed oil and it also produces a greater yield per hectare. In addition, it requires lesser pesticides, fertilizer, and also stores more carbon than the other oil crops.

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Grown only in the tropics, the oil palm tree produces high-quality oil used primarily for cooking in developing countries. It is also used in food products, detergents, cosmetics and, to a small extent, biofuel. Palm oil is a small ingredient in the U.S. diet, but more than half of all packaged products Americans consume contain palm oil—it’s found in lipstick, soaps, detergents and even ice cream.

Palm oil is a very productive crop. It offers a far greater yield at a lower cost of production than other vegetable oils. Global production of and demand for palm oil is increasing rapidly. Plantations are spreading across Asia, Africa and Latin America. But such expansion comes at the expense of tropical forests—which form critical habitats for many endangered species and a lifeline for some human communities.

Fact.MR has analyzed the global palm oil market in depth, estimating it to reach US$ 33.7 Bn value by 2022-end at a moderate CAGR. The report has also made certain projections given below –

  • Europe is expected to maintain its dominant position in the palm oil market throughout the course of the forecast period. A CAGR of 4.9% from 2017 to 2022 makes it particularly appealing to key stakeholders in the palm oil market.
  • A potential opportunity of almost US$ 5 billion in 2017 alone makes North America extremely important in the palm oil market which major companies would be highly advised to take into account while planning their long-term strategies.
  • The virgin segment represents only a third of the revenue share by product type in the palm oil market and it is not anticipated to outpace the processed segment anytime soon. Europe and APEJ are the only regions that are predicted to cross US$ 2 billion by end of 2022 and companies could look at targeting them with products that cater to their requirements.
  • The retail segment is on track to comprise more than a third of the palm oil market by end use segment. Studies show that it is present in more than half of all commodities stocked on retailer store shelves. The palm oil market serves the food & beverage, cosmetics, animal foodstuff, and pharmaceutical industry.
  • The specialty store segment is only a fifth of the revenue share by distribution channel in the palm oil market but companies could try to raise the profile of these dedicated stores by committing additional resources. Specialty stores may only market products sold in the palm oil market raising the awareness of this multi-purpose natural oil.

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Market Segmentation

Global Palm Oil Market Analysis and Forecast By Product Type

Processed Palm Oil

Virgin Palm Oil

Global Palm Oil Market Analysis and Forecast By End User

Foodservice Palm Oil

Food Processor Palm Oil

Retail Palm Oil Market

Global Palm Oil Market Analysis and Forecast By Distribution Channel

Modern Trade Palm Oil Market

Franchise Outlets Palm Oil Market

Specialty Stores Palm Oil Market

Online Palm Oil Market

Global Palm Oil Market Analysis and Forecast By Region

Regional analysis includes
• North America (U.S., Canada)
• Latin America (Brazil, Mexico, Argentina, Chile, Peru, Rest of LATAM)
• EU – (Germany, France, Italy, Spain), UK, BENELUX ), Rest of Europe
• CIS & Russia
• Japan
• Asia Pacific Excluding Japan (Greater China, India, S. Korea, ASEAN Countries, Rest of APEJ)
• Middle East and Africa (GCC Countries, Turkey, Iran, Israel, South Africa, Rest of MEA)

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It can be safely said that online retail has dramatically transformed our lives for the better. However, the best is still to come as emerging markets come online for the first time with rapidly improving 4G LTE networks and falling prices of smartphones. There is a strong possibility that these customers may only use the online channel and major companies need to devise their plan of action accordingly. A revenue share of 19% may seem small today, but online is almost certainly going to be a distribution channel with maximum potential in the palm oil market.

The report has also profiled leading manufacturers of palm oil in the global market, which include companies such as

  • American Vegetable Oils
  • Cargill Inc.
  • Grief Inc.
  • Fuji Oil Holdings
  • Bunge Limited
  • Associated British Foods
  • Ruchi Soya Industries.

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