Increasing Consumer Awareness Regarding Positive Health Benefits of Palm Oil, Changing Consumption Habits of Consumers Towards Nutritional Diet and Increasing Demand for Biofuels in Upcoming Years is Estimated to Drive the Industry Growth."
Palm Oil Market size is estimated to be $81.9 billion in 2019, growing at a CAGR of 6.0% during the forecast period 2020-2025. Palm Oil an edible vegetable oil that is derived from the mesocarp (reddish pulp) of the fruit of the oil palms. Two types of oil can be produced, crude palm oil comes from squeezing the fleshy fruit, and palm kernel oil which comes from crushing the kernel, or the stone in the middle of the fruit. Palm oil is used as a cooking oil and is also added to many ready-to-eat foods in daily grocery store. Growing consumer awareness regarding positive health benefits of palm oil, changing consumption habits of consumers towards nutritional diet and increasing demand for edible oils are driving the market growth in recent years. In addition, major market development of key players like Sime Darby and Asian Agri are other factors driving the growth of the market. Palm Oil Industry Analysis is based on product, distribution channel, end use and geography.
Product - Segment Analysis
Crude Palm Oil held the largest share in the type segment of Palm Oil Market in 2019 and is estimated to grow at a CAGR of 5.4% during the forecast period 2020-2025. Commonly it is combined or mixed with coconut oil to make highly saturated vegetable fat, which is also used for cooking purposes. Main usage of CPO is for cooking purposes and is largely used in South-East Asia, West Africa and some parts of Brazil. This has resulted in a rapid surge in the demand of this segment in the recent years. It is estimated that RBD Palm Oil is poised to be the fastest growing segment and register the highest CAGR during the forecast period 2020-2025, owing to increasing uses as cooking oils in households and industrial frying fat of instant noodles, potato chips, and doughnuts.
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End Use - Segment Analysis
Biofuel and Energy held the major share in the end use segment of Palm Oil Market in 2019. Growing demand of renewable and eco-friendly resources have contributed as a major factor for the market growth of this segment. Recently, palm oil has been used as a feedstock in the production of biodiesel. The Malaysian government's plan is to combine 5 percent palm biodiesel with 95 percent petroleum diesel, in a way similar to the addition of 10 percent ethanol into gasoline in the United States. This has resulted in greater awareness among the people, and hence, drives the market growth. Food and beverage segment is forecast to grow at the fastest rate with the highest CAGR during the forecast period 2020-2025, owing to increasing and varied applications as edible cooking oil, and usage as an economical alternative to other cooking oils such as the ones sourced from soybean and sunflower.
Geography - Segment Analysis
Asia-Pacific dominates the geography segment of Palm Oil Market with a share of more than 37% in 2019. Increasing disposable income, major share of the global palm oil production and nutritious foods in place of conventional meals, health concerns regarding trans-fat consumption and presence of key market players have helped in the growth of Palm Oil Market infrastructure in this region. North America held the second place in the geography segment share of the market, owing to shifting consumer lifestyle towards healthy eating habits and growing awareness about benefits of palm oil among the people in this region.
Asia-Pacific is estimated to continue growing at the fastest rate at a higher CAGR during the forecast period 2020-2025. This is owing to rapidly increasing market applications of palm oil in various fields, entry of new market players in the region, and increasing awareness about low priced oils among the population.
Drivers – Palm Oil Market
Increasing consumer awareness regarding positive health benefits of palm oil
Environmental consciousness seems to be an important attribute marketers should take into account when both developing and promoting products. However, consumers’ perception of palm oil as a product ingredient is gradually developing. Palm oil is now perceived as being a more natural product whose naturalness could be exploited regarding physical wellbeing leading to helping consumers achieve a healthy life and higher self-stem. As a result, there is a rise in demand as cooking oil, which has resulted in more consumption of palm oil. This is set to drive the market growth in the forecast period 2020-2025.
Increasing demand for biofuels
Demand for biofuels is increasing in response to worries about exhausting stock of fuels. Demand for biofuels made from food crops, such as palm and rapeseed oil has increased as a result in past few years. This is projected to drive the demand for Palm Oil, and consequently help in market growth during the forecast period 2020-2025.
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Challenges – Palm Oil Market
Growing concerns regarding deforestation and plant diversity losses
There are great concerns regarding the current condition of forests and plant diversities. The government across prominent palm oil plantation nations i.e. Indonesia and Malaysia are focused on sustainable and organic production. In order to fulfil this, several restrictions may be there on the amount of cultivation and commercialization done. Thus, it is set to hamper the market growth during the forecast period 2020-2025.
Palm Oil Industry Outlook
Product launches, mergers and acquisitions, joint ventures and R&D activities are key strategies adopted by players in the Palm Oil Market. In 2019, Palm Oil Market share is consolidated by the top players present in the market. Palm Oil Market top 10 companies are Wilmar, Sime Darby, IOI Corporation, Kuala Lumpur Kepong, Asiatic Development, London Sumatra, Boustead, United Plantations Bhd, Asian Agri and PT Dharma Satya Nusantara Tbk among others.
Acquisitions/Product Launches
In June 2020, Sime Darby Plantation published its oil palm genome to support the company’s ambition for a deforestation-free industry.
In August 2019, Academics and Asian Agri collaborated for national seminar on sustainable palm oil.
In June 2020, &Green Fund made palm oil sector investment in PT Dharma Satya Nusantara Tbk.
Key Takeaways
Asia-Pacific dominates the Palm Oil Market in the year 2019 owing to increasing disposable income, major share of the global palm oil production and nutritious foods in place of conventional meals, health concerns regarding trans-fat consumption and presence of key market players in the region. The Palm Oil Market scope for different regions will be provided in the final report.
Increasing consumer awareness regarding positive health benefits of palm oil, changing consumption habits of consumers towards nutritional diet and increasing demand for biofuels in upcoming years is estimated to drive the industry growth during the forecast period 2020-2025.
Detailed analysis on the Strength, Weakness and Opportunities of the prominent players operating in the market will be provided in the Palm Oil Market report.
Growing concerns regarding deforestation and plant diversity losses are set to hamper the market growth of the Palm Oil Industry.
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