SOY OIL AND PALM OIL MARKET ANALYSIS

Global Soy oil & palm oil market-Insights

Global Soy oil & palm oil market was valued at US$ 103,230.9 Million in 2022 in terms of revenue, and is expected to exhibit a CAGR of 6.29 % and reach at 168,226.5 Million during the forecast period (2023 to 2030).

Drivers

Healthy Properties of Soy oil & palm Oil:

Soy oil & palm oil consumption has been associated with several health advantages including enhanced bone health, lowered blood pressure, lowered cholesterol, and a decreased risk of heart disease. The numerous health benefits of soy oil & palm oil are the reasons for its rising popularity. Soy oil & palm oil is rich in Vitamin K, which may support bone health maintenance and this lower the incidence of fractures. Additionally, an animal study discovered that the soy oil & palm oil might stop bone deterioration. This oil is therefore thought to be a suitable cooking oil for cardiac patients. In 2021, according to the American Heart Association, cardiovascular disease diagnosis increased by 26.6% globally in 2022. The deaths attributable to the condition have increased globally by 17% over the past ten years.

Market Restraints

Increasing Availability of Substitute and Alternate Oils to Act as a Key Restraint for Market Growth

The market is highly affected by the availability of various other oilseeds that can be used as an alternative or a substitute for soy oil. Soy oil & palm oil, olive oil, rapeseed oil, sunflower oil, and canola oil are major competitors of this oil. Soy oil & palm oil is the only vegetable oil in the world that is regularly priced at a discounted price, which significantly hampers the growth of the market. Soy oil & palm oil has higher saturated fat content than soy oil & palm, rapeseed, sunflower, and other oils and tends to be solid at room temperature. Soy oil & palm oil is preferred for baked goods with a flaky texture, such as biscuits and pies. Furthermore, growing awareness regarding nutritional and healthy oils such as olive oil among consumers has considerably affected negatively the utilization of this soy oil & palm oil across retail aisles. By proper marketing this restraint can be counterbalance.

Global Soy Oil & Palm Oil Market - Impact of Coronavirus (COVID-19) Pandemic:

The emergence of the COVID-19 pandemic and widespread lockdown measures have had little effect on soy oil & palm production. The consumption of soy oil & palm oil, one of the primary by-products of soy oil & palm processing, has dropped significantly. The pandemic had affected the food service industry. According to the U.S. Department of Agriculture, the demand for soy oil & palm oil for feed and food consumption is still being weakened by COVID-related limitations in China. As a result, soy oil & palm imports for marketing years 2021–2022 and 2022–2023 are reduced to 92 million metric tons and 96.5 million metric tons, respectively. The prediction for soy oil & palm output for marketing years 2022–2023 is significantly lower at 18.1 million metric tons due to reduced yields brought on by extreme heat and drought in minor soy oil & palm-producing regions. The pandemic has had an impact on the demand for soy oil & palm, which is restraining the soy oil & palm oil market.

The consumers have shifted toward being health conscious and are looking for good & healthier foods with nutrients, and soy oil & palm oil products accounts for one of them. So, the increase in the demand during COVID-19 can be witnessed. In the short term, the market demand is expected to show superior growth due to the increase in infections and reduced economic activity. However, the fact cannot be ignored that the spread of COVID-19 led to lockdowns and supply chain disruptions and created problems in supply of products.

Segmentation Analysis:

The global soy oil & palm oil market is segmented by source and by product type. By source, the market is segmented into organic and conventional. By product type, the market is segmented into soy oil, palm oil, palm kernel oil, refined oil. By region the global soy oil & palm oil market analysis conducted across North America, Latin America, Asia Pacific, Europe, Middle East, and Africa.

Figure 1. Global Soy oil & palm oil Market Value Share (%), By Region, 2022

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By Regional analysis:

Asia Pacific held a significant market share in the global Soy oil & palm oil market in 2022, For instance, according to the Asia Biomass Energy Corporation, Malaysian Government has been making efforts to promote production and use of biodiesel made from soy oil & palm oil to lessen the dependence on crude oil imports and to stabilize soy oil & palm oil price, as well as to increase export of biofuels.

