Fats Oil Market

Growing food demand propels use of vegetable oils, driving market growth

The expanding food demand promotes consumption of vegetable oils, driving the market CAGR for fats and oils. Edible oil products such as sunflower oil, palm oil, soybean oil, and canola oil, among others, are often purified using various procedures such as degumming, neutralizing, bleaching, and deodorizing to provide uniformity in high-quality oil. Minor components, known as impurities, are physically or chemically separated during the purification process. High-quality edible oils are often referred to as refined oils.

This method helped the company produce high-quality edible oils by including enzymes into the development process.

Additionally, Unpredictable severe weather circumstances, such as droughts, floods, frost, and earthquakes, have impacted cocoa bean production in top cocoa-producing countries. Africa, particularly the Ivory Coast and Ghana, is the world's largest cocoa producer, accounting for more than 70% of production. Excessive human activity in the form of animal husbandry and agriculture has also put the habitat under stress, affecting output. As a result of the market's demand and supply mismatch for cocoa, the price of cocoa will rise, increasing demand for substitute items such as specialty fats.

During the course of the forecast period, it is anticipated that these variables would positively affect the market under study.

Moreover, the number of supportive policies established by governments around the world to boost the production and use of vegetable oils has increased. The amount of soybean oil utilized in biofuel production in wealthy countries has been constantly increasing. Also, palm oil accounts for around 20% of the manufacturing of biodiesel and renewable diesel in the European region, fueling the growth of the Fats and Oil Market.

The increasing awareness of health and wellness among consumers appears to be a significant driver for the Global Fats and Oil Market Industry. As individuals become more informed about the nutritional aspects of their diets, there is a noticeable shift towards healthier fat options, such as olive oil and avocado oil. This trend is reflected in the growing demand for products that are low in saturated fats and high in unsaturated fats. Consequently, the market is projected to reach 250.5 USD Billion in 2024, highlighting the impact of health consciousness on consumer preferences and purchasing decisions.

The increased demand for biofuels is likely to play a pivotal role in shaping the Global Fats and Oil Market Industry. As countries strive to reduce their carbon footprints and transition towards renewable energy sources, biofuels derived from vegetable oils are gaining traction. This trend is particularly evident in regions where governments are implementing policies to promote biofuel production. The integration of fats and oils into biofuel production not only supports energy sustainability but also contributes to the overall growth of the fats and oils market, potentially leading to a robust market landscape in the coming years.

The expansion of the food processing sector globally seems to be a crucial factor influencing the Global Fats and Oil Market Industry. As urbanization continues to rise, there is an increasing demand for processed and convenience foods. This trend drives the need for various fats and oils as essential ingredients in food production. For instance, the use of palm oil in baked goods and margarine has surged, contributing to the market's growth. With projections indicating a market value of 410.7 USD Billion by 2035, the food processing sector's expansion is likely to sustain the demand for diverse fat and oil products.

The growing trend towards veganism and plant-based diets appears to be reshaping the Global Fats and Oil Market Industry. As more consumers adopt plant-based lifestyles, there is an increasing demand for plant-derived oils such as coconut oil and sunflower oil. This shift is driven by the perceived health benefits and environmental considerations associated with plant-based diets. The market is likely to respond to this trend by diversifying product offerings to include more plant-based fats and oils, thereby catering to the evolving preferences of consumers seeking sustainable and health-conscious options.

Technological advancements in oil extraction methods may significantly enhance the efficiency and yield of fats and oils. Innovations such as cold-press extraction and supercritical fluid extraction are becoming more prevalent, allowing for higher quality oils with better nutritional profiles. These advancements not only improve the extraction process but also align with consumer preferences for natural and minimally processed products. As a result, the Global Fats and Oil Market Industry is expected to benefit from these technologies, potentially leading to a compound annual growth rate of 4.6% from 2025 to 2035.

By region, the study provides the market insights into North America, Europe, Asia-Pacific and Rest of the World. The North American Fats and Oil Market area will dominate this market, because of its significant agriculture industry.  North America offers rich resources and favourable climatic conditions for cultivating oilseeds such as soybeans and canola, which are key suppliers of vegetable oils. This ensures that the region has a consistent and predictable supply of raw materials for the manufacturing of fats and oils.

Further, the major countries studied in the market report are The US, German, France, the UK, Canada, Italy, Spain, India, Australia, South Korea, China, Japan, and Brazil.

Figure 2: FATS AND OIL MARKET SHARE BY REGION 2022 (USD Billion)

Source Primary Research, Secondary Research, Market Research Future Database and Analyst Review

Europe Fats and Oil Market accounts for the second-largest market share Because of its health benefits and practicality, European sales of virgin coconut oil for industrial use have increased dramatically in the recent decade. Further, the German Fats and Oil Market held the largest market share, and the UK Fats and Oil Market was the fastest growing market in the European region

The Asia-Pacific Fats and Oil Market are anticipated to expand between 2023 and 2032 with the quickest CAGR. This is because of expanding population and increased fat and oil consumption, notably in Asian countries such as China and India. Moreover, China’s Fats and Oil Market held the largest market share, and the Indian Fats and Oil Market was the fastest growing market in the Asia-Pacific region.

Leading market players are putting a lot of money in research and development in order to expand their product lines, which will help the Fats and Oil Market, grow even more. Additionally, market players are engaging in a range of calculated initiatives to increase their worldwide presence, with important market developments involving the introduction of new products, contracts, M&A transactions, increased investment, and cooperation with other enterprises. To grow and endure in an increasingly cutthroat and dynamic market, Fats and Oilindustry must provide reasonably priced goods.

One of the main business strategies employed by manufacturers is to manufacture locally in order to reduce operating expenses in the Fats and Oil industry to help customers and expand the market segment. In recent years, the Fats and Oil industry has given the food business some of the biggest benefits. Major players in the Fats and Oil Market, including Cargill Incorporated, Bunge Limited, The Archer Daniels Midland Company, Fuji Oil Holding Inc., Olam International, Wilmar, International Limited, Musim Mas Group and others, are making investments in R&D activities in an effort to raise market demand.

Cargill, Inc. is a multinational food firm headquartered in Minnetonka, Minnesota, and incorporated in Wilmington, Delaware.  It was founded in 1865 and is the largest privately held firm in the United States by revenue. In November 2021, Cargill spent approximately USD 35 million to expand the Malaysian vegetable oil producing facility. The plant has dry palm fractionation capabilities, allowing it to produce specialty fats for chocolates, coatings, and spreads.

The Archer-Daniels-Midland Company, or ADM, is an American food processing and commodities trading firm headquartered in Chicago, Illinois, founded in 1902. The company processes cereal grains and oilseeds into products that are sold in the food, drink, nutraceutical, factories, and animal feed industries at more than 270 factories and 420 crop procurement sites globally. In May 2021, ADM spent around USD 350 million to construct a soybean crushing facility in North Dakota, USA. The plant is expected to be completed and operational by 2023. Soy crushing, oil refining, and soy-related product processing are among the plant's functions.