Global Palm Oil Market to Reach $57.2 Billion by 2026
Palm oil and palm kernel oil are obtained from the mesocarp and palm kernel of oil palm fruit, respectively, with the two differing in terms of saturated fat content. While palm oil is 52% saturated, palm kernel oil holds 86% saturated fat. The latter is mainly used in a broad range of consumer products, from soaps and cosmetics to detergents and candles. In addition to its use in an extensive spectrum of food products such as shortenings, cooking oil and margarines, palm oil is used as feedstock for bio-fuel. Compared to other oils, red palm oil contains high proportions of antioxidants and vitamin E and a high content of carotene, which is not found in other oils. Amid the COVID-19 crisis, the global market for Palm Oil estimated at US$42.8 Billion in the year 2020, is projected to reach a revised size of US$57.2 Billion by 2026, growing at a CAGR of 5% over the analysis period. Crude Palm Oil, one of the segments analyzed in the report, is projected to grow at a 4.8% CAGR to reach US$34.6 Billion by the end of the analysis period. After a thorough analysis of the business implications of the pandemic and its induced economic crisis, growth in the Palm Kernel Oil segment is readjusted to a revised 5.4% CAGR for the next 7-year period. This segment currently accounts for a 23.9% share of the global Palm Oil market.
The U.S. Market is Estimated at $11.9 Billion, While China is Forecast to Reach $11.7 Billion by 2026
The Palm Oil market in the U.S. is estimated at US$11.9 Billion in the year 2021. The country currently accounts for a 26.98% share in the global market. China, the world second largest economy, is forecast to reach an estimated market size of US$11.7 Billion by the year 2026 trailing a CAGR of 8% through the analysis period. Among the other noteworthy geographic markets are Japan and Canada, each forecast to grow at 2.8% and 4% respectively over the analysis period. Within Europe, Germany is forecast to grow at approximately 3.6% CAGR while Rest of European market (as defined in the study) will reach US$12.7 Billion by the end of the analysis period.
Future growth in the market will be driven by growing prominence of certified sustainable palm oil (CSPO) against the backdrop of public concerns over environmental, social, and deforestation issues related to palm oil cultivation. Demand for sustainably produced palm oil is also driven by growing focus of developed nations on clean and green fuel and growing application as a feedstock in biofuel production. The biofuel productivity yield of palm oil is the highest among all oilseed crops and is surpassed only by sugarcane in terms of productivity yield. Other factors driving increasing consumption of palm oil include its attribute of being the cheapest form of vegetable oil; increasing production in Indonesia and Malaysia; growing demand from the food sector for use as margarine, bakery fat, frying fat, and cooking oil; and high yields produced from a hectare of palm oil plantation. Increasing consumer focus on health & wellness along with undesirable effect of partially hydrogenated oils on the cholesterol level is driving food and snack processors to switch towards Trans-fat-free, and GMO-free palm oil.
Palm Kernel Oil Segment to Reach $14 Billion by 2026
Due to high level of saturated fat, palm kernel oil offers superior oxidative stability after frying, making it an attractive option for restaurants. The oil is also gaining attention from commercial food providers as it remains solid at the room temperature that makes it easy to transport and store. Increasing consumer focus on health & wellness along with undesirable effect of partially hydrogenated oils on the cholesterol level is driving food and snack processors to switch towards trans-fat-free, cost-effective options such as palm oil. Global market for Palm Kernel Oil segment is estimated at US$10.2 Billion in 2020, and is projected to reach US$14 Billion by 2026 reflecting a compounded annual growth rate of 5.4% over the analysis period. United States constitutes the largest regional market for Palm Kernel Oil segment, accounting for 28.8% of the global sales in 2020. China is poised to register the fastest compounded annual growth rate of 8.9% over the analysis period, to reach US$2.8 Billion by the close of the analysis period.
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