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Global Palm Oil Industry Report: Market Outlook; Country Overview; Recent Events; Value Chain Analysis; Production Process; Trade Analysis; Cost Structure; Price Analysis; Price Indicator Analysis; Market Dynamics: Drivers & Constraints, Industry Events, Innovations & Trends, SWOT Analysis; Porter’s Five Forces: Buyer Power, Supplier Power; Market Analysis; Industry Best Practices; Key Supplier Analysis, 2022-2027

Palm Oil Industry Report by Regional Category Spend, Price Analysis, Key Demand and Price Indicators, and Best Buying Practices


The global palm oil market reached a value of about 86.39 MMT in 2021. The industry is projected to grow at a CAGR of around 5.0% in the forecast period of 2022-2027 to reach a value of about 116.55 MMT by 2027.

The global palm oil industry report gives a comprehensive analysis of the industry, including key segments, trends, drivers, restraints, the competitive landscape, and other essential market aspects. With rising awareness about the health benefits of palm oil among users and increased demand from end-user segments, the industry is set to grow. In the industry report, the critical demand indicator is the highest category spender by region— Asia Pacific (Indonesia).

Industry Definition and Segmentation

Palm oil is a vegetable oil obtained from the mesocarp (reddish pulp) of the oil palm's fleshy fruit. It is derived from the tropics and provides high-quality oil primarily used for cooking in underdeveloped nations. Because of its reddish-orange hue, unrefined palm oil is frequently referred to as red palm oil. The oil is utilised in food, detergents, cosmetics, and biofuel to a lesser extent. The Palm oil industry report comprises segments by origin (Organic, Conventional), product (Crude Palm Oil, RBD Palm Oil, Palm Kernel Oil, Fractionated Palm Oil), application (Household Cooking, Food & Beverages, Oleo Chemicals, Personal Care, Animal Feed, Biofuel), and region (North America, Europe, Asia Pacific, the Middle East, and Africa, and South America).

North America, Europe, Asia Pacific, Middle East & Africa, and South America Regions are Driving the Growth of the Industry

Palm oil's top producers are Malaysia and Indonesia, which account for more than 80% of global output. India was the largest importer of palm oil in 2017, purchasing about 10 million tonnes, followed by the EU and China as the top importers. The increased demand from industries such as food, feed, and oleochemicals influences the palm oil market in China, another significant importer. It is increasingly employed as a feedstock in manufacturing biodiesel in the EU, the second-largest importer of the same. The oil has several health advantages, including increasing energy, decreasing premature ageing, improving eye vision, strengthening the immune system, and lowering the risk of cancer and heart disease. Owing to the health benefits offered and the growing health awareness among consumers, the demand for palm oil is rising. Palm oil is also quickly replacing petroleum-based goods as a viable option in the transportation and energy industries. It is also used as a mineral oil alternative in power plants for energy generation. It is used in roughly half of all consumer items marketed regularly, propelling the industry's expansion. Other factors such as its status as the cheapest form of vegetable oil, rising production in Indonesia and Malaysia, rising demand from the food industry for use as margarine, bakery fat, frying fat, and cooking oil, and high yields produced per hectare of palm oil plantation, a shift in consumer preferences, rising disposable income and per capita consumer spending across all geographies are furthering the industry growth.

However, rising worries over large-scale deforestation caused by extensive planting have led to more substantial plantation restrictions around the globe. This is likely to act as a market restraint.

Best Procurement Practices

The global palm oil industry report by Procurement Resource gives an in-depth analysis of the best buying practices followed by major global palm oil regions across the globe, such as engagement models, contract terms, and buyer and supplier negotiation levers, among others.

Category Management Studies

Palm oil is made from the seeds of palm trees. Before being transplanted to the plantations, the seeds are planted in a nursery and given daily watering and care for the first eight months of their lives. While growing in the plantations, the trees are irrigated and fertilised as needed. They are deemed mature after 30 months and are ready for their first harvest, which will take place every 7-10 days. The harvested FFB is brought from the plantations to the mills on trucks, which is steam sterilised. This prepares the FFB for stripping, which removes the palm fruit from the bunch while also deactivating any enzymes that might cause the FFB to lose quality. The palm fruit is processed into two primary products after being stripped of the FFB: Crude Palm Oil (CPO), derived from the fruit's mesocarp or flesh, and Palm Kernel Oil (PKO), which is extracted from the hard seed in the centre. The first step is to remove CPO from the fruit's mesocarp by pressing it. Next, the oil is filtered and clarified to verify that it is free of contaminants before being dried to satisfy CPO standards. The CPO is then processed into edible oils (cooking oil, cream, and margarine), oleochemicals (used in detergents and lubricants), biodiesel (fuel), and lauric acids at a refinery (used in cosmetics and soaps). The leftover kernels, or palm seeds, are broken and deshelled. The shells are removed and sold as biofuel, while the grains are crushed further to make crude Palm Kernel Oil (PKO) and Palm Kernel Expeller Oil (PKE) (PKE). The crude PKO is further refined before being utilised in culinary items such as non-dairy creams and ice cream. At the same time, the remaining PKE is often used to manufacture animal feed.

