Global Increase In Edible Oil Consumption
According to studies by Stallion Market Research, the global Edible Oil Consumption market is projected to grow at a CAGR of 5.14% during the forecast period of 2020 to 2025. Our study also found that the edible oil market in North America is projected to grow at a CAGR of 4.01% during the forecast period 2020-2025. The global vegetable oil market has been segmented by type, including palm oil, rapeseed oil, soybean oil, olive oil, sunflower oil, etc. The market is mainly driven by consistent demand for organic health-based products. The rise in demand for organic food habits has emerged due to the rising consciousness among consumers. As a result, maintaining high-quality edible oils /cooking oils is a must.
Besides food and feed purposes, vegetable oils are getting prominence as lubricants for industrial and transportation applications. Demand for high-quality oil for various application areas is expected too. The potential benefits of edible oils include biodegradability and resource renewability, and providing satisfactory performance for industries. Showing excellent results as greases and fuels, such oils are ubiquitous. However, the overuse of these oils puts pressure on the ecosystem. Government measures are primarily directed to reduce the use of palm oil. Regulations can hamper market growth during the forecast period.
Global Consumption Trends
Increasing Consumption of Olive Oil
The consumption of olive oil has doubled over the last 25 years in North America. The associated health benefits related to olive oil have led to its increasing demand. Olive oil is mainly beneficial for its antioxidant properties. Olive oil also has a wide range of applications in the pharmaceutical industry. The treatment of many chronic diseases can be made easy with olive oil. Italy, Spain, and the United States are the leading olive oil-importing countries. Together their contributions comprise a 45.8% share of the global import.
Largest Market Share of Olive Oil
According to the USDA report, after China, the United States is the leading soybean oil producer. In the past one or two years, the country has produced 10,975 thousand metric tons of soybean oil and exported 881 thousand metric tons. Domestic consumption was mainly led by the consistent demand for soybean oil for fuel applications. There was a consumption value of 10,659 thousand metric tons. Therefore, this restricted the export value of the product. The consumption of palm oil in the United States is on the lower side. Manufacturers are investing in increasing palm oil application in the country because of its lower price and wide application in the food and personal care segments.
Consumption Patterns in Developing Countries
Edible oil consumption has witnessed a significant rise in developing countries. The rise is due to increasing demand from the conscious growing population, rise in overall household income, and surging retail sector. The retail industry will be responsible for advancing edible oils due to a robust supply chain of chain edible oil products and retail outlets. Edible oil manufacturers are adopting advanced processing techniques to offer cost-effective and healthier oil. However, they are yet to keep up with the production of Edible Oil Consumption as per the demand.
Current Market Situation
Segmentation of the edible oil market can be done based on type, end-users, and geography.
- Type: The edible oil market includes – palm oil, olive oil, canola oil, sunflower oil, specialty blended oil, and corn oil. The demand for edible oils is due to the increased consumption of fried foods among people.
- End-users: The market for edible oil can be divided into food processors, retail, and foodservice. Improvisations in dietary habits enhanced living standards, and increasing consumer demand for healthy edible oil supports the global edible oil market’s growth.
- Geography: Countries like Europe, Latin America, the Middle East, and Africa, North America, and the Asia Pacific are the major segments of the edible oil market. Developing nations like China and India also are a massive market for edible oil. China is one of the leading consumers of edible oil across the world, followed by Europe.
The edible oil market’s crucial players have an extensive product portfolio and broad geographical presence to address numerous consumer demands. Stallion Market Research’s report also provides specific market factors and changes in market regulations that impact the edible oil market’s current and future trends. Data points such as replacement sales, new sales, regulatory acts, country demographics, and import-export tariffs are significant pointers used to assess the market scenario for specific countries. Presence and availability of North American brands and the challenges faced due to substantial or scarce competition from local and domestic brands impact sales channels. Altogether these factors are considered while providing forecast analysis of the country data. Due to the coronavirus pandemic’s year-long impact, the edible oil refineries have had a downfall in their operating capacity to around 50%. The primary reason behind this setback was the deficiency of raw materials and delays in the import clearance. The reduced functional capacity is also related to the lockdown measures and the resulting delays in harvesting certain oilseeds across provider countries. Top manufacturers like Wilmar International, Archer Daniels Midland Company, Cargill, and International Foodstuff Company Holdings Limited expand their geographical existence to gain concentrated market share. Collaborating with buyers and strategies to build new products remains a critical success factor. The oilseeds farmers in China, Indonesia, and India will eventually force manufacturers to establish their planned business units in the vicinity in increasing numbers over the next few years.
Palm oil prices are expected to decrease from their current levels in the upcoming six months due to reduced demand caused by the Covid-19 pandemic. The global vegetable oil market is categorized yet competitive. The major strategies implemented by the key players of the market include product innovation, expansion, partnership, and mergers and acquisitions. Some of the prominent players are Wilmar International Limited, Bunge Limited, Golden Agri-Resources, and Sime Darby Plantation Berhad. These major market players have a broad geographical significance and an elaborate product portfolio to cater to numerous consumer demands. Stallion Market Research foresees these factors to be responsible for shaping the edible oil market’s future trends.
Issues and Uncertainties
Stallion Market Research expects that per capita consumption of higher value edible vegetable oils, such as sunflower oil and rapeseed oil, is prone to change in own prices as GDP per capita declines, own-price elasticities for higher value edible vegetable oils decreases. This figure suggests that demand for higher-value edible vegetable oils is more sensitive to own price change in low-income countries than high-income countries. Income disparities are higher for lower value edible vegetable oils than higher value edible vegetable oils. Compared to the other edible vegetable oils, edible palm oil’s income elasticity is relatively high in all four GDP categories. The somewhat higher income elasticity for edible palm oil indicates that demand for edible palm oil increases as GDP per capita increases in developing countries. Thus, producing countries like Indonesia and Malaysia may continue to supply. The growing global demand for palm oil will rise as consumer prosperity grows in developing countries. If these countries face supply restrictions in the near future, then the demand structure for vegetable/edible oils will adjust.
The global market of Edible Oil Consumption growth is predicted to rise rapidly during the forecast period, from 2021 to 2027. In 2021, the market will grow at a steady rate and with the rising adoption of strategies by the major players. The edible oil market will rise beyond the expectant capacity. The primary reasons behind such spectacular growth are – increasing income, changing food habits, urbanization, and deeper penetration of processed foods. Due to persistent stagnant domestic vegetable oil supplies, vegetable oil import volumes will continue to fill most of the supply-and-demand gap over the next ten years. Palm oil, sunflower oil, and soy oil will penetrate regional markets further in the future. And, the packaged edible oil segment will lead the way for the future growth of the industry.