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The global soybean oil market size was USD 46.72 billion in 2020 and is projected to grow from USD 48.16 billion in 2021 to USD 60.08 billion by 2028, exhibiting a CAGR of 3.21% during the forecast period. The global impact of COVID-19 has been unprecedented and staggering, with healthy edible oils witnessing a positive impact on demand across all regions amid the pandemic. According to our analysis, the global market exhibited an increase of 9.49% in 2020. The rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.
The increasing use of soybean oil by food processors and food service operators for baked and fried food products or to sell as cooking oil in packaged bottles fuels the market growth. The recently developed biodiesel industry in various countries has begun to utilize oil to produce environment-friendly renewable fuel. This is further anticipated to drive market growth during the forecast period.
Supply Chain Disruptions amid COVID-19 to Affect Market Growth
The spread of the COVID-19 pandemic and nationwide lockdown measures have led to a trivial impact on soybeans. However, soy oil, one of the main by-products of soybean processing, has experienced a decreased consumption, mainly due to the impact of the pandemic on the foodservice sector, a most substantial user of vegetables. Likewise, as the fuel demand reduced, biodiesel consumption decreased. Demand for biodiesel has decreased primarily in the U.S., which has the largest usage of oil for biodiesel. Biodiesel demand has been growing sharply in Brazil in recent years. This demand has been impacted due to the pandemic. However, as the lockdowns uplift worldwide, the market is expected to increase across restaurants and other food service channels. The growing concerns regarding health among consumers are anticipated to drive the demand for non-GMO and organic soy products over the forecast period.
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Rising Utilization of Edible Oils across Various Food Segments to Drive Market Growth
Over the past few years, the food industry has evolved tremendously across the world. Food manufacturers and processors are exponentially investing in developing innovative products to capitalize on the growing demand among consumers. The edible oil sector is witnessing prominent growth due to its rising application in various products such as bakery, cooking, packaged foods, snacks, and food service. The growth of the edible oil sector is also largely driven by the demand for cooking oils in retail aisles. The amplifying demand for plant-based foods has increased the utilization of soybean oil, palm oil, olive oil, and coconut oil. The emerging trend of vitamin-fortified, organic, non-GMO oils among consumers to make healthy food is further driving the market growth.
Increasing Utilization in Production of Biofuel to Drive Market Growth
Biofuel is an emerging sector due to the rising concerns related to non-renewable energy sources. Various countries are now actively investing in the production of biofuels. The increased biodiesel production capacity has a huge impact on the global demand for soybean-derived oil. The use of the oil as feedstock for biodiesel production provides a higher BTU (British Thermal Units) value and burns more efficiently and cleanly. The U.S. government provides a USD 1 per gallon subsidy to biodiesel producers that produce biodiesel from virgin vegetable oil feedstock.
According to the May 2021 World Agricultural Supply and Demand Estimates report by the U.S. Department of Agriculture (USDA), the use of soybean oil for biofuel production is forecasted to be higher in the upcoming years. In June 2021, the oil’s demand on the Chicago Board of Trade soared by almost 70% due to the growing demand from the biodiesel sector. The increasing investments by the governments of various countries and fuel producers to improve the biodiesel production process is anticipated to further propel the demand for soybean oil in the upcoming years.
Expanding Application Scope in Food Sector to Fuel Market Growth
The oils and fats sector is witnessing promising growth across the globe attributed to their rising use in food manufacturing and processing. According to the USDA, soy oil is the second-largest consumed vegetable oil in the world. It is extensively utilized for cooking, frying, shortenings, and margarine. Soybean oil usage has also increased across the bakery sector, which significantly fuels market growth. The growing consumer knowledge regarding its health benefits ultimately propels market growth. This oil is one of the leading poly-unsaturated cooking oils. It has a high smoke point (257°C), which enables setting oil at higher temperatures for deep frying. The higher shelf life of soybean oil also drives its utilization in food processing and foodservice industries.
In June 2018, the Food and Drug Administration (FDA) announced that all food manufacturers are required to remove partially hydrogenated oils (PHOs) from their food products. The oil manufacturers actively invest in the interesterification of high oleic soy oil to develop shortenings that closely match the properties of PHO.
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. Palm oil, olive oil, rapeseed oil, sunflower oil, and canola oil are major competitors of this 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. Palm oil has higher saturated fat content than soybean, rapeseed, sunflower, and other oils and tends to be solid at room temperature. Palm oil is preferred for making baked goods with a flaky texture, such as biscuits and pies. Furthermore, the growing awareness regarding nutritional and healthy oils such olive oil among consumers has considerably affected the utilization of this oil across retail aisles.
