The Global Edible Oils Market is projected to reach USD 268.9 billion by 2027 from USD 212.6 billion by 2022, recording a CAGR of 4.8% from 2022 to 2027. With the increasing population across the world coupled with lifestyle changes, there is a growing consumption of processed foods. Edible oils are one of the main ingredients used in processed foods. Moreover, with the ongoing research and development of novel products, such as confectionery and bakery items, ready-to-eat foods, and fast foods the role of edible oils in increasing the taste has become more significant. The constantly evolving food processing sector is further creating a huge demand for edible oils during the study period.
Edible Oils Market Dynamics
Increase in oilseed production
According to an article published in the bulletin of the National Research Center, Egypt, with growing interest in edible oils, the area under oilseeds cultivation has increased by 82%, and the production is increased by approximately over the last three decades. Furthermore, according to Organisation for Economic Co-operation and Development (OECD), 2022, the consumption of vegetable oils is estimated to reach 249 million metric tons, with the food sector accounting for the major share. The above rise in demand for oils is due to the increase in per capita use of edible oils in low and middle-income countries in the Asia Pacific. Therefore, with the increase in the production of oilseeds, the production and supply of edible oils are expected to increase in the future to satiate the growing consumer demand.
Growth in global demand for food
The Food and Agricultural Organization states that the global population has increased exponentially due to the overgrowing population and is projected to increase by 9.7 billion by 2050. Additionally, urbanization is anticipated to increase at a rapid pace, adversely impacting the global food demand. Edible oils are essential food ingredients having varied applications in households, industries and food service. Thus, the growing population, and continuously evolving needs of the consumers fueling the demand for edible oils industry.
High price volatility for edible oils
The Ukraine conflict has driven agricultural commodity prices to unprecedented high levels. The crisis has caused a sharp increase in the price of edible oils, as well as trade policy reactions globally that has further restricted supplies and driven up costs. . Prices for edible oils have increased by an average of roughly 30%. The most significantly impacted product is sunflower oil, which has increased by more than 40%. The Black Sea countries are major exporters of sunflower oil which makes up around 13% of the vegetable oils traded on international markets. Thus, the increased prices of edible oils has largely impeded the growth of the global edible oils industry.
Increase in trend of microencapsulation technology
The microencapsulation technique is a trending technology is being increasingly adopted by the growing food industry. According to a study by the Federal University of Santa Catarina, Brazil, 2019, oil encapsulation can prevent or decrease oxidation reactions and increase the range of its applications in the food industry. In processed food products, oil encapsulation aids in the retention of flavor, shelf life, anti-oxidation, and storage time of the food products. Due to its benefits in a wide range of food applications, the encapsulation of edible oils is slowly gaining prominence in the food industry, globally, aiding in the expansion of the global edible oils market.
North America has been witnessed to have numerous growth prospects for the edible oils market with a CAGR of 3.27% during the forecast period (2022-2027)
North America is one of the most potential markets for edible oils owing to the growing demand for processed food products influenced by hectic lifestyles and changing eating habits of the region. The number of food processing companies in the North American market is rising at a fast pace. The preferences of modern-day consumers are increasingly inclining toward fast foods, which have very high concentrations of fats and oils. The market in the US is driven by robust demand for soybean oils that are extensively utilized in savory & snacks, convenience foods, and indulgent bakery and confectionery products. The United States is the largest producer and exporter of soybeans. Soybeans account for over 90% of US oilseed production. Companies such as Cargill, Incorporated and Bunge Ltd are giant players in the edible oils market of US. These companies have occupied major market shares through acquisitions, expansions, mergers, significant partnerships, and upscaling their production capacity and efficiency. The future growth trajectory of edible oils in the US hinges on the ability of global giants to develop healthy, versatile, and high sensory profiles of novel edible oils.
Key Market Players
Top edible oils companies include Cargill, Incorporated (US); Archer Daniels Midland Company (ADM); Bunge Limited (US); Louis Dreyfus Company (Netherlands); Wilmar International Limited (Singapore); and Adani Wilmar Limited (AWL) (India); Associated British Foods PLC (ABF) (UK); Sime Darby Plantation Berhad (Malaysia); and Borges International Group, S.L.U. (Spain).