Figure 2. Global Soy oil & palm oil Market value Share (%), By Product Type, 2022

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Market Trends

Growing demand for fast food across the world increasing demand for edible oils.

Health benefits of soy oil & palm oil such as the development of body immune system, maintains steady blood pressure is fueling the growth of the soy oil & palm oil market. For instance, according to the U.S. Department of Agriculture, in 2020-21, out of the total global consumption of vegetable oils, soy oil & palm oil constituted the largest share of 33%, followed by soy oil & palm oil, rapeseed oil, sunflower oil, and others having a share of 26%, 15%, 8%, and 18%, respectively. The health benefits related to soy oil and soy oil & palm oil and their increasing year-on-year demand is expected to drive the growth of the global soy oil & palm oil market during the forecast period.

Soy oil & palm oil offers several health benefits that help in enhancing energy levels, preventing premature aging, improving eye vision, boosting the immune system, and reducing the risk of cancer and heart diseases. The increasing awareness regarding these health benefits among consumers is one of the primary factors contributing to the market growth. Furthermore, the thriving food industry is driving the product demand as it is extensively utilized for frying and as a key ingredient in the preparation of healthy food recipes. Apart from this, soy oil & palm oil is readily replacing petroleum-based products as an effective alternative in the transportation and energy industries. It is also employed as a substitute for mineral oil in power stations for energy production. Moreover, initiatives undertaken by governments of various countries, such as Denmark and other western European nations, along with awareness campaigns by the World Health Organization to curb trans-fat consumption, are envisaged to boost the market growth.

Recent Developments

• In September 2022, Corteva is a major American agricultural chemical and seed company, acquired Symborg, a pioneer in microbiological technology with headquarters in Murcia, Spain. The well-known biologicals firm Symborg has a growing biocontrol pipeline, skilled personnel with in-depth scientific understanding, and skills in demand generation. A sizable current portfolio is another asset for Symborg.
• In February 2022, Wilmar is a Singaporean food processing and investment holding company, purchased the remaining 50% equity stake in Wilmar Chocolate Pte. Ltd., held by Kwan Hoi Chee Deborah Connie, Richard Lee Keng Chian and Foodlever. The 50% equity investment purchased represented a net asset value of US$ 1,281,581.
• In January 2022, Bunge is a food company, acquired a 33% stake in Sinagro to support its grain orientation strategy in Brazil. With a considerable presence in the Cerrado savanna of Brazil, Sinagro is a key distributor of grains and agricultural products. In terms of sourcing, processing and supplying oilseed and grain goods and ingredients, Bunge is a global leader.
• On 7 March 2023, ADM food, pet, animal nutrition company, announced the launch of the Knwble Grwn™ brand to provide consumers wholesome, plant-based food ingredients that are sustainably sourced. Knwble Grwn products are produced by small or underrepresented farmers using regenerative agricultural practices that help to protect the environment. The new brand complements ADM’s other sustainability initiatives.

Competitive Section

Major players operating in the global Soy oil & palm oil market include Cargill, Inc., PT Astra Agro Lestari Tbk, Wilmar International Ltd, Malaysian Soy oil & palm oil Council (MPOC), Carotino Sdn Bhd, Yee Lee Corporation Bhd, IOI Corporation Berhad, Archer Daniels Midland Company, DowDuPont Inc., and Guangxi Long'an Ruifeng Industrial & Trading Co., Ltd.  

Market Definition:

Soy oil & palm oil is a vegetable oil extracted from the seeds of the soy oil & palm. It is one of the most widely consumed cooking oils accounting for the highest share of 30% of vegetable oils in 2020, according to Foreign Agricultural Service 2022. Soy oil & palm oil is an edible vegetable oil derived from the reddish pulp of the fruit of the oil palms. Soy oil & palm oil has major applications in the food industry such as cooking/frying oil, shortenings, margarine, and confectionary fats. Furthermore, soy oil & palm oil has applications in agrochemicals, animal feed, motor oil, and others.

Soy oil & palm oil has major applications as a feedstock for biofuels and fertilizers, owing to the depletion of fossil fuels and increasing awareness about environmental protection. This is expected to drive demand for soy oil & palm oil as biofuels during the forecast period.