Fat and Oil Market Report: Trends, Forecast and Competitive Analysis to 2035

Fat and Oil Market

The future of the global fat and oil market looks promising with opportunities in the food, industrial, and animal feed markets. The global fat and oil market is expected to reach an estimated $324.1 billion by 2035 from $200.3 billion in 2027 with a CAGR of 6.2% from 2027 to 2035. The major drivers for this market are the increasing demand for healthy cooking oils, the rising popularity of plant-based fats, and the growing use of fats in processed foods.

• Lucintel forecasts that, within the type category, oils is expected to witness higher growth over the forecast period due to more use cases in food processing and industries.
• Within the application category, food is expected to witness the highest growth over the forecast period due to increasing use of convenience, packaged and processed food.
• In terms of regions, APAC is expected to witness the highest growth over the forecast period due to large and growing food processing industry.

Emerging Trends in Fat and Oil Market

During the next several years, the fat and oil market is expected to transition to a marketplace focused on source traceability and lower environmental impact, while improving flexibility in formulation. Increasing demand for biofuels and oleochemicals, in conjunction with traditional edible oil and animal feed markets, will create additional challenges for industry segmentation. Lucintel expect these changes will affect industry structure and margin.

• Sustainability: Corporate and regulatory pressures will continue to shift the palm, soy and animal fat supply chains between 2025 and 2030. Improved supply chain transparency will encourage more segregated and/or certified supply.
• Biofuels: The IEA projects the biofuels market will grow by 25 billion Liters between 2024 and 2030. increased demand will divert edible oils and fats, especially from the feed markets, to biofuels. Volatile and disruptive markets are expected through 2028.
• Health-related Reformulation: During the period 2025-2027, continual attempts will be made by food manufacturers to remove trans fats while considering limitations on saturated fats, taste, and the shelf life of food products. Limiting trans fats to 2 g per 100 g of food will further prioritize efforts in reformulation by food manufacturers.
• Digital Track and Trace: During the same period, food processors will implement batch level tracking systems, mass balance certification, and other tracking systems. Preparations to meet the requirements of the European Union's Drug Laws (EUDR) 2013 forced food processors to require mass balance certification from their suppliers. Digital records will resolve supplier qualification and prevail in court in cases related to supply.
• Alternative Supply Sources: Disruption in international shipping, combined with the adoption of protectionist and progressive climate policies, will result in food processors alternating the supply sources they use. India will continue to source 15 million tons of edible oils. Processors will be able to improve their supply security; however, it will increase their financial risks.

The global market for edible oils and fats will continue to be risky due to variables including agricultural production, freight costs, and raw material policy. The most successful companies in this market will be the ones that can integrate all three variables (demand, sourcing, and processing) in a coordinated manner. The fastest growth and most profitable opportunities will be directed at companies that can differentiate their offerings based on formulation, processing, and raw material sourcing.

Recent Developments in the Fat and Oil Market

2025-2027 should be a busy cycle for the market for fats and oils, especially with increasing demand for renewable diesel. Other factors contributing to busyness of the market include increased supply and supply chain risks caused by the environment, and mergers and acquisitions (consolidation) in the industry. During this period, Lucintel expects an investment shift from the production of conventional edible oils to the production of specialty oils and fats. This is attributable to increased demand for specialty fats and oils, and the need to increase the environmental sustainability of the petrochemical industry.

• Consolidation: Bunge completed its merger with Vinterra in 2025 to create an agribusiness company valued at around 34 billion dollars. The merger left the industry and the processor market concentrating even further. Smaller processors are expected to follow Bunge's example and either merge or acquire with competitors.
• Expansion of Crushing Capacities: ADM's investment to construct a soybean processing facility in Spiritwood, North Dakota, completed in 2025, increased U.S. soybean processing and cracking capacity. The increased capacity further decreases the location of value addition for the U.S. oilseeds industry.
• Renewable Diesel Contracts: In January 2025, Neste announced a multi-year contract with International Airlines Group to supply 2.5 million tons of sustainable aviation fuel by 2030. By 2025, contracts for sustainable aviation fuels will increase and create a greater demand for used cooking oils and other fats, thereby limiting the supply available for conventional biodiesel.
• Traceability Regulation: Following a recent adjustment period, the European Union's deforestation regulation will go into effect in December 2025. In 2025, European refiners will be required to identify and track the supply of soy and other agricultural products. As a result, certified supply will increase, and costs will decrease, for refiners. The regulation is expected to change the soy and other vegetable oil refining industry in Europe.
• Technology Commercialization: In February 2025, Firmenich and DSM Commercialized Vertis Casolaro, a canola protein ingredient. The new product is expected to facilitate the commercialization of other value-added products from oilseed processing and increase margins for processors.

