OILSEED MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2024-2031)

Oilseed Market Size and Trends

The global oilseed market is estimated to be valued at USD 305.16 Bn in 2024 and is expected to reach USD 432.26 Bn by 2031, exhibiting a compound annual growth rate (CAGR) of 5.1% from 2024 to 2031.

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The global oilseed market is expected to witness positive growth over the forecast period driven by the rising demand for edible oils across the food industry. Additionally, the increasing consumption of nutritional supplements containing oilseeds is also contributing to the increased demand. Oilseeds are rich sources of proteins and various vitamins and minerals which is making them popular ingredients in nutrition bars and other similar products. The growth of end-use industries such as food and beverages, personal care products, and others is further augmenting the demand for oilseeds. Positive government initiatives in major growing regions to promote domestic oilseed production is further expected to support the market growth during the forecast period.

Increasing demand for edible oils

Global demand for edible oils is on a constant rise over the past few decades. As population and income levels continue to grow across major economies, the consumption of food products which use edible oils as a key ingredient has seen a significant surge. Edible oils are widely used in preparation of various cuisine styles around the world and are also utilized as raw materials in food manufacturing industries. Countries like India, China, Indonesia, and other emerging Asian markets have experienced rising living standards and changing dietary patterns of the consumers which is translating to increase per capita consumption of edible oils.

As people's disposable incomes are increasing, they are opting for more calorie-rich, tasty and convenient food options prepared with liberal usage of edible oils. The fast-evolving food cultures and expansion of global quick service restaurants chains have also contributed to boosting the demand. Growth in urban population coupled with busy lifestyles have made ready-to-eat and packaged food more desirable for time-pressed consumers, providing impetus to food processors to develop various edible oil-based food products. Rising health consciousness and focus on wellness have led to shifts to healthier oils such as canola, soybean, and sunflower oils, replacing commonly used palm and peanut oils in certain geographies.

While demand for global oilseed momentum remains strong across developing nations, matured markets like U.S. and Western Europe are witnessing steady intakes of edible oils mainly from food industry applications. However, the increasing prevalence of lifestyle ailments and diseases related to obesity has triggered moderation in direct-to-consumer edible oil consumption in some advanced economies. Nevertheless, with robust worldwide growth projections for population, income levels as well as food production, stakeholders can expect the requirements for oilseeds and edible oils to maintain an upward trajectory over the long term. This presents significant potential for oilseed producers, refiners, and traders to benefit.

Market Concentration and Competitive Landscape

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Growth in food processing industry

The food processing industry has made significant advancements over the past few decades and has become one of the largest economic sectors worldwide. For example, the expanding food industry is anticipated to propel market growth. For instance, according to data published by Invest India in 2022, by 2025, the Indian Food Processing market is estimated to reach US$ 535 Bn, growing at a compound annual growth rate of 15.2%. Constant technology advancement, shifting consumer needs, and favorable regulatory environment have propelled investments and innovations in this industry. Food manufacturers are introducing an array of new product variants targeting diverse consumer segments. Quick Service Restaurants, bakeries, confectionaries as well as packaged snacks and processed food companies heavily rely on edible oils as important ingredients in their formulations. Companies prioritize usage of highest quality oilseeds and edible oils for ensuring consistency, hygiene, longer shelf-life and superior taste of end food products.

Rapid urbanization in emerging markets has stimulated demand for convenient, branded packaged food items which has spurred capacity expansions and new plant set-ups by multinational food corporations. As discretionary spending climbs, consumers are willing to pay more premium prices for superior quality packaged foods. This encourages food processors to introduce premium and innovative offerings. At the same time, private label brands offered by leading retailers are gaining traction on the back of value proposition. Both trends provide sustained support to oilseed and edible oil demand from food industries.

Government initiatives such as food safety programs and foreign direct investment reforms have made many developing countries attractive manufacturing hubs. Establishing processing units locally allows companies to effectively cater to the growing domestic demand as well as access regional export potentials. Overall, the secular uptrends in urbanization, incomes, and modern retail penetration particularly across developing regions ensure a thriving environment for the food processing sector, translating to continued strengths in demand for oilseeds and edible vegetable oils.

Key Takeaways from Analyst:

Global oilseed market is experiencing strong growth owing to the rising consumption of edible oils and protein meals across various industries. North America currently dominates global oilseed production due to large agricultural land and growing demand for vegetable oils in the region. Soybean remains the largest oilseed globally, supported by its versatile use in various food and industrial applications. However, oil palm is gaining increased prominence due to its higher oil yields and suitability for tropical climates, particularly in Southeast Asian countries.

On the supply side, fluctuations in crop yields caused by changing weather patterns pose a challenge for guaranteeing consistent supply. Meanwhile, environmental concerns regarding deforestation for oil palm plantations act as a restraint. Nonetheless, growing health-consciousness is propelling the demand for healthier edible oils such as canola and sunflower, which provides an opportunity. Furthermore, the development of innovative technologies to produce sustainable biodiesel from oilseed is minimizing dependence on fossil fuels.

