Palm oil is an edible oil that can be derived from the special fruits of oil palm trees. Palm oil has a very big palm oil market as well. Two types of oil can be produced from palm fruits.
The first one is the basic type of oil that is derived by squeezing the fleshy part of the fruit, and the second one is the oil that can be derived from crushing the stone in the middle part of the fruit.
The palm tree once planted produces fruits for nearly more than three decades, thus making it eligible to produce a great deal of oil that is cost-effective. For the numerous types of uses of this palm oil, the palm oil market is increasing day by day.
An overview
The demand of the palm oil market around the world was estimated as near about 74.6 million tons in the year 2019 and is estimated to register a good volume-based CAGR of 2.3% from the years 2020 to 2027.
Notable growth in the demand for this product from many industries along with the continuous growth in consumer awareness regarding the health benefits of using palm oil is expected to be one of the main and powerful drivers of its market growth.
The countries of Asia Pacific, such as Indonesia and Malaysia, are the top producers of this oil, for more than 80% of the production of the entire world. The research about the palm oil market shows that palm oil is favored in nearly 50% of all types of consumer products sold daily.
There is a high rise in demand from countries like Indonesia, Thailand, China, Malaysia, and India. The monthly consumption on an average basis was expected to be near about 5.7–5.8 MMT in 2019. Palm oil has a good usage in the fields of food and cosmetics, and recent studies are revealing that it can be used as biodiesel for cars as well.
About palm oil market
Indonesia is a dominant exporter of palm oil. In 2019, Indonesia exported nearly 75 percent of the total palm oil production globally. Malaysia comes as the second-largest exporter of the product known as palm oil and also exports nearly 90 percent of the total production of this oil.
The major destinations of exporting for the Malaysian exporters are the countries like India and the Netherlands. Though palm oil is not widely used for cooking in the U.S, it has good usage in tasks like food processing. This oil is also used in personal products like cosmetics, shampoo, biodiesel, and also some cleaning products as well. The prices of crude palm oil increased in April 2019.
This price increase was because of a growth in global demand. The supply of palm oil globally has been facing a strong growth of 4.3 percent CAGR at the time of 2012–2013 until the time 2018–2019.
The stock levels of palm oil have decreased by about 3.3 percent at the time 2018–2019, for the growing consumption of palm oil from the industry of biodiesel. It is expected that the stock levels of palm oil will improve during 2019–2020. Palm oil contract structures and prices are fixed by the suppliers of Malaysia by the use of MPOB crude palm oil and also adding up the freight costs.
The share of Palm Oil Market
When we talk about the size of the palm oil market, it is expected to grow both in production and usage. The major region of production in Indonesia, as it produces more than half of the global palm oil. Thailand produces 3%, and Colombia and Nigeria each produce the amount of 2%.
Therefore, the production of palm oil and also the palm oil market is increasing day by day, as its use and demand are rising. Therefore, it will have a high demand in the future as well.
