Palm Oil Market – Global Industry Size, Share, Trends, Opportunity, and Forecast, Segmented By Type (Crude Palm Oil, RBD Palm Oil, Palm Kernel Oil, Fractionated Palm Oil), By Application (Food & Beverage, Personal Care & Cosmetics, Biofuel & Energy, Pharmaceuticals, Others), By Nature (Organic, Conventional), By Region, By Competition, 2021-2031F

Forecast Period	2027-2031
Market Size (2025)	USD 76.65 Billion
CAGR (2026-2031)	6.12%
Fastest Growing Segment	Organic
Largest Market	Asia Pacific
Market Size (2031)	USD 109.47 Billion

Market Overview

The Global Palm Oil Market will grow from USD 76.65 Billion in 2025 to USD 109.47 Billion by 2031 at a 6.12% CAGR. Palm oil is a highly productive edible vegetable oil extracted from the mesocarp of the oil palm fruit, serving as a fundamental ingredient in food processing, oleochemicals, and the renewable energy sector. The market is primarily driven by the rising global population's demand for affordable vegetable oils and the strategic expansion of national biodiesel mandates which enforce higher blending rates. These structural factors collectively sustain global consumption levels and incentivize yield improvements across major producing regions, distinct from temporary pricing trends.

However, market expansion is impeded by rigorous environmental regulations and anti-deforestation policies that restrict land development and complicate trade with environmentally sensitive regions. Adhering to these evolving standards requires costly supply chain transparency mechanisms that can strain operational margins. According to the Indonesian Palm Oil Association (GAPKI), in 2024, the production of Crude Palm Oil and Palm Kernel Oil in Indonesia reached 52.76 million tons, highlighting the significant volume that must now align with these strict global sustainability frameworks.

Key Market Drivers

Increasing implementation of biodiesel mandates and renewable energy policies acts as a primary structural catalyst for the market, fundamentally altering global trade flows. Governments in major producing nations are aggressively raising blending targets to reduce fossil fuel reliance and absorb domestic supply, effectively creating a substantial captive market that insulates the industry from external price volatility. This policy-driven shift ensures that significant volumes of crude palm oil are diverted from the edible export market to domestic energy production, tightening global availability. According to the Indonesian Palm Oil Association, February 2024, in the 'Performance of the Palm Oil Industry in 2023' report, domestic consumption specifically for biodiesel application reached 10.65 million tons, underscoring the massive scale of this mandated absorption.

Escalating demand from the global processed food and beverage industry further propels market continuity, largely due to the oil's superior yield efficiency and cost-effectiveness relative to alternative vegetable oils. As inflationary pressures affect consumer spending, food manufacturers favor palm oil for its competitive pricing and functional versatility in products ranging from confectionery to bakery items. This preference is particularly evident in price-sensitive import markets where volume procurement is dictated by arbitrage against soft oils like soy and sunflower. According to the Solvent Extractors' Association of India, August 2024, in their monthly import data release, India’s palm oil imports surged to 1.09 million tons in July 2024, driven by these favorable price spreads. To support this massive consumption requirement, according to the Malaysian Palm Oil Board, in 2024, Malaysia maintained robust output with crude palm oil production recorded at 18.55 million tonnes for the preceding year.

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Key Market Challenges

The imposition of rigorous environmental regulations and anti-deforestation policies serves as a significant structural barrier to the expansion of the global palm oil market. These regulatory frameworks fundamentally restrict the conversion of new land for cultivation, thereby limiting the acreage available for plantation expansion in key producing regions. As governments and international bodies enforce stricter sustainability standards, producers encounter escalating compliance costs associated with establishing transparent supply chains. These added financial burdens directly erode operational margins and disincentivize necessary investment in production capacity, creating a supply-side bottleneck that prevents the industry from efficiently scaling output to meet global needs.

Furthermore, these evolving non-tariff barriers complicate international trade dynamics, making it increasingly difficult for major exporters to maintain fluid commerce with environmentally sensitive markets. The impact of these tightening constraints is evident in the contraction of trade volumes from major suppliers. According to the Indonesian Palm Oil Association (GAPKI), in 2024, the total export volume of palm oil products declined by 8.3% to 29.54 million tons. This reduction in export flow underscores how regulatory complexities and supply limitations effectively dampen the broader market's growth potential.

Key Market Trends

Increasing Corporate Procurement of Certified Sustainable Palm Oil (CSPO) is reshaping market dynamics as multinational consumer goods companies aggressively align purchasing strategies with global decarbonization and ethical sourcing commitments. This trend extends beyond mere regulatory compliance, evolving into a commercial imperative where verified sustainability credentials dictate market access and premium pricing structures. Downstream buyers are systematically transitioning procurement contracts towards segregated and identity-preserved supply chain models to mitigate reputational risks associated with environmental degradation. According to the Roundtable on Sustainable Palm Oil (RSPO), December 2024, in the 'Impact Report 2024', the global production of Certified Sustainable Palm Oil (CSPO) reached 16.2 million tonnes, representing approximately 20.1% of total global crude palm oil output, reflecting the industrial scale of this shift towards verified sustainable sourcing.