Inter-industry competition to secure feedstocks will continue through 2027. Processing oilseeds to produce food increases the certainty of the margin; however, processors are exposed to more price volatility. Long term, processors with direct relationships with farmers, and flexible refining capacity to produce waste-oil will increase market share. Other processors will find it more difficult to remain in the industry due to increased competition and regulation.

Strategic Growth Opportunities in the Fat and Oil Market

The market for fats and oils is expected to change between 2024 and 2026, moving away from bulk-supplied food and toward lower-carbon, tracked-and-traced forms of supply. Other factors, including the development of alternative methods and technology, changing consumer and industry preferences and regulations, are expected to broaden the market. Lucintel anticipates that, in the foreseeable future, the market will reward players able to differentiate and capture value-added, higher-margin segments as opposed to players able to capture and supply value in the lowest, or average, segments.

• Renewable Feedstocks: The supply and value of renewable feedstocks are expected to increase, given the focus on reducing the carbon footprint of the transportation sector. IATA expected that, by May 2025, the global supply of Sustainable Aviation Fuels (SAF) would be 1.9 billion Liters. Global aviation, however, is expected to require over 235 billion Liters of fuel by 2030. Given this expected demand, it is likely that value-adding and premium feedstock collection and supply networks would be established to meet the expected SAF demand.
• Specialty Nutrition Oils: Edible oils containing specific fatty acid compositions (i.e. high oleic fatty acids) as well as lipids from other renewable sources (algae) are expected to find application in medical and other specialty foods. The FDA has also authorized the use of lipid-based ingredients in food and designated a number of lipid-related health claims. Given these regulatory developments and the evolving market, premium products would likely experience greater market growth than regular, edible oils.
• Traceable Sustainable Sourcing: Processors and retailers want verified sourcing documents and deforestation and emission records. The EU's Deforestation Regulation will require large operators to stop purchasing commodities associated with deforestation by December 2025. There will be an increase in software and certification and a segregated supply chain for at-risk commodities (i.e. palm oil and soy).
• Growth in Emerging Market Processing: Many developing countries have the potential for domestic edible oil processing. Indian edible oil processers imported an estimated 16.5 million tons of edible oil in 2024-2025. Further, domestic processing would add value to import-substituting raw materials.
• Advances in Biotechnology: Newer technologies, like genetic engineering and precision fermentation, may allow for the production of biochemicals and fatty acids with specifications not available in the market. C16 Biosciences, for example, expects to have a commercial, large-scale fermentation unit in 2025.

Companies that control feedstocks and processing will have a competitive edge. The same will be true for companies that can legally and efficiently produce multiple end-uses. Regulation, supply, and production of carbon will be critical in shaping global competitiveness.

Fat and Oil Market Drivers and Challenges

Changes in technology and the economy can impact the market for fats and oils. So can regulations and consumer preferences. Enhanced refining technologies, the sustainability mandate, the demand for healthier products and the growing biofuel industry create opportunities and change the market. So do risks such as climate change and the introduction of trade restrictions and barriers. The report analyzed the market for fats and oils from 2012 to 2030. During this time, the company expected that that the market would be impacted by the introduction of new technologies, new trade policies, and how the market would respond to raw material diversification.

The factors responsible for driving this market include:

