Edible Oils Market 2025: A Deep Dive into Growth Drivers, Key Segments, and Emerging Opportunities

Introduction and Growth Drivers

Edible oils are a basic part of global diets as they contribute more than 20 percent of the world’s daily calories. In 2025 the global market is valued at around USD 244.49 billion and by 2032 it is expected to reach USD 341.97 billion which represents a steady CAGR of 4.9%. This makes edible oils one of the largest and most dynamic segments of the global food industry.

Source: The India Watch Analysis, Statista

 A major driver of this growth is the rising global population and urbanisation. The United Nations projects that the world population will reach 9.7 billion by 2050 and this will naturally raise demand for packaged and processed foods that rely heavily on oils. Much of this expansion is centred in Asia and Africa where rapid urbanisation and higher incomes are changing food habits.

At the same time consumer behaviour in developed economies is shifting in a different direction. Instead of low-cost oils such as palm and soybean, buyers are increasingly choosing olive, avocado and rice bran oils and this reflects a strong preference for premium and healthier options. This is closely linked to rising health awareness worldwide. With 39 percent of adults overweight (WHO, 2024) demand is rising for heart-friendly oils such as canola, sunflower and olive and this shows a global movement from affordability toward quality and wellness.

However, this growth story is not without challenges. Price volatility remains a constant concern, and this was highlighted when the FAO Vegetable Oil Price Index reached a three-year high in mid-2025. This mix of opportunity and risk shows why it is important to examine the edible oils market more closely by looking at the key oil types, their uses and the regions shaping demand.

 Segments, Uses, and Regional Patterns

The edible oils market is concentrated in a few key categories. Soybean oil is the largest with about 35 percent share (USDA, 2024) because it is affordable and provides balanced nutrition. Palm oil continues to dominate processed foods and packaged snacks and sunflower and olive oils are gaining traction in premium and health-focused markets (Euromonitor, 2025). Yet product categories tell only part of the story because the true scale of the sector also comes from the many ways these oils are used.

Source: The India Watch Analysis, Statista

Edible oils are consumed mainly for food and cooking across households, restaurants and food companies but their role extends far beyond the kitchen. They are also important ingredients in cosmetics, pharmaceuticals and biofuels. This combination of food and industrial demand makes the sector both large and resilient and these wide applications are closely linked to how consumption patterns unfold across regions.

Geography further shapes global demand. The Asia-Pacific region leads consumption because of its demographics and urban diets. North America accounts for about 33 percent and this is largely driven by soybean and canola oils. Europe, Latin America and Africa also show steady growth because of local cuisines and industries. Together these categories, applications and regional needs explain why competition in this market is so intense. 

Source: The India Watch Analysis, Statista

Competitive and Policy Landscape

Competition in the edible oils market is shaped by both global majors and strong local champions. Companies such as Cargill, ADM and Bunge dominate refining and global trade flows, while regional players build advantage through local focus. For example, Adani Wilmar’s Fortune in India achieved 24 percent revenue growth in FY25 because it targeted affordability and regional preferences. Yet competitive advantage is no longer only about scale or price, because the next battleground is sustainability.

                                                                   Source: The India Watch Analysis, Statista

Sustainability and innovation are now central to competition. A PwC survey (2025) showed that 62 percent of consumers care more about sourcing and safety than price, and this has boosted demand for certified products such as RSPO palm oil. Companies that act early with sustainable supply chains are more likely to secure long-term trust and market leadership. These consumer-driven changes are being reinforced by government action, which is increasingly shaping the way companies compete.

Government policy adds another layer of influence. In India, palm oil duties were cut in May 2025 to control rising prices, and the National Mission on Edible Oils (NMEO) was launched to boost domestic oilseed farming. At the global level, Indonesia and Malaysia are raising biodiesel mandates which absorb more palm oil at home, while Brazil’s program diverts soybean oil into fuel. Importing regions such as the EU and US are also tightening trade and sustainability rules. Therefore, policy and competition are deeply connected, and companies must adapt to both to remain competitive.

The impact of these global dynamics is most visible in India, which has emerged as not only one of the largest consumers but also one of the most vulnerable markets.

