global palm oil industry stands at a critical juncture, balancing economic significance with pressing environmental and social concerns. As the most widely consumed vegetable oil, palm oil’s ubiquity in products ranging from food to cosmetics underscores its global demand. However, traditional cultivation practices have been linked to deforestation, habitat loss, and greenhouse gas emissions, prompting a significant shift towards sustainable palm oil production.
Hemp Seed Oil Market Size was valued at USD 0.14 Billion in 2024. The hemp seed oil industry is projected to grow from USD 0.16 Billion in 2025 to USD 0.55 Billion by 2034, exhibiting a compound annual growth rate (CAGR) of 15.0% during the forecast period (2025 – 2034).
Market Dynamics and Regional Insights
Indonesia and Malaysia dominate the palm oil market, collectively accounting for approximately 90% of global production. In 2023-24, Indonesia produced 44 million tonnes, while Malaysia contributed 19.7 million tonnes. Despite their leading roles, both countries face distinct challenges and opportunities in the sustainable palm oil sector.
In Indonesia, recent export restrictions aimed at curbing illicit trade have led to an oversupply of palm oil. This surplus has resulted in price fluctuations, with initial declines followed by rebounds due to anticipated climate impacts on Malaysian production. To manage the excess supply, Indonesia plans to increase its biofuel mandate to incorporate 40% palm oil, a move that could influence both domestic consumption and global market dynamics.
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Conversely, Malaysia has opted not to raise its biodiesel blend to 20% from the current 10%, citing the high costs—estimated at 643 million ringgit ($146.20 million)—required for infrastructure development. This decision reflects a cautious approach, balancing economic considerations with sustainability goals. Additionally, Malaysia anticipates resilience in its palm oil exports to China, despite facing price pressures and evolving consumer habits. In 2024, exports to China decreased due to lower soybean prices and reduced cooking oil consumption. However, demand for palm kernel oil surged by 40%, driven by China’s oleochemical industry, highlighting shifting market demands.
India, another significant player in the palm oil market, is experiencing a notable shift. For the first time, India’s annual palm oil imports are projected to fall behind those of soft oils like soybean and sunflower. This trend is attributed to the rising prices of palm oil compared to its alternatives, prompting refiners to opt for more economical options. This decline in imports could impact benchmark prices of palm oil in Malaysia and support soybean oil futures in the U.S., indicating the interconnected nature of global edible oil markets.
Key companies in the Hemp Seed Oil Market include
- Nutiva Inc.
- Connoills LLC
- Manitoba Harvest
- Sky Organics
- Velon
- NP Nutra
- Z-COMPANY
- Live Verdure Ltd. – 13 Seeds
- Bombay Hemp Company
- Bioriginal Food & Science Corp
Hemp Seed Oil Industry Developments
March 2021: Yooma Wellness Inc., a distributor and marketer of hemp-derived and cannabinoid wellness products, announced its acquisition of Socati Corp. This strategic move aimed to broaden the company’s geographic reach
December 2021: Green Thumb Industries Inc. acquired Leafline Industries, one of only two approved cultivators in the Minnesota medical cannabis sector. Leafline holds licenses for the cultivation, processing, and distribution of cannabis to patients, enabling Green Thumb Industries to extend its market presence into Minnesota.
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Environmental and Social Implications
The environmental footprint of palm oil cultivation has been a focal point of global discourse. Traditional practices have led to significant deforestation, particularly in Indonesia and Malaysia, where vast tracts of tropical rainforests have been cleared for plantations. This deforestation contributes to habitat loss for endangered species, such as the Bornean orangutan, and disrupts biodiversity. Moreover, the drainage of peatlands for palm oil cultivation releases substantial amounts of carbon dioxide, contributing to climate change. Studies indicate that peatland conversion accounts for a significant portion of greenhouse gas emissions from these regions.
In response to these challenges, sustainable palm oil initiatives have gained momentum. The Roundtable on Sustainable Palm Oil (RSPO), established to promote the growth and use of sustainable palm oil products, has seen its membership expand to 5,650 members across 94 countries. In 2016, approximately 51,999,404 metric tonnes of palm oil were RSPO certified, reflecting a growing commitment to sustainability. RSPO certification ensures that palm oil production adheres to stringent environmental and social criteria, aiming to mitigate negative impacts associated with the industry.
Despite these efforts, challenges persist. New European Union regulations require proof that palm oil products are deforestation-free, adding pressure on producers to ensure traceability and compliance. This is particularly challenging for smallholders who may lack the resources to implement comprehensive sustainability practices. Regenerative agriculture emerges as a promising solution, advocating for practices like mixed crop planting and reduced chemical fertilizer use. Pilot projects in regions such as Indonesia’s Aceh Tamiang and Malaysian Borneo demonstrate the potential of these methods to create sustainable models, though widespread adoption requires substantial investment and collaboration among stakeholders.
Consumer Influence and Market Opportunities
Consumer awareness regarding the environmental and social impacts of palm oil production is on the rise. This heightened consciousness drives demand for products containing sustainably sourced palm oil. Companies across sectors—including food, cosmetics, and personal care—are responding by adopting sustainable sourcing policies and obtaining certifications from bodies like the RSPO. This shift not only aligns with ethical considerations but also offers a competitive advantage in markets where consumers prioritize sustainability.
The sustainable palm oil market is segmented based on type, distribution channel, and end-use. Fractional palm oil, known for its affordability and accessibility, dominates the market. Offline distribution channels, such as supermarkets and specialty stores, generate significant revenue, reflecting consumers’ preference for direct engagement and informed purchasing decisions. The food industry remains the largest end-user, driven by the widespread use of palm oil in various products and the increasing demand for sustainably sourced ingredients.
Future Outlook
The trajectory of the sustainable palm oil market is influenced by a confluence of regulatory frameworks, environmental imperatives, and consumer preferences. As global demand for palm oil continues, the emphasis on sustainability is poised to reshape industry practices. Producers are increasingly adopting eco-friendly and socially responsible methods, not only to comply with regulations but also to meet the evolving expectations of consumers and stakeholders.
How much is the Hemp Seed Oil Market? The Hemp Seed Oil Market size was valued at USD 0.12 Billion in 2024.
What is the growth rate of the Hemp Seed Oil Market? The Hemp Seed Oil Market is projected to grow at a CAGR of 15.0% during the forecast period 2025-2034.
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