Palm Oil Market Shifts Towards Less Sustainable Practices
The global palm oil market is shifting towards less sustainable practices, according to a new report from NewForesight. The Global Palm Oil Outlook 2026 found that demand for palm oil is increasing in markets with lax sustainability standards, while certification and traceability requirements are declining in traditional buyer countries like the European Union and China.
The report noted that Indonesian palm oil consumption grew by 39% between 2019 and 2020, driven largely by biodiesel and industrial use. In contrast, consumption fell by 44% in the EU and by 31% in China over the same period.
The result is a two-tier market, with certified supply concentrating among a shrinking pool of sustainability-sensitive buyers, while a larger share of volume flows to less demanding markets. The report cited an example where 5.2 million tonnes of certified palm oil were sold in 2024 without any sustainability claim attached.
The study also found that smallholder farmers are being left behind due to their inability to meet certification requirements, despite accounting for an estimated 35-40% of global palm oil production. Only 8% of palm oil certified by the Roundtable on Sustainable Palm Oil comes from smallholders.