North America is exhibiting rising growth backed by robust demands from food as well as biodiesel industries. Supportive government policies promoting biodiesel blend mandates in transportation fuel are augmenting the regional market. Overall, increasing population coupled with rising incomes in developing regions will likely drive global consumption of food and industrial products containing vegetable oils in the coming years.

Market Challenge - Volatile crude oil and petroleum product prices

The global oilseed market faces significant challenge due to volatile crude oil and petroleum product prices in the international market, according to data by Economic Times in 2022, crude oil has been on a declining trajectory since June 2022 when it reached US$ 124 per barrel. For the last four months, prices have stayed below US$ 90. Being an agricultural commodity, the price of oilseeds is dependent on crude oil prices as it determines the demand for oilseed crops for the production of biofuel. High crude oil prices reduce the demand for biofuel produced from oilseeds which impacts the prices of oilseed crops negatively. On the other hand, oversupply of crude oil and petroleum products in the market leads to fall in their prices. This makes biofuel production from oilseeds unviable for biodiesel producers. The fluctuating trend makes demand forecasting difficult for oilseed producers and exporters. It also increases the business risk for companies involved in oilseed processing and biodiesel production. The volatility in fuel prices creates uncertainty among farmers regarding the suitability of oilseed cultivation over other alternative crops.

Market Challenge - Opportunity: Innovation in oilseed varieties

The global oilseed market provides significant opportunities for companies involved in research and development of new and innovative oilseed varieties. Development of oilseed varieties with greater resistance against pests and diseases can help improve crop yields as well as reduce production cost for farmers. There is also a scope for developing varieties with enhanced oil content and improved oil quality which allows extraction of oil with superior properties suitable for specific industrial applications. Innovation in oilseed varieties adapted to diverse agro-climatic conditions help expand oilseed production to new geographic regions. This can help address supply security issues. Development of varieties with modified oil composition enables production of feedstock oils fitting the evolving needs of food processing and biofuel industries. Overall, innovation in oilseed varieties through extensive Research and Development R&D presents major opportunities for oilseed market players to capture new customers and strengthened their position in the market.

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Insights by type: Diverse applications in both food and non-food industries

In terms of type, soybeans segment is estimated to contribute the highest market share of 38.7% in 2024. Soybeans account for the largest share in the global oilseed market owing to its diverse applications in both food and non-food industries. As a major source of plant-based protein, soybean serves as a primary ingredient in various foods such as tofu, edible oils, soy milk etc. Its protein content ranging between 35-40% makes soybean a desirable substitute for meat and dairy products. The rising demand for plant-based meat and dairy alternatives is directly driving the consumption of soybean on a global scale.

Apart from food, soybeans also find wide usage as feed for the livestock industry. Being highly nutritious, soybean meal is often mixed with other ingredients to formulate balanced animal feed. The ever-growing demand for meat and dairy has led feed manufacturers to significantly utilize soybean in compound feed formulations. Additionally, soybean oil extracts are gaining significance as biodiesel. Numerous governments across regions are promoting biodiesel blending programs which is favoring the production of soybeans.

From a cultivation perspective, soybean is amongst the easiest oilseeds to grow. It can be commercially produced across various agro-climatic conditions of tropical to temperate regions. Unlike other oilseeds, soybean does not require intensive agricultural inputs and is less prone to pest attacks. Additionally, soybean fixes nitrogen in soil and leaves the land in relatively good condition for subsequent crops in the crop rotation cycle. This enhances its production sustainability over long term.

Insights by application: Growing health-consciousness among individuals

Food & Beverage segment is estimated to contribute the highest market share of 42.2% share in 2024. The food and beverage segment accounts for the major share of the global oilseed market mainly attributed to the transformation in dietary habits and evolving consumer preference for healthy edible oils. Growing health-consciousness among individuals has fueled the demand for plant-based edible oils lower in saturated fats as against animal fats. Popular vegetable oils extracted from oilseeds such as soybean, canola and sunflower seeds are increasingly replacing butter, ghee and palm oil in various food applications.

Changing demographics characterized by smaller nuclear families and rising disposable incomes have led to a notable shift towards convenient, ready-to-eat food products. This has spurred the incorporation of edible oil in packaged snacks, fried foods and bakery products. Meanwhile, the growing influence of Western diets in developing countries is driving a larger per capita consumption of edible oils. Additionally, oilseeds are integral to various staple food preparations especially in Asia Pacific and Middle Eastern cuisines, thereby expanding their food applications.

