The overall palm oil market relies on two countries, Indonesia and Malaysia, for the worldwide production, as the two regions account for more than 85% of the worldwide production, according to a report from CompaniesandMarkets.
On the other hand, India, Indonesia and China are among the major consumers of palm oil worldwide.
Since the palm oil consuming regions do not have much shares in the palm oil production, therefore much of their requirements are met through imports from the major palm oil producing regions.
It has been estimated that the growth prospects of palm oil in Malaysia are likely to decline in the coming years from a combination of scarce land availability and an aging national tree population and thereby a declining yield growth.
On the other hand, since Indonesia has excellent future growth prospects with a predominantly young tree population, increasing yields, and expanding acreage, the production of palm oil in the region is expected to further increase in the coming years.
Dominant oil product
Palm oil, which is extracted from the fruits of palm trees, has been one of the major edible oils consumed worldwide.
It is the dominant oil category in the worldwide vegetable oil market in terms of both production and consumption.
Largest production of the palm oil, among all types of vegetable oils can be attributed to the fact that palm oil offers the highest yield among all other vegetable oils, and thereby provides high profitability.
It has been found that palm oil provides maximum land efficiency, and thereby despite having the minimal amount of land under oil palm plantation worldwide, its production is largest among the other competing oils.
Its dominance in the consumption patterns is a result of its cheap prices, which makes it highly affordable.
Land and production expansion
The land under palm oil plantations had been on a rise for the past years, which resulted in an increase in the palm oil production.
Also, a continuous increase in the oil palm yield due to the increased investments in the research and developmental activities have contributed to the increase in production.
Presently, around 80% of the global palm oil output is used by the food sector. However, its consumption in non-food areas is increasingly becoming important, that is contributing to the demand as well as higher prices for palm oil worldwide.
Usage in soaps, detergents and surfactants, cosmetics, pharmaceuticals, nutraceuticals and some household and industrial products has been growing because of the move away from petroleum-based products.
Biofuels remain one of the important drivers for the increasing consumption of the palm oil in the coming years. The increasing demand of palm oil from the emerging countries is also expected to contribute to the palm oil industry in future.
It extensively covers the palm oil market in the two major producing regions, Malaysia and Indonesia; as well as the two major consuming regions, India and China.
The report discusses the major drivers and key issues related to the palm oil industry.
The four major players in the palm oil industry include Wilmar International, Sime Darby, IOI International, and PT Astra Agro. All these players have been profiled in the report, along with their financials and strategies for growth.