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Cooking & Frying Holds Highest Soybean Oil Market Share owing to Expansion of Foodservice and Retail Sectors
The global market is segmented by application and geography.
Soybean oil is extensively utilized for cooking and frying purposes in countries such as China and India. The higher smoke point of soy oil compared to the other cooking oils has tremendously increased its use across the food service industry in Asian countries. The rising discretionary income among consumers in countries such as India, Indonesia, and China has increased the trend of dining out. This has amplified the demand for this oil for various purposes, such as bakery products and prepared foods.
The increasing use of soy oil in European countries and North America for manufacturing shortenings, margarine, and salad dressings have also significantly contributed to its rising demand. The growing demand for edible oils in the biofuel industry is expected to drive the growth of this market in the foreseeable years.
Asia Pacific Soybean Oil Market Size, 2020 (USD Billion)
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Asia Pacific to be Leading as well as Fastest-Growing Region
Rapidly growing markets in Asia Pacific such as China and India have significantly increased soy oil consumption over the past few years. The increased purchasing power of Chinese and Indian consumers has contributed to sharp increases in consumption as they can afford to purchase more oil. Although Chinese crush capacity has increased substantially, Chinese processors do not produce enough oil to meet domestic consumer demand. China is also the leading importer of this oil in the world. The evolving foodservice industry in the region is expected to drive market growth further.
The market is witnessing promising growth in North America. The U.S. is the major consumer of this oil due to the fastest growing and expanding food processing industry. This oil is extensively utilized for margarine, and shortenings are widely used in the food processing industry across the region. The rapidly growing bakery industry in North American countries further fuels its demand. The growing knowledge regarding the health benefits of organic food has significantly increased the demand for organic soy oil among consumers. The rising use of this oil to produce biofuel is expected to drive market growth in the upcoming years.
South America is experiencing substantial growth in this market as Brazil and Argentina are significant producers and exporters of this oil. Soybean processors in Brazil and Argentina sell their oil to refiners, which is processed into refined, bleached and deodorized (RBD) oil that can be sold to food processors for cooking and manufacturers that use the oil to produce biodegradable plastics and lubricants, and biodiesel. China imports most of its oil from Argentina and Brazil. The growing investment by the Brazilian government to increase biodiesel production by using soy oil is expected to drive the regional market.
Europe is witnessing strong growth in the market due to the rising utilization of soy oil for biodiesel production. The increasing government intervention to drive biofuel production has considerably fueled the market growth in the region. The highly evolved food sector in the region has changed consumer buying patterns. Consumers nowadays seek healthier oil options which boost the demand for variants such as non-GMO, non-PHO, and organic soy oil in European countries. The rising interest in plant-based food products is expected to drive the market growth across the region further.
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The Middle East and Africa market is at a nascent stage. The growth of the market is driven by the increasing use of soy oil in Iran. Iran is a major importer of this oil purchased by refiners and food processors and used in the processing of ghee, a staple food product. The rapidly increasing discretionary income of Middle Eastern and African consumers is expected to further boost the regional market growth in the upcoming years.
ADM is Investing in Facility Expansion to Fortify its Business
Archer Daniels Midland Company (ADM) is a leading food processor focusing on the expansion of its soybean activities to fortify its business in the global market. For example, in May 2021, ADM announced plans to expand its soybean crushing plant and refinery in North Dakota, U.S. This facility aims to increase the production of this oil. The global market displays a moderately consolidated structure, with certain companies holding a considerable share in the market. The major companies such as Associated British Foods, plc, Bunge and Cargill, Inc. are focusing on strategic partnerships, mergers & acquisitions and new product launches for more consolidation in the market. The entry of niche players in this market considerably increases the competition within the market, which propels the growth of the market.
An Infographic Representation of Soybean Oil Market
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The global soybean oil market research report provides a detailed analysis of the market and focuses on key aspects such as leading companies, applications, and leading applications of the product. Besides this, the report offers insights into the market trends and highlights key industry developments. In addition to the aforementioned factors, the report encompasses several factors that have contributed to the growth of the market over recent years.
Value (USD billion)
Fortune Business Insights says that the value of the market was at USD 46.72 billion in 2020 and is projected to reach USD 60.08 billion by 2028.
In 2020, the APAC market value stood at USD 21.49 billion.
Growing at a CAGR of 3.21%, the market will exhibit steady growth in the forecast period (2021-2028).
The cooking & frying segment is expected to be the leading segment based on the application in the global market during the forecast period.
Increasing utilization of soybean oil for biodiesel production is the key driving factor for the market.
ADM, Associated British Foods, plc, and Bunge are the top players in the global market.
APAC is expected to hold the highest market share in 2020.
Rising applications of soy oil in food processing and growing trend of biofuels is expected to drive the adoption.
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