South America Fats and Oil Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

South America Fats and Oil Market are expected to record a CAGR of 4.59% during the forecast period, 2022-2027.

The COVID-19 outbreak has disrupted food & beverage supply chain all across the Country. Furthermore, the impact of pandemic on society and the economy has been witnessed as a result of lockdowns across the globe. Labor mobility restrictions, travel bans, airline suspensions, and most importantly, a slowdown in the economy has affected the sustainability of supply chains of food & beverage industry all across the globe. Consumers' consumption habits have been changed by their perception of the risk associated with COVID-19. To reduce the risk of infection, consumers used delivery services to buy groceries and food products. Furthermore, fear of potential food ingredient shortages has fueled the hoarding trend in consumers. The unavailability of raw materials has raised new concerns for market players.

The market is primarily being driven by its extensive applications in the food industry for making bakery, confectionery, dairy, and other products, along with its industrial use in the production of biodiesel, fatty acids, animal feeds, paints and coatings, plastics additives, soaps, lubricants and greases, cosmetics, pharmaceuticals, etc.​

Also, the growing demand for plant-based food ingredients has propelled the application of oils in food products. In 2020, according to Good Food Institute (GFI), the plant-based food products market in the Latin American region was worth around USD 800 million.​Owing to several heart risks, associated with partially-hydrogenated vegetable fats and their by-products, governments are repositioning their policies and rolling outlaws to limit the usage of the same. This reflects the hindered growth of the market in the near future.

Key Market Trends

Palm Oil is Likely to Foster the Growth of the Market in the Region

Countries such as Colombia and Ecuador are inclining towards sustainable palm oil production as palm oil tightens its grip on the rest of South America by taking certification from Roundtable on Sustainable Palm Oil. Since palm oil is extensively utilized in the region, more manufacturers are trying to expand their local business and get involved in the overseas trade of palm oil. Palm oil is gaining popularity due to its reduced trans fat content and low pricing. Furthermore, as compared to rapeseed, soybean, and sunflower oils, palm oil is very competitive in terms of pricing. Palm oil and palm kernel oil are also used to swap butterfat from milk replacers for feeding young animals, while refined palm oil provides texture and taste for a variety of products, like margarine, confectionery products, chocolates, and ice cream. ​In most industrialized regions, the demand for biofuel is increasing, which has boosted the demand for palm oil

Brazil Holds the Largest segment

Brazil is the world's leading soybean oilseed producer and exporter. It is the primary soybean supplier to China, the world's largest soy consumer, accounting for 85% of its total soybean purchases. In 2020, the country was the world's second-largest exporter of soybean oil, shipping 1,414.5 thousand ton to India, China, Bangladesh, and other worldwide markets. ​Furthermore, advancements in cosmetics applications paved the way for the country's rising demand for vegetable oils. For instance,In 2020, Cargill introduced the Ultra Oils ingredient category, representing a unique purity level for oils and oil products. This range was curated by combining the natural characteristics of vegetable oils with the company's lipid technology and understanding.​In addition to the overseas market, increased local consumption has aided the expansion of soybean agriculture in Brazil. Soybean oil usage in the industrial sector has risen steadily over the last decade, owing to its use as the primary feedstock for biodiesel synthesis. ​

Competitive Landscape

The manufactures of fats and oils in the region are ultimately striving to prove their superiority in the not-so-consolidated market by offering products that can be made a part of more applications than the conventional ones.Some of the Major Players in the markets areCargill Inc., Bunge Limited,Olam International Limited,Fuji Oil Holding Inc.,Aceitera General Deheza, AAK,Sime Darby Plantation Berhad,Agropalma, Archer Daniels Midland Company,Wilmar International. To achieve this, the main factors to be controlled are the stability of the oils/ fats through the use of antioxidants, reduced odor, and chemical modification. The purity of oils is one of the demanded factors asked for by the industries while procuring the raw ingredients in bulk. Therefore, the concerned manufacturers abide by the requirements to establish a strong consumer base.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

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