Palm kernel or babassu oil and fractions market in South America

Earlier Report Observations

The South American market for palm kernel or babassu oil and fractions expanded from 371 тыс. т in 2018 to 442 тыс. т in 2021. This growth was primarily driven by increasing demand for biofuels, supported by regulatory mandates in the region and beyond, alongside the expansion of personal care and processed food sectors. Concurrently, sustainability certification policies like RSPO led to investments in processing infrastructure to meet requirements from key export markets such as Europe and North America.

A sharp reversal occurred in 2022, with market volume falling 22% to 344 тыс. т. This decline was largely due to adverse climate factors and rural labor shortages in major producing countries, which constrained raw material supply. In 2023, the market stabilized at 342 тыс. т but remained under pressure from crop disease outbreaks, particularly bud rot in Colombia, which reduced yields and export availability.

Throughout the period, shifting consumer preferences toward sustainable and organic products, coupled with tightening labeling regulations in importing countries, continued to reshape the market, encouraging a shift toward more processed and certified oil fractions.

Production palm kernel or babassu oil and fractions in South America

In kind, 2017-2020, K t

Top producers of palm kernel or babassu oil and fractions, 2017-2020

World map of production of palm kernel or babassu oil and fractions, 2017-2020

South America's production of palm kernel or babassu oil and fractions has increased following a two-year decline. In 2020, the region produced 252.2 K t, marking a slight 1.1% increase from 2019. Production reached its lowest point in 2019 at 249.5 K t. Over the 2017-2020 period, production fell by 7.2%, averaging an annual decline of 2.4%. The most significant drop occurred in 2018, when production decreased by 4.6%.

Annual dynamics of production in South America in kind, 2017-2020, K t

In value, 2017-2020, M $ US

After two years of decline, South America's production value for palm kernel or babassu oil and fractions has shown an uptick. In 2020, output was valued at 230.0 M $ US, remaining largely unchanged from the previous year. The lowest value was recorded in 2019 at 228.8 M $ US, which also saw the largest decline of 24.1%. From 2017 to 2020, production value decreased by 39.3%, with a compound annual growth rate of -15.3%.

Annual dynamics of production in South America in value, 2017-2020, M $ US

Exports palm kernel or babassu oil and fractions from South America

Exports in kind, K t

Exports of palm kernel or babassu oil and fractions from South America have declined for the second year in a row. In 2020, exports totaled 75.5 K t, representing a moderate 4.1% decrease from the previous year. The peak was reached in 2018 at 101.2 K t, which also saw the largest increase of 10.4%. The most significant decline occurred in 2019, falling by 22.1%. Over the 2017-2020 period, exports decreased by 17.6%, with an average annual decline of 6.3%.

Annual dynamics of product's exports from South America in kind, 2017-2020, K t

Between 2017 and 2020, South America's exports of palm kernel or babassu oil and fractions were distributed across multiple markets without a single dominant destination. The top three markets—the Netherlands (25.0% of exports in kind), Mexico (14.6%), and Italy (7.5%)—collectively accounted for 47.0% of total exports. Numerous smaller partners each held modest individual shares.

Structure of product's exports in kind by countries, 2017-2020

World map of product's exports from South America in kind, 2017-2020

Exports in value, M $ US

Export shipments of palm kernel or babassu oil and fractions from South America have declined for the third consecutive year. In 2020, exports amounted to 68.9 M $ US, showing a modest 4.7% year-over-year drop. From 2017 to 2020, export value decreased by 46.1%, averaging an annual decline of 18.6%.

Annual dynamics of product's exports from South America in value, 2017-2020, M $ US

From 2017 to 2020, South America's exports of palm kernel or babassu oil and fractions in value terms were spread across many different markets. Even the largest destinations—the Netherlands, Mexico, and Italy—together represented only 46.2% of total export value.

Structure of product's exports in value by countries, 2017-2020

World map of product's exports from South America in value, 2017-2020

Imports palm kernel or babassu oil and fractions to South America

Imports in kind, K t

Following a two-year drop, South America's imports of palm kernel or babassu oil and fractions have increased. In 2020, imports reached 238.2 K t, reflecting a solid 14.2% gain compared to 2019. The lowest import volume was recorded in 2019 at 208.6 K t. The largest decline occurred in 2018, with a 7.9% decrease. Over the 2017-2020 period, imports grew by 3%, averaging an annual increase of 1.0%.

Annual dynamics of product's imports to South America in kind, 2017-2020, K t

Between 2017 and 2020, Indonesia dominated South America's imports of palm kernel or babassu oil and fractions in kind, accounting for 74.6% of total flows. Other countries together made up the remaining share.

Structure of product's imports in kind by countries, 2017-2020

World map of product's imports to South America in kind, 2017-2020

Imports in value, M $ US

After two years of decline, South America's imports of palm kernel or babassu oil and fractions in value terms have increased. In 2020, imports totaled 207.7 M $ US, corresponding to a 12.8% rise from 2019. The lowest value was recorded in 2019 at 184.2 M $ US, which also saw the largest decline of 30.2%. From 2017 to 2020, import value decreased by 36.3%, with an average annual decline of 14.0%.

Annual dynamics of product's imports to South America in value, 2017-2020, M $ US

Throughout 2017-2020, the country structure of South America's imports in value terms was primarily shaped by Indonesia and Malaysia, which together held a joint share of 82.3% of total flows.

Structure of product's imports in value by countries, 2017-2020

World map of product's imports to South America in value, 2017-2020