Simultaneously, the sector is witnessing the Valorization of Palm Biomass and Mill Effluent for Renewable Energy, effectively transforming operational waste streams into a critical revenue driver and circular economy asset. Producers are investing in advanced technologies to convert empty fruit bunches, mesocarp fiber, and palm oil mill effluent (POME) into bio-energy and value-added inputs, distinct from the primary crude oil extraction process used for conventional biodiesel. This integration enables milling facilities to achieve energy self-sufficiency and supply surplus power to national grids, thereby monetizing previously discarded by-products. According to the Malaysian Palm Oil Council (MPOC), August 2024, in a statement regarding the '2024 National Seminar on Palm Oil Milling', the Malaysian industry alone generated 92.37 million tonnes of palm biomass in the preceding year, underscoring the immense commercial potential available for renewable energy applications.

Segmental Insights

The Organic segment currently represents the fastest-growing category within the Global Palm Oil Market, driven by a significant shift in consumer preferences toward health-conscious and sustainable choices. Increasing awareness regarding the adverse effects of synthetic pesticides and fertilizers has accelerated the demand for chemical-free, clean-label ingredients, particularly in the food and personal care sectors. This growth is further supported by stringent verification standards set by institutions such as the Roundtable on Sustainable Palm Oil (RSPO), which ensure ethical sourcing and environmental responsibility. Consequently, major manufacturers are reformulating products to include organic alternatives, reinforcing this segment’s rapid expansion.

Regional Insights

Asia Pacific holds the leading position in the global palm oil market due to extensive production capabilities in Indonesia and Malaysia. These nations benefit from tropical climates that are ideal for oil palm cultivation, allowing them to supply the majority of global demand. Furthermore, rising consumption within the food and energy sectors across the region drives local market expansion. Regulatory efforts by institutions such as the Malaysian Palm Oil Board further structure the industry through specific export policies and replanting mandates. Consequently, the concentration of both large-scale supply and domestic usage establishes Asia Pacific as the primary regional market.

Recent Developments

• In November 2025, the seed division of Golden Agri-Resources introduced a breakthrough drought-tolerant oil palm seed variety, known as DxP Dami Mas MTK. This innovative product was the first of its kind to be validated by the Indonesian Ministry of Agriculture for maintaining superior performance under water-deficit conditions. Developed over more than a decade of research, the new seeds were designed to mitigate the impact of climate change-induced droughts on plantation yields. The launch aimed to enhance the resilience of the global palm oil industry and protect the livelihoods of farmers facing increasingly extreme weather patterns.
• In November 2025, Posco International and GS Caltex completed the construction of a joint venture palm oil refining facility in Kalimantan, Indonesia. The new plant, valued at USD 210 million, was established to secure a stable supply of sustainable palm oil for use in biofuel and food production. This strategic collaboration combined the agricultural capabilities of the trading firm with the processing expertise of the refiner to meet the growing global demand for green energy feedstocks. The facility was positioned to strengthen the companies' integrated value chain and support the transition towards lower-carbon energy solutions.
• In August 2025, a consortium of major consumer goods and agribusiness companies, including Musim Mas, Nestle, and Unilever, launched the Aceh Sustainable Palm Oil Working Group. This collaborative platform was established to support the production of deforestation-free and inclusive palm oil in Aceh, Indonesia. The initiative aimed to align corporate sourcing strategies with the provincial government's sustainable development roadmap, ensuring that independent smallholders are integrated into compliant supply chains. The partnership focused on protecting critical ecosystems in the region while maintaining the economic viability of the palm oil sector for local communities.
• In March 2024, a leading vegetable oil processor, Apical Group, announced a significant investment of USD 1 billion to expand its downstream palm oil production capabilities in Dumai, Indonesia. The company aimed to increase the output of value-added products, aligning its strategy with the national government's vision to advance domestic downstream industries. This expansion was designed to broaden the firm's distribution network and facilitate closer collaborations with partners across Java and other regions. The initiative underscored the company's commitment to supporting local economic growth while strengthening its position in the global palm oil market.

Key Market Players

• Archer Daniels Midland Company
• Wilmar International Ltd.
• Sime Darby Plantation Berhad
• IOI Corporation Berhad
• Kuala Lumpur Kepong Berhad
• United Plantations Berhad
• Kulim (Malaysia) Berhad
• IJM Corporation Berhad
• PT Sampoerna Agro Tbk
• Univanich Palm Oil Public Company Ltd.

By Type	By Application	By Nature	By Region
Crude Palm Oil RBD Palm Oil Palm Kernel Oil Fractionated Palm Oil	Food & Beverage Personal Care & Cosmetics Biofuel & Energy Pharmaceuticals Others	Organic Conventional	North America Europe Asia Pacific South America Middle East & Africa

Report Scope:

In this report, the Global Palm Oil Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• Palm Oil Market, By Type:

• Crude Palm Oil
• RBD Palm Oil
• Palm Kernel Oil
• Fractionated Palm Oil

• Palm Oil Market, By Application:

• Food & Beverage
• Personal Care & Cosmetics
• Biofuel & Energy
• Pharmaceuticals
• Others

• Palm Oil Market, By Nature:

• Organic
• Conventional

• Palm Oil Market, By Region:

• North America
• United States
• Canada
• Mexico
• Europe
• France
• United Kingdom
• Italy
• Germany
• Spain
• Asia Pacific
• China
• India
• Japan
• Australia
• South Korea
• South America
• Brazil
• Argentina
• Colombia
• Middle East & Africa
• South Africa
• Saudi Arabia
• UAE