• Demand for Healthier Products: The demand for healthier fats and oils has created a market for healthier and more functional fats and oils. Additionally, many governments have passed legislation to eliminate industrially produced trans fats. Currently, over 3.7 billion people worldwide have access to legislation banning the production of trans fats. As a result, other legislation may be enacted to promote the production of healthier fats and oils. Additionally, the awareness of preventative health care is expected to increase in the next few years, and with it the demand for healthier fats and oils.
• Consumption of Biofuels is Rising: In particular, biodiesel can be produced from edible and non-edible vegetable oils and animal fats, as well as used cooking oils. The U.S. EIA expects that by January 2025, the production capacity of biomass-based diesel in the U.S. will be more than 5 billion gallons. Over the next three to five years, we expect an increase in the use of biofuels due to mandates focusing on the decarbonization of the economy and the development of sustainable aviation fuels. The biofuels industry is expected to face challenges related to food security due to increased competition for edible oils. However, advances in biofuels processing are anticipated to improve food products and create bio-based alternatives to traditional foods.
• Improvements in Food Processing Technologies: For instance, manufacturers of food and beverages can purchase systems that provide real-time quality control, and automate industrial processes. Over the next three to five years, we expect food processors to integrate precision processing to reduce waste, and to develop food and beverage products that meet stringent food safety and quality standards. Processing technologies will also allow producers to create a wider variety of high-quality, low-waste food and beverage products.
• Traceability and Sustainability: Downstream market participants, including retailers and consumers, are focused on traceability and sustainability in the production and supply of different vegetable oils. The EU's deforestation regulation is focused on the supply of soy and palm oil, among others, and has generated a race in the industry to prepare for its provisions. Providers have resorted to certifications, sustainable sourcing, and improved refining processes. In the short to medium term, market players will be rewarded for traceability and sustainability in the supply of vegetable oils. This will create a positive spillover effect on the expansion of agricultural and forest land.
• Food Processing and Infrastructure Development: The growing urban population and middle class, along with the increasing level of trade in processed foods, has generated a higher demand for edible oils and fats. Also, in 2025, the global food processing industry continued investing in plants to process convenience and other food products, creating a higher demand for special edible oils and fats. New investments in oilseed crush facilities and refineries will further reduce the cost of edible oils in a particular region. In the next 3 to 5 years, the positive trend in the food and oil industry in the underdeveloped regions of the world will continue.

The challenges facing this market include:

• Price Volatility of Raw Materials: The price of oilseeds and animal fats are and have been, historically, very volatile. There are many reasons for this, including weather, crop diseases, geopolitical situations, and biofuel demand. In addition, uncertainty in the international palm oil and soybean markets created volatility in the international agricultural markets in February 2025. Price volatility creates difficulties for refiners and processors to decide how much to produce and store, and at what price. Until conditions in the market stabilize, it will be very difficult for processors and refiners to maintain acceptable margins and reliably meet customers' needs.
• Supply Chain and Climatic Risks: Extreme weather conditions, like droughts and floods, can reduce oilseed production and create disruptions in tree crop output. In March 2025, international agencies monitoring climate conditions reported that global average temperatures were above the average for that month. Until supply and demand conditions improve, processing, refining and distribution companies will have to adopt better supply and logistics chain management, and climate change resiliency.
• Increasing Regulatory and Compliance Requirements: There are an increasing number of requirements related to the safety and labelling of food, as well as requirements related to the use of trans fats, deforestation, greenhouse gas emissions, labor, and residues. Starting in 2025, many jurisdictions will implement rules related to the sustainability of supply chains and require greater product-related disclosure. In the interim, laws related to the above requirements will be enacted, which will require smaller processors to invest in new or additional auditing, testing, and documentary systems. Still, smaller processors may remain at a competitive disadvantage to larger processors in the near- to medium-term. Longer-term, greater regulation will Favor processors with the ability to provide certified (and/or other) evidence of the sustainability of their supply chains.

There is also positive long-term potential in the fat and oil processing sector, given the interrelated trends of increasing health-conscious consumption, demand for biofuels, and improvements in food processing and related transport. Continuing and new government regulations to address the above trends, along with climate change and variability, will negatively impact the sector. In order to improve the competitiveness of their operations and maintain positive profit margins, fat and oil processing companies will need to enhance their supply chain and product sustainability, as well as improve the health and safety of their products. Additionally, increased investment in fat and oil processing within a region will improve the security of the supply and enhance the regional economy.

List of Fat and Oil Market Companies

Companies in the market compete on the basis of product quality offered. Major players in this market focus on expanding their manufacturing facilities, R&D investments, infrastructural development, and leverage integration opportunities across the value chain. Through these strategies fat and oil market companies cater increasing demand, ensure competitive effectiveness, develop innovative products & technologies, reduce production costs, and expand their customer base. Some of the fat and oil market companies profiled in this report include-

• Cargill Incorporated
• Bunge Limited
• Archer Daniels Midland Company
• Olam Group
• Fuji Oil Holdings Inc.
• Wilmar International Ltd
• Musim Mas Holdings
• AAK AB
• Louis Dreyfus Company
• IOI Corporation Berhad

Fat and Oil Market by Segment

The study includes a forecast for the global fat and oil market by type, source, application, and region.

