Palm Oil Market Size To Hit USD 98.7 Bn by 2034

Overview

New York, NY – June 03, 2025 – The Global Palm Oil Market is a rapidly growing industry, expected to reach USD 98.7 billion by 2034, up from USD 64.8 billion in 2024, with a steady CAGR of 4.3% from 2025 to 2034.

Conventional palm oil leads the market with a commanding 91.2% share in 2024. Its dominance in the By Nature segment of the Palm Oil Market stems from its widespread use in food and beverage products, valued for its stability and cost-effectiveness. Crude palm oil holds a significant 49.3% market share in 2024 within the By Product segment. Its prominence is driven by its versatility and cost-efficiency in food processing and industrial applications, particularly as a raw material for edible oils, margarine, and shortenings.

Edible oil applications dominate the By Application segment, capturing a 62.9% share in 2024. This leadership is driven by palm oil’s extensive use in food processing, particularly for frying, baking, and margarine production. The Food and Beverage sector leads palm oil consumption, accounting for 63.2% of the market in 2024. Its dominance in the end-use segment is driven by its critical role in processed foods, confectionery, and baked goods, where it enhances texture and extends shelf life.

Key Takeaways

• Global Palm Oil Market is expected to be worth around USD 98.7 billion by 2034, up from USD 64.8 billion in 2024, and grow at a CAGR of 4.3% from 2025 to 2034.
• In the Palm Oil Market, conventional palm oil dominates with a substantial 91.2% market share.
• Crude palm oil holds a significant position, capturing 49.3% of the total product segment.
• Edible oil applications drive demand, accounting for a prominent 62.9% of palm oil utilization.
• The food and beverage sector remains the leading end-use segment, comprising 63.2% of total consumption.
• With a 45.8% market share, Asia-Pacific leads, earning USD 29.6 Bn.

How Growth is Impacting the Economy

• The growth of the palm oil market has a significant impact on global economies, particularly in producing countries such as Indonesia and Malaysia, which account for over 85% of the global supply. In 2024, the Asia-Pacific region generated USD 29.6 billion, creating millions of jobs, with Indonesia alone employing nearly 5 million people directly.
• Rising demand for biofuels and processed foods boosts export revenues, enhancing foreign exchange earnings. However, deforestation and sustainability challenges pose risks, prompting investments in eco-friendly practices. These efforts support rural economies by improving smallholder incomes and fostering agricultural development. Conversely, price volatility and environmental regulations may strain profit margins, necessitating balanced growth strategies to sustain economic benefits.

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Strategies for Businesses

• Businesses in the palm oil market should prioritize sustainability by adopting RSPO-certified practices to meet growing consumer demand for ethical sourcing. Investing in advanced processing technologies can enhance yield efficiency and reduce environmental impact. Diversifying product portfolios to include high-demand derivatives like fractionated palm oil ensures competitiveness.
• Strengthening supply chain transparency through digital tools builds trust and mitigates risks. Forming strategic partnerships with local producers in Asia-Pacific can secure supply stability. Additionally, exploring emerging markets like India and China, where demand for processed foods is rising, offers growth opportunities.

Report Scope

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Key Market Segments

By Nature Analysis

• Conventional palm oil leads the market with a commanding 91.2% share in 2024. Its dominance in the By Nature segment of the Palm Oil Market stems from its widespread use in food and beverage products, valued for its stability and cost-effectiveness. Conventional palm oil is a key ingredient in processed foods, margarine, and baked goods, bolstered by its high yield and established supply chains. As market dynamics evolve, conventional palm oil is poised to maintain its lead due to entrenched supply networks and versatile applications across diverse food products.

By Product Analysis

• Crude palm oil holds a significant 49.3% market share in 2024 within the By Product segment. Its prominence is driven by its versatility and cost-efficiency in food processing and industrial applications, particularly as a raw material for edible oils, margarine, and shortenings. The rising demand for processed foods and ready-to-eat meals further fuels its market position, while its role in biodiesel production enhances its relevance in regions with biofuel mandates.

By Application Analysis

• Edible oil applications dominate the By Application segment, capturing a 62.9% share in 2024. This leadership is driven by palm oil’s extensive use in food processing, particularly for frying, baking, and margarine production. Its stability at high temperatures and neutral taste make it ideal for commercial frying and household cooking, while its affordability supports widespread adoption. The growing food service sector and demand for processed foods further boost palm oil’s role in the edible oil segment.

By End-use Analysis

• The Food and Beverage sector leads palm oil consumption, accounting for 63.2% of the market in 2024. Its dominance in the end-use segment is driven by its critical role in processed foods, confectionery, and baked goods, where it enhances texture and extends shelf life. Palm oil’s cost-effectiveness and stability at high temperatures make it a preferred choice for frying in fast food chains and commercial kitchens, as well as in margarine and snack food production.

Regional Analysis

• Asia-Pacific led the global palm oil market with a 45.8% share, generating USD 29.6 billion in revenue. This dominance is fueled by robust production in Indonesia and Malaysia, alongside rising demand in emerging economies. North America and Europe are key markets, driven by palm oil’s growing use in processed foods and personal care products.
• The Middle East & Africa region is seeing increased adoption due to its expanding food processing industry. Latin America, leveraging its rich agricultural resources, is emerging as a significant market, balancing export growth with rising domestic palm oil consumption.

Recent Developments

1. ADM (Archer Daniels Midland)

• ADM has been focusing on sustainable palm oil sourcing, partnering with suppliers to improve traceability and reduce deforestation risks. The company recently expanded its certified sustainable palm oil volumes, aligning with global ESG goals. ADM also invested in digital supply chain tools to enhance transparency.

2. Wilmar International Ltd.

• Wilmar launched new sustainability initiatives, including a blockchain-based traceability system to track palm oil from plantations to consumers. The company committed to achieving net-zero emissions by 2050 and increased its support for smallholder farmers in Indonesia and Malaysia.

3. Sime Darby Plantation Berhad

• Sime Darby strengthened its sustainability efforts by obtaining more RSPO (Roundtable on Sustainable Palm Oil) certifications. The company also faced scrutiny over labor practices, but has since improved worker welfare programs. It expanded into Africa with new plantations in Liberia.

4. IOI Corporation Berhad

• IOI Corporation increased its focus on sustainable palm oil, achieving 100% RSPO certification for its Malaysian operations. The company invested in renewable energy projects using palm biomass and partnered with NGOs to enhance biodiversity conservation in its plantations.

5. Kuala Lumpur Kepong Berhad (KLK)

• KLK expanded its sustainable palm oil production and introduced stricter environmental policies to reduce carbon emissions. The company also ventured into downstream oleochemical products, targeting the European market with eco-friendly palm oil derivatives.

Conclusion

The Palm Oil Market is driven by its versatility and cost-effectiveness. Despite environmental challenges, sustainable practices and technological advancements ensure continued growth. Asia-Pacific’s dominance and rising demand in emerging markets highlight its economic significance. Businesses adopting ethical strategies will thrive, securing palm oil’s role as a vital global commodity.

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