 India’s Market Outlook

India is one of the largest consumers of edible oils and one of the most import dependent. Per capita consumption is about 24 kg per year, which is nearly double the ICMR’s recommended level of 12 kg. With a population of 1.4 billion, this translates into total demand of 32–33 million tonnes annually, valuing the market at around USD 32–36 billion. 

This large market creates opportunities, but it also leaves the country heavily exposed to external risks. Since more than 60 percent of demand depends on imports, domestic prices are highly sensitive to global movements. For example, when the FAO index spiked in mid-2025, Indian prices rose sharply. Regulation is also tightening, as seen in the VOPPA Order (Aug 2025) which introduced stricter labelling and quality standards and increased compliance costs for smaller players. Palm oil still accounts for about 30 percent of the market, yet environmental concerns and consumer awareness are encouraging a gradual shift towards rice bran and sunflower oils.

As a result, India’s central task is to balance affordability with nutrition and sustainability while reducing import dependence. The future of the Indian edible oils market will depend on how quickly government policies and private companies move together to achieve this balance.

Technology and Consumer’s behavior

Policy alone cannot shape the edible oils industry and technology is becoming central at every stage of the value chain. Farmers are now using AI-driven tools for soil and weather analysis, refiners are adopting enzymatic and physical refining methods that reduce chemicals and improve purity, and processors are turning waste into biofuels and animal feed which both create new revenue and promote sustainability. Just as supply chains are being reshaped by technology, demand patterns are being are getting recalibrated by consumers who are increasingly informed and value-driven.

These supply-side advances are closely linked with changes on the demand side. Consumers are seeking oils that reflect their lifestyle and values, and a growing clean-label movement is driving interest in products with minimal additives and transparent sourcing. Packaging is also evolving since refill pouches remain dominant in rural areas while eco-friendly and premium packs are expanding in urban markets. At the same time, brands are relying on digital platforms and subscription models while telling stories around purity and traceability that resonate strongly with Millennials and Gen Z. Beyond this, fortified oils with added omega-3s or vitamins are attracting fitness-focused buyers.

Together, these supply and demand shifts show that technology and consumer behaviour are reinforcing one another in shaping the future of the market.

 
Challenges and Outlook

Despite the positive growth story, the sector faces significant hurdles. Price volatility remains the biggest risk, especially for import-dependent countries like India. The environmental footprint of palm oil continues to attract criticism, pushing companies to adopt more sustainable practices. Compliance costs are also rising because of tighter labelling and quality rules, which burden smaller and unorganised players.

Even so, the overall outlook remains strong. Globally, the market is expected to reach USD 345 billion by 2032, growing faster than population expansion. India will remain the most dynamic growth story because of its demographics, urbanisation, and rising health awareness. With supportive government policies and new technologies, the country is also beginning to emerge as more than just a consumer, but a potential producer shaping the global landscape.

Conclusion

The edible oils market in 2025 is at a turning point. Demand is rising steadily, but it is also being reshaped by health trends, sustainability pressures, and global trade shifts. Consumers are moving from basic oils to healthier, fortified, and responsibly sourced choices that fit modern lifestyles.

India will stay at the centre of this transformation. Its growing consumption, evolving policies, and shifting consumer habits will keep it both a driver of demand and a test case for sustainable solutions. Those who invest in sustainability, technology, and consumer trust will define the future of edible oils.

How Can The India Watch Help?

At The India Watch, we work closely with businesses, investors, and entrepreneurs who want to tap into the opportunities within India’s fast-evolving edible oil industry. As one of the most critical segments of the food economy, edible oils are deeply linked to agriculture, trade, processing, retail, and consumer preferences. Our role is to equip stakeholders with data-backed insights and actionable strategies that make navigating this competitive sector easier and more profitable. Whether you are planning to set up a new refinery, diversify into premium oils, expand distribution, or explore partnerships, we help you understand the entire value chain.

We support our clients in identifying new revenue streams. Our expertise lies in providing comprehensive feasibility studies, financial modeling, sectoral research, and market entry strategies. This ensures every decision is backed by clarity and precision. Additionally, we benchmark competitors, assess distribution channels, and highlight critical regulatory factors. 

If you are an investor, brand, or entrepreneur looking to establish/expand your presence in India’s growing edible oil market, The India Watch can be your trusted partner for market intelligence and strategic advisory. For further enquiries, reach out to us at info@theindiawatch.com