Healthier and Sustainable Versions of the Oil, Further Driving the Procurement of Palm Oil

Food and snack producers are switching to trans-fat-free, GMO-free palm oil due to a growing consumer focus on health and wellbeing, as well as the adverse effects of partly hydrogenated oils on cholesterol levels. The rising significance of certified sustainable palm oil (CSPO) against the backdrop of public concerns about environmental, social, and deforestation issues associated with palm oil agriculture will drive future market expansion. The increased focus of industrialised countries on clean and green fuel and its expanding use as a feedstock in biofuel production are driving demand for sustainably produced palm oil. Palm oil has the most significant biofuel productivity output of all oilseed crops, second only to sugarcane in terms of productivity yield.

The regional markets for the industry can be divided into North America, South America, Europe, the Middle East and Africa, and the Asia Pacific.

Key Industry Players Mentioned in the Palm Oil Industry Report

  • Wilmar International Ltd.
  • Cargill, Incorporated
  • Bunge Limited
  • Archer Daniels Midland Company

Market Landscape

The major manufacturers in the industry have their land where they harvest oil kernels, and they work with farmers to grow palm groves for production and provide training and support to help them produce high-quality products. Manufacturers are focusing on developing advanced product portfolios by investing heavily in R&D activities to expand their palm oil product portfolio by providing a broader end-user application base and market sturdiness. Technological inventiveness and extensive foreign funds in the industry are predicted to generate outstanding opportunities for industry members across the globe.

Key Initiatives by Companies

In Denmark and other Western European nations, as well as World Health Organization awareness programmes aimed at reducing trans-fat intake, are expected to promote market development. According to the publication, the worldwide palm oil market is expected to rise moderately between 2021 and 2026.

1.    Executive Summary
2.    Global Palm Oil Market Snapshot

    2.1.    Palm Oil Market Outlook
    2.2.    Country Overview
        2.2.1.    Indonesia
        2.2.2.    Malaysia
        2.2.3.    Others
3.    Impact of Recent Events 
4.    Palm Oil Value Chain Analysis 
5.    Palm Oil Production Process
6.    Trade Analysis 
7.    Major Risk Factors in Sourcing
8.    Palm Oil Cost Structure
9.    Palm Oil Price Analysis 
10.    Key Demand Indicator Analysis
11.    Key Price Indicator Analysis
12.    Palm Oil Market Dynamics

    12.1.    Drivers & Constraints
    12.2.    Industry Events 
    12.3.    Innovations & Trends
    12.4.    SWOT Analysis
    12.5.    Porter’s Five Forces
        12.5.1.    Buyer Power
        12.5.2.    Supplier Power
        12.5.3.    Threat of New entrants
        12.5.4.    Threat of Substitutes
        12.5.5.    Industry Rivalry
13.    Feedstock Market Analysis 
    13.1.    Market Overview
    13.2.    Price Analysis 
14.    Industry Best Practices
    14.1.    Sourcing Strategy
    14.2.    Procurement Model
    14.3.    Contract Structure
    14.4.    Negotiation Levers
    14.5.    Pricing Model
    14.6.    Key Factors Influencing the Quotation 
15.    Key Supplier Analysis
    15.1.    Wilmar International Ltd.
    15.2.    Cargill, Incorporated
    15.3.    Bunge Limited
    15.4.    Archer Daniels Midland Company

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Key Questions Answered in the Report

The global palm oil market size was valued at about 86.39 MMT in 2021.

As per the application segments, the food products segment is anticipated to lead the market between the period 2022 - 2027.

The significant demand for cooking oil with various health benefits is one of the essential drivers of the market growth.

Wilmar International Ltd., Cargill, Incorporated, Bunge Limited and Archer Daniels Midland Company are some of the leading companies in the market.

Indonesia in Asia Pacific region holds a significant share in the almond’s market.

Analyst Review

The global palm oil market attained a value of 86.39 MMT in 2021, driven by the rising prevalence of health awareness among consumers. It is also increasingly displacing petroleum-based products as a viable transportation and energy alternative and a mineral oil substitute in power plants to generate electricity propelling the industry's growth. Other factors that contribute to the industry's growth include its status as the cheapest form of vegetable oil, rising production in Indonesia and Malaysia, rising demand from the food industry for use as margarine, bakery fat, frying fat, and cooking oil, and high yields produced per hectare of palm oil plantation, shifts in consumer preferences, rising disposable income, and per capita consumer spending globally. Aided by the introduction of newer oil variations, the market is expected to witness further growth in the forecast period of 2022-2027, growing at a CAGR of 5.0%. The market is projected to reach 116.55 MMT by 2027.

Procurement Resources’ detailed research approach explores deep into the industry, encompassing the macro and micro aspects of the industry. Its team of experts uses a combination of cutting-edge analytical tools and their expertise thus, delivering its customers with market insights that are accurate, actionable, and help them remain ahead of their competition.

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