Global Fats and Oils Market to Reach USD 323.7 Billion by 2029: Key Growth Drivers and Trends
The global fats and oils market size is projected to reach USD 323.7 billion by 2029 from USD 271.8 billion in 2024, at a CAGR of 3.6% during the forecast. Growing consumer demand for healthier options in their diet and increasing adoption of fats and oils in various foodstuffs are boosting the fats and oils market growth. Better awareness of the nutritional value of specific oils and developments regarding processing and refining techniques act as drivers. Moreover, the expansion of culinary practices and increasing development of functional oils boasting health benefits add to the growth. Long-term investments in increasing production capacity and enhancing supply chains also uphold this growth trend. For example, Cargill’s (US) launch of Gemini Pureit and refinery upgrade in Nellore boosts its position in India’s fats and oils market by expanding production capacity and addressing demand in South India. This strategic move enhances supply chain capabilities, reinforces market leadership, and caters to the significant regional consumption of sunflower oil.
Fats and Oils Market Growth Drivers:
- Health and Nutrition Trends: As consumers become increasingly health-aware, there’s growing demand for healthier oil alternatives, such as olive oil, avocado oil, and high-oleic variants. The push for trans-fat-free and low-saturated-fat formulations is encouraging manufacturers to invest in product innovation and reformulation.
- Plant-Based and Vegan Movement: The shift toward plant-based diets has significantly boosted the demand for vegetable-derived oils. Coconut, canola, and sunflower oils are seeing rising popularity due to their perceived health benefits and suitability for vegan products.
- Biofuel Expansion: With the global emphasis on renewable energy, fats and oils—especially waste cooking oil and palm oil—are increasingly used in the biofuel and biodiesel sectors. This adds a strong industrial demand component to what was once predominantly a food-centric market.
- Sustainability and Ethical Sourcing: Concerns over deforestation and unethical labor practices, particularly linked to palm oil, are driving a demand for sustainably sourced and RSPO-certified oils. Brands are under pressure to demonstrate transparency and environmental responsibility throughout the supply chain.
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Vegetable Sources to Lead Fats & Oils Market Share During Forecast Period
Vegetable-derived fats and oils are expected to maintain dominance in market share throughout the forecast period. This is largely due to their versatility, recognized health benefits, and widespread availability. Oils like soybean, palm, and sunflower are widely used in cooking and food processing, favored by consumers for their diverse applications. They offer essential fatty acids and are generally considered healthier alternatives to animal fats. Additionally, advances in agricultural techniques and biotechnology have boosted vegetable oil production, ensuring a steady supply at lower costs. Their broad usability across food and industrial sectors solidifies their leading position in the market.
Food Applications to Dominate Fats & Oils Market
The food segment is projected to command the largest share of the fats and oils market. Fats and oils play a crucial role in enhancing flavor, texture, and shelf life in numerous food products. They contribute important qualities such as crispiness and richness in cooking and baking. Moreover, they act as carriers for fat-soluble vitamins and flavors, which are vital for consumer acceptance. The rising demand for processed and convenience foods, along with consumers’ growing appetite for diverse culinary experiences, further drives the dominance of food applications within this market.
The Asia-Pacific region dominates the Fats & Oils Market Share.
The increasing pace of urbanization processes, rise in disposable incomes, and changing dietary patterns toward processed and convenience foods place the Asia-Pacific region at the top position with the highest CAGR in the fats and oils market. Given the growing population and expanding middle class, there is an increasing demand for edible oils for use in cooking and food processing. Growing fast food consumption and a developing food service industry further add to the growth in the market. Strong economic development and improvement in distribution networks also aid the leading position of the region in the global fats and oils market.
Leading Fats and Oils Companies:
The key players in the market are ADM (US), Wilmar International Ltd (Singapore), Cargill, Incorporated (US), Bunge (US), Kaula Lumpur Kepong Berhad (Malaysia), Olam Agri Holdings Pte Ltd (India), Manildra Group (Australia), Mewah Group (Singapore), Associated British Foods plc (UK), United Plantations Berhad (Malaysia), Ajinomoto Co., Inc. (Japan), Fuji Oil Co., Ltd. (Japan), Oleo-Fats (Philippines), Borges Agricultural and Industrial Edible Oils, S.A.U. (Spain), K S Oils Limited (India), CSM Ingredients (US), SD Guthrie International Zwijndrecht Refinery B.V. (Netherlands), Musim Mas Group (Singapore), Richardson International Limited (Canada), and AAK AB (Sweden).
Recent Developments in the Fats and Oils Industry
- In June 2024, Bunge (US) and Olleco (UK) announced a new joint venture that will take care of the entire lifecycle of edible oils. This new venture will deliver high-quality oils to the food service and food manufacturing markets across Europe—excluding the UK and Ireland—while ensuring used cooking oil collection for reprocessing into feedstock for renewable fuel production. The plan showcases the commitment of both companies to sustainability and the circular economy.
- In November 2023, Cargill (US) completed a multiyear expansion and modernization project of its soybean processing plant in Sidney, Ohio. The investment in Soy is still another major commitment to processing growing demand for soy products in all key markets. The upgraded facility almost doubled its previous crush capacity, increasing market potential both for local farmers and for feed customers. It will not only increase demand for soybeans but also improve operational efficiency, enabling customers’ faster and more efficient unloading and loading processes.
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