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The global market for palm oil derivatives is driven by its functional superiority, itsfavorable composition and its application across foods such as confectionery, dairy, supplements, etc. The raw material for these derivatives is also abundantly available. Nearly 60-65% of the palm oil consumed globally is in the form of derivatives. The per hectare oil production from palm is one of the highest as compared to other vegetable oil sources.
Processing of olein and stearin yield the derivatives which are utilized as an ingredient in the bakery, margarine, confectionery, cooking oils, emulsifiers, as well as snack foods. Derivatives of palm kernel oil are used in cosmetics as well as in confectionery and margarine.
The unsustainable palm oil production taking place on a rampant scale presents a major impediment to the growth of the market. The pricing and demand dynamics of palm oil is significantly affected by its large environmental footprint. Additionally, the growing popularity of palm oil alternatives in the developed markets of Europe is restraining the growth of palm oil derivatives.
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Palm oil – a vegetable oil that is so ubiquitous that it is one of the most consumed edible oils, the palm oil has emerged as a suitable material/substrate bases for many manufacturing companies owing to its versatility and flexibility apart from conferring functions and benefits. Palm oil derivatives are further obtained by refining of palm oil. The market for palm oil derivatives holds immense significance because almost 60-65% of palm-oil consumption in the global marketplace is in the form of derivatives.
Major market players performing in global palm oil derivatives market include Cargill, Wilmar International Ltd., Golden Agri-Resources Ltd., London Sumatra, BASF, and Astra Agro Lestari. Companies such as BASF are embarking on the sustainability of palm oil derivatives by making conscious efforts to transfer its full line of offerings to certified sustainable palm oil.
Crude palm oil and palm kernel oil remain leading derivatives in the global marketplace due to their superior functionality, these derivatives are known to exhibit a high degree of process-ability by which they can be blended into various formulations resulting in a wide range of products with different characteristics. The strong utilization of this derivative in processed food and foodservice channels is expected to boost their demands during the forecast period.
The other derivatives such as olein and stearin exhibit wide application spectrum spanning across food and beverage, cosmetics, and animal feed sectors. Glycerine is extensively utilized in cosmetics application wherein it acts as a humectant, thickener, and binding agent in lotions and creams. L’Oréal accounts for the consumption of 0.1% of the global palm oil production.
Palm oil derivatives are an economical feedstock for the production of biofuel/biodiesel, the growth forecast for which is expected to drive the consumption of these derivatives. The biodiesel plants across Southeast Asia and Europe are known to utilize these derivatives efficiently and more than half of all the palm oil imported into Europe is utilized as fuel.
North America and Europe are leading regional markets for palm oil derivatives owing to their robust consumption scenario. Cosmetics and personal-care application is expected to witness higher consumption growth for palm oil derivatives in these region.
The rising demand from different application sectors is fuelling the consumption of palm oil derivatives in these regions. The value-addition coupled with low cost of production is further complimenting their market growth.
Indonesia and Malaysia are the two major global hotspots in palm oil production. The Asia Pacific as a region also has a two leading market in term of palm oil consumption – India and China. Nonetheless, the per capita consumption of palm oil and its derivatives in these countries remain far below to that of developed western markets. Food processing industry of these emerging markets is expected to play a key role in driving the future consumption of palm oil derivatives.
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