Growth in the food service industry including restaurants, takeaways and cafes has also surfaced as a key driver. In order to meet the rising demand for fried and baked foods from expanding customer bases, food service establishments are upgrading their capacities which require stable supplies of quality edible oils in huge volumes. This is positively impacting the procurement of oilseeds globally.

Regional Insights

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North America has established itself as the dominant region in the global oilseed market with an estimated 37.6% share in 2024. The U.S. is the largest producer as well as exporter of oilseeds like soybean and canola in the world, owing to highly favorable climatic conditions and vast agricultural lands available for cultivation. The farmers in North America are quite advanced with sophisticated agricultural machinery and practices, which enables higher yield. Moreover, the developed processing infrastructure and strong presence of leading global agribusinesses have created a robust supply chain in the region. As a result, North America is able to meet both domestic as well as foreign demands effectively and remains the crucial supplier internationally.

On the other hand, the global oilseed market is experiencing significant growth, with the Asia-Pacific region emerging as the fastest-growing area. This surge is driven by increasing demand for oilseeds, particularly soybeans and palm oil, which are essential for food production, animal feed, and biofuel applications. Countries like China and India are seeing a rise in consumption due to changing dietary patterns and population growth, leading to a higher demand for protein-rich foods. Additionally, the region's expanding agricultural sector and investments in oilseed processing facilities are further fueling market growth. As consumers become more health-conscious, the demand for plant-based oils is also on the rise, promoting the use of oilseeds in various food products. With these factors at play, the Asia Pacific region is poised to play a crucial role in shaping the future of the global oilseed market.

Market Report Scope

Key Developments

• In March 2024, the Government of India launched a mission-mode program to significantly increase domestic oilseeds production and reduce the country's reliance on imported cooking oils. This initiative aims to achieve self-sufficiency in edible oil production by supporting farmers, improving crop yields, and investing in research and development.
• In February 2024, the Government of India continued to implement the Centrally Sponsored Scheme known as the National Food Security Mission - Oilseeds & Oil Palm (NFSM-OS&OP), which has been in effect since the 2018-19 fiscal year. This initiative aims to enhance the availability of edible oils in the country by focusing on increasing both the production and productivity of nine key oilseed crops.
• In February 2024, Syngenta Group, a prominent global agriculture technology company, announced significant collaborations following the launch of its innovation accelerator platform, Shoots by Syngenta, in 2023. These collaborations, which bring together expertise from various industries and sectors, are designed to accelerate the development of novel solutions to agricultural challenges more rapidly and efficiently.
• In 2022, Crystal Crop Protection Ltd, an agrochemical company based in India, acquired the seeds division of Bayer AG, a chemical company for an undisclosed amount. This acquisition encompasses hybrid seeds for grain sorghum, cotton, mustard, and pearl millet. With this strategic move, Crystal Crop aims to position itself among the leading companies in the seed industry. Furthermore, this purchase is expected to strengthen its field crop seed business and establish it as a formidable integrated Agri-Input player.

*Definition: The global oilseed market refers to the international trade and economic activities related to the production, processing, and distribution of oilseeds. Oilseeds are seeds that are cultivated primarily for their oil content, which can be extracted for various uses, including cooking oils, biodiesel, animal feed, and industrial applications.

Market Segmentation

• By Type Insights (Revenue, USD Bn, 2019 - 2031)
• • Soybeans
  • Rapeseed (Canola)
  • Sunflower Seeds
  • Palm Kernels
  • Others
• By Application Insights (Revenue, USD Bn, 2019 - 2031)
• • Food & Beverage
  • Animal Feed
  • Biofuel
  • Industrial
  • Others
• Regional Insights (Revenue, USD Bn, 2019 - 2031)
  • North America
    • U.S.
    • Canada
  • Latin America
    • Brazil
    • Argentina
    • Mexico
    • Rest of Latin America
  • Europe
    • Germany
    • U.K.
    • Spain
    • France
    • Italy
    • Russia
    • Rest of Europe
  • Asia Pacific
    • China
    • India
    • Japan
    • Australia
    • South Korea
    • ASEAN
    • Rest of Asia Pacific
  • Middle East
    • GCC Countries
    • Israel
    • Rest of Middle East
  • Africa
    • South Africa
    • North Africa
    • Central Africa
• Key Players Insights
• • Archer Daniels Midland Company (ADM)
  • Cargill, Inc.
  • Bunge Limited
  • Wilmar International Limited
  • Louis Dreyfus Company
  • Olam International
  • CHS Inc.
  • Bühler Group
  • Sime Darby Plantation
  • Ag Processing Inc. (AGP)
  • Mitsui & Co., Ltd.
  • Soni Soya Products Limited
  • ETG Agro Private Limited
  • Cootamundra Oilseeds
  • Mountain States Oilseeds
  • Kanematsu Corporation
  • Bora Agro Foods
  • Oilseeds International
  • Cargill Oilseeds
  • Groupe Limagrain