The global palm oil market size is estimated to grow at a CAGR of 6.7% from 2018 to2026. The increasing use of palm oil in several industrial sectors such as biodiesel, cosmetics, surfactants, medicines etc. is the main factor driving the market. Palm oil has been among the rapidly rising sectors within the worldwide vegetable oil industry with Indonesia and Malaysia leading its production along with export. In the present palm oil market scenario, emerging demand for this product is owing to its comparatively cheap price than other vegetable oils. Palm oil advantages in non-edible and edible industrial applications have led to its increasing use in a variety of industries. Regarding its supply, it depends on the continuing improvement in its yield in Malaysia and the increase in its plantation in Indonesia.
One of the most significant developments in the palm oil market is the ever-increasing production and use of biofuels from palm oil. The expansion of new biodiesel markets especially in the European Union (EU) is an important driving factor for this. Palm oil biofuels has been getting significant importance worldwide as several nations are seeking to substitute the use of conventional oil owing to its soaring prices and moreover help in reducing greenhouse gas emissions (GHG).
The higher prices of hydrocarbon fuels have made palm oil the potential alternative fuel and this has puts the industry in multinational global business. For Indonesia and Malaysia, which are the globally leading producers and also the exporters of it, catering to the global and local demands for biofuels eventually results in its increasing production and the expansion into new markets. The growing industry of palm oil has also been a vital source of employment in countries and foreign exchange for countries such as Indonesia and Malaysia that are involved in its production.
Nevertheless, with such a notable growth, the palm oil market has been charged partly as one of the major factors for deforestation, biodiversity loss, endangering of wild species. Moreover, social problems and land disputes in the plantation areas in the producing countries and elsewhere have been yet an restraining cause. With such impacts and consequences highlighted the current industry space it is currently under strict scrutiny that has put the producers, operators and mill owners, NGOs governments and communities in a battle including sides with varying interests.
While the rising trend on worldwide demand for the commodity continues and with the economic advantages being weighed alongside the intensifying social and environmental problems, the industry is currently being redressed through lens of its sustainable expansion. Improved and technologically advanced palm oil production methods that comply with social and environmental policy frameworks and with greater engagement of stakeholders’ the novel approaches to sustainable palm oil have been helping in maintaining its supply demand balance.
The Asia Pacific palm oil market leads the worldwide market in terms of production. Indonesia and Malaysia are the leading producers in a global scale with over 51% and 19% of the overall global production in 2017. Thailand is yet another potential producer accounting for around 2 MMT produced last year. Malaysian palm oil exports are expected to grow further from major overseas buyers owing to its decision to suspend export taxes for a specific time frame. Indonesia is world’s highest palm oil producer, which supplies just about half of this commodity globally. This is Indonesia’s largest agricultural sector with its production and export is anticipated to expand further at over 10% annually.
Some of the leading industry participants include Wilmar International, Univanich Palm Oil Public Company Limited, United Palm Oil Industry Public Company Limited,, Sime Darby Plantations, Siat Group of Companies, PT Indofood Sukses Makmur Tbk, PT Astra Agro Lestari Tbk, Musim Mas Group, MM VitaOils Sdn Bhd,, Kuala Lumpur Kepong Berhad, Kempas Edible Oil Sendirian Berhad, IOI Group, Intercontinental Specialty Fats, Golden Agri Resources Ltd, Genting Plantations, Fuji Vegetable Oils Inc, Dekel Oil, Carotino Group, California Oil Corp, Boustead Group, Alami Group, and ADM.