Material Insights · Understanding the Material World

Palm oil: Overview

From frying pans to shampoo: where palm oil hides

What this tab covers What the commodity is used for, why, in what volumes and with what alternatives, and its chain from mine or field to end user. Also the latest price moves, top recent news, three things to know, and buttons into each tab.

Key uses

UseShareAnnual volumeWhy this commodityAlternatives
Food: cooking and frying oil, vanaspati, margarine, bakery and confectionery fats, instant noodles, snacks40%Indonesia 9.83 Mt in 2025; most of the 32.3 Mt Indonesia exports and the 15.3 Mt Malaysia exports also end in foodbasis Palm is the cheapest major vegetable oil and the highest-yielding oil crop. It is semi-solid at room temperature, so it can replace hydrogenated fats without trans fats, and it is stable for deep frying. Fractionation gives liquid olein for cooking and solid stearin for fats. India's loose and packaged cooking oil market relies on it. GAPKI 2025 data (InfoSAWIT, 16 March 2026) Soybean oil
Sunflower oil
Rapeseed oil
Groundnut, mustard and rice bran oil (India)
Shea and other speciality fats (confectionery)
Biodiesel (Indonesia B40, Malaysia B10/B20)51%Indonesia 12.70 Mt in 2025, up 11% on 2024 with the move from B35 to B40basis Indonesia uses its own palm oil to cut diesel imports and support farm prices, funded by an export levy. Palm methyl ester is cheap relative to other feedstocks. GAPKI estimates that the B50 rollout could lift biodiesel use to 16.3-17 Mt a year, which would cut export supply. GAPKI 2025 data (InfoSAWIT, 16 March 2026); The Jakarta Post, 26 August 2026 Soybean oil and rapeseed oil (other countries' biodiesel)
Used cooking oil and tallow
Fossil diesel
Oleochemicals: soaps, detergents, cosmetics, fatty acids and alcohols, glycerine9%Indonesia 2.23 Mt domestic use plus 5.08 Mt oleochemical exports in 2025basis Palm oil and especially palm kernel oil are rich in lauric and palmitic acids, which make good surfactants and foaming agents. Supply is large and cheap, and oleochemical plants sit next to refineries in Indonesia and Malaysia. GAPKI 2025 data (InfoSAWIT, 16 March 2026) Coconut oil (lauric oils)
Tallow
Petrochemical surfactants
Animal feed and energy from by-products (palm kernel cake, palm fatty acid distillate, empty fruit bunches, mill effluent biogas)n/a GAR's mills produced 582 thousand t of palm kernels in 2025 alongside 2,187 thousand t of CPObasis Every tonne of crude palm oil comes with kernels (about 5.5% of fruit bunch weight at GAR), fibre and shells that mills burn for steam and power. Kernel cake is a low-cost feed for dairy cattle. Golden Agri-Resources FY2025 performance presentation Soybean and copra meal (feed)
Coal and biomass (boiler fuel)
Shares are Indonesia's domestic use by end market in 2025 (GAPKI). Indonesia grew 59% of world palm oil in 2023 (FAOSTAT). Exports, which go mainly to food in India, China, Pakistan and Africa, are not in these shares; a world food, industrial and biofuel split was not found. For scale: USDA puts world palm oil consumption at 78.1 Mt in 2026/27 (USDA PSD, Oct 2026), so Indonesia's 12.7 Mt of biodiesel alone is about 16% of world use (derived).

From field to user

  1. Nursery and planting Seedlings from selected high-yield seed are planted in blocks and give no crop for about three years; palms are replanted after about 25 years. GAR replanted 16,800 ha in 2025 (GAR FY2025).
  2. Harvesting fresh fruit bunches (FFB) Bunches are cut by hand all year. Malaysian estates averaged 17.77 t FFB/ha in 2025 (MPOB).
  3. Milling within 24-48 hours Bunches are sterilised, threshed and pressed. Oil extraction rate was 19.74% in Malaysia in 2025 (MPOB) and 20.7% at GAR.
  4. Bulking and refining Crude palm oil (CPO) is refined, bleached and deodorised (RBD) and fractionated into olein and stearin, at origin or in importing countries such as India.
  5. Export shipping Indonesia exported 32.3 Mt in 2025, 70% as processed oil; Malaysia exported 15.3 Mt, with India the top buyer at 2.66 Mt.
  6. Destination refining and packing Indian port refineries (Kandla, Mundra, Kakinada, Haldia) refine CPO and pack it, or blend it into other oils and vanaspati.
  7. End users Households, restaurants and food processors; biodiesel blenders; soap, detergent and cosmetic makers.

Price movement snapshot 2026-10-25

Palm oil (World Bank monthly) 1,180 $/mt Month 2026-09 1 week no daily price 6 months +1.1% World production 79.6 m tonnes, 2023 Largest producer Indonesia 59.18% of world

Three things to know

  • Indonesia and Malaysia produced 82.5% of the world's palm oil in 2023 (FAOSTAT).
  • Palm oil output rose from 11.4 Mt in 1990 to 79.6 Mt in 2023 (FAOSTAT).
  • Wilmar and Olam own palm plantations and mills, integrating upstream to avoid bilateral-monopoly bargaining (Pirrong).

Top recent news snapshot 2026-10-25, last 30 days

Chemicals made from it

Srf SurfactantsFA Fatty acidsFAl Fatty alcoholsGlyc Glycerine

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