Fat and Oil Market by Type [Value ($B) from 2019 to 2035]:

• Fats
• Oils

Fat and Oil Market by Source [Value ($B) from 2019 to 2035]:

• Plant-Based
• Animal-Based

Fat and Oil Market by Application [Value ($B) from 2019 to 2035]:

• Food
• Industrial
• Animal Feed

Fat and Oil Market by Region [Value ($B) from 2019 to 2035]:

• North America
• Europe
• Asia Pacific
• The Rest of the World

Country Wise Outlook for the Fat and Oil Market

Trends in the edible oils and fats industry from 2025-2027 will likely be affected by the increased traceability of biofuels, growing investments in renewable fuels, and further consolidation of edible oils' supply chains. According to Lucintel, in the major importing and processing countries, layout and policy changes will have a greater impact on the edible oils industry than short-term price changes.

• United States: The merger of Bunge and Vinterra was finalized in July 2025, creating a larger oilseed merchandising and processing business. ADM also merged to create the largest soybean crushing facility in the U.S. Construction of this facility is scheduled for completion in 2026. These investments will increase the domestic supply of edible oils and fats to fulfil the needs of food and feed as well as biofuels.
• China: The state-owned grain and oil securities business expanded their oilseed crush facilities in 2025. China COFCO also continued to invest in supplies and logistics to fulfil the country's need for edible oils.
• Germany: Supplier-facing changes to the supply chain. European Union (EU) regulation, set to impact large and medium companies from the end of 2025, will require the operators to ensure their soy and palm oil supply chains are deforestations free. As a result, German processors are improving their systems to collect origin information, and auditing their suppliers. In the absence of adequate supply chain controls, German companies may prefer to import palm oil and soy products from sites where they can trace their supply chains.
• India: Localization of edible oils. The Indian government extended its support to the edible oils and oil palms industry through its recently announced scheme (National Mission on Edible Oils- Oil Palms, 2021). The scheme allocates an outlay of INR 11,040 Crore (≈ USD 1.5 Billion) over a period of five years (2021-26), and outlines a target of producing 2 million tons of crude palm oil by 2026. With the current trends, Indian edible oils industry may achieve self-reliance in the production of edible oils.
• Japan: Product improvement and innovation. J-OIL MILLS improved its product offerings by launching premium cooking oils in 2025. Other Japanese edible oil refiners also invested to improve their refineries to gain competitive edge by offering functional food. Given the current and anticipated demand for edible oils, these efforts are expected to strengthen edible oil refining and cooking oil production in Japan.

Features of the Global Fat and Oil Market

• Market Size Estimates: fat and oil market size estimation in terms of value ($B).
• Trend and Forecast Analysis: Market trends (2019 to 2026) and forecast (2027 to 2035) by various segments and regions.
• Segmentation Analysis: fat and oil market size by type, source, application, and region in terms of value ($B).
• Regional Analysis: fat and oil market breakdown by North America, Europe, Asia Pacific, and Rest of the World.
• Growth Opportunities: Analysis of growth opportunities in different types, sources, applications, and regions for the fat and oil market.
• Strategic Analysis: This includes M&A, new product development, and competitive landscape of the fat and oil market.

Analysis of competitive intensity of the industry based on Porter's Five Forces model.

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This report answers following 11 key questions:

• Q.1. What are some of the most promising, high-growth opportunities for the fat and oil market by type (fats and oils), source (plant-based and animal-based), application (food, industrial, and animal feed), and region (North America, Europe, Asia Pacific, and the Rest of the World)?
• Q.2. Which segments will grow at a faster pace and why?
• Q.3. Which region will grow at a faster pace and why?
• Q.4. What are the key factors affecting market dynamics? What are the key challenges and business risks in this market?
• Q.5. What are the business risks and competitive threats in this market?
• Q.6. What are the emerging trends in this market and the reasons behind them?
• Q.7. What are some of the changing demands of customers in the market?
• Q.8. What are the new developments in the market? Which companies are leading these developments?
• Q.9. Who are the major players in this market? What strategic initiatives are key players pursuing for business growth?
• Q.10. What are some of the competing products in this market and how big of a threat do they pose for loss of market share by material or product substitution?
• Q.11. What M&A activity has occurred in the last 7 years and what has its impact been on the industry?