Palm oil is an edible vegetable oil extracted from the fruit of oil palms. The appearance of palm oil is reddish in colour due to the high beta carotene content. As compared to other vegetable oils, palm oil has emerged as the key global source of vegetable oil on account of satisfactory availability, versatility in usage and lower cost. Further, healthcare benefits of palm oil include ability to enhance energy levels, improve eye vision, boost immunity system, prevent premature ageing and reduce the risk of cancer and heart diseases. A new research report title “Palm Oil Market: Global Industry Trends, share, Size, Growth, Opportunity and Forecast 2018-2023” by IMARC Group estimates that the market reached a volume 73 million tons in 2017. The report further anticipates the market to reach approximately 96 million tons by 2023, at a projected CAGR of 4.8% over the forecast period.
- As palm oil is resistant to oxidation and can be used in even high temperatures, it helps in promoting a longer shelf life of the products. This has facilitated its application in a number of products in the food industry.
- In recent years, governments across various nations have taken initiatives to curb the consumption of trans-fat which has resulted in the increased use of palm oil globally.
- There is also a high demand for palm oil in the consumer goods industry as a result of its fatty acid composition, where it is widely used for manufacturing soaps, detergents, lubricants, greases, candles, etc.
- Moreover, palm oil is also being considered as an effective alternative to fossil fuels in transportation and energy industries. In addition, it is also used as an alternative to mineral oil in power stations for energy production.
- However, as the cultivation of palm oil involves the felling of tropical forests or the burning of peatlands, this has elevated the levels of deforestation, particularly in South-east Asia. This acts as a major constraint for the growth of the palm oil market.
Based on application, foods represent the largest application segment accounting for the majority of the global palm oil market. This can be accredited to the rising consumer preferences for healthier cooking oil in both mature as well as emerging markets. Foods is followed by consumer products and energy.
On a geographical front, India exhibits a clear dominance in the palm oil market. This is due to the confluence of affordability of palm oil and various government initiatives. It is followed by Indonesia, the European Union, China, Malaysia, etc.
The market is highly concentrated with the presence of established manufacturers who compete in terms of prices and quality. There is an intense competition in the market which makes it difficult for new entrants to survive without any acquisition. Some of the leading players operating in the market are:
- Wilmar International
- Sime Darby Berhad
- IOI Corporation
- Astra Agro Lestari
- Kuala Lumpur Kepong Berhad
- Golden Agri
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