Palm oil is one of the most versatile commodities on the planet, showing up in everything from cookies and shampoo to diesel fuel and livestock feed. Indonesia and Malaysia produce about 83% of the global supply, and the oil’s unique physical properties make it difficult to replace in most of its applications. Here’s where it actually ends up.
Processed Food and Cooking
Palm oil’s biggest market is food. When researchers examined products across three major Western supermarkets in 2024, palm oil or its derivatives appeared in up to 40% of products once oils of uncertain origin and chemical derivatives were counted. Only about 8% of products explicitly listed palm or palm kernel oil on the label, which gives a sense of how often it hides behind generic terms like “vegetable oil” or shows up as a processed ingredient rather than the oil itself.
The reason food manufacturers rely on it comes down to chemistry. Palm oil is roughly 44% palmitic acid (a saturated fat) and 39% oleic acid (a monounsaturated fat), which gives it a semi-solid texture at room temperature without needing hydrogenation. That matters because hydrogenation creates trans fats, and palm oil lets companies avoid them while still getting the firm, spreadable consistency needed for margarine, chocolate, ice cream, and baked goods. Its liquid fraction stays stable below 25°C, making it one of the preferred oils for commercial deep frying. It also resists going rancid thanks to naturally occurring antioxidants, which extends shelf life in packaged snacks, instant noodles, and ready meals.
Personal Care and Cleaning Products
Palm kernel oil, extracted from the seed rather than the fruit, is the starting material for a wide range of chemicals used in soaps, shampoos, detergents, and cosmetics. These derivatives act as foaming agents, emulsifiers, and moisturizers. If you’ve seen ingredients like sodium lauryl sulfate or cetyl alcohol on a label, those are often derived from palm kernel oil. The same chemistry makes palm oil derivatives useful in toothpaste, lipstick, and skin creams, where they help blend water and oil-based ingredients into a smooth, stable product.
Biofuel
A growing share of palm oil never reaches a grocery store or a cosmetics factory. Instead, it’s converted into biodiesel. Indonesia alone produced an estimated 13 billion liters of palm oil-based biodiesel in 2024, using nearly 12 million metric tons of crude palm oil as feedstock. The country mandates blending 35% biodiesel into its diesel supply (known as B35) to reduce fuel imports and create domestic demand for palm oil. Malaysia and several European countries also use palm-based biodiesel, though the EU has been scaling back its use over deforestation concerns.
This fuel application is significant because it competes directly with food and industrial uses for the same supply of crude palm oil, which influences global prices and drives further expansion of plantations.
Animal Feed
After oil is extracted from palm kernels, the leftover material, called palm kernel cake, becomes livestock feed. It contains 14% to 20% crude protein and a similar range of crude fiber, making it a practical energy source for cattle, sheep, and goats. In Malaysia, some beef cattle rations include palm kernel cake at concentrations as high as 70% to 80%. Its fiber content is too high for poultry and pigs to digest efficiently, so it’s used mainly for ruminants or as a filler in non-ruminant feeds to add bulk along with modest protein, minerals, and vitamins.
Nutritional Properties of Red Palm Oil
Not all palm oil is the same. Crude “red” palm oil, which gets its color from high concentrations of carotenoids, is nutritionally distinct from the refined, bleached version used in most processed foods. Every 100 grams of red palm oil contains up to 700 ppm of tocotrienols (a potent form of vitamin E), 500 ppm of carotenoids, and smaller amounts of coenzyme Q10. Refining strips most of these compounds out.
Research on tocotrienol-rich extracts from palm oil has shown some notable effects. In one double-blind trial, people with mildly elevated cholesterol saw a 15% reduction in total cholesterol and an 11% drop in LDL cholesterol after eight weeks of supplementation. A Japanese trial with 128 older adults found that taking 200 mg of tocotrienols daily for 24 weeks improved working memory scores by 23% and even increased the volume of the brain’s memory center on MRI scans. These are supplement studies, though, not results you’d expect from cooking with palm oil in normal quantities.
The fat profile itself is a mixed bag. At 44% saturated fat, palm oil sits between olive oil (about 14% saturated) and butter (about 63% saturated). It’s not the worst cooking fat for heart health, but it’s far from the best. The monounsaturated fat content of around 39% is a plus, and 10% to 11% is polyunsaturated linoleic acid. For everyday cooking, oils higher in unsaturated fats like olive or canola are generally better choices.
Industrial and Chemical Applications
Beyond food and fuel, palm oil and its derivatives are raw materials for an array of industrial products. The harder fraction of palm oil, called stearin, stays solid below 40 to 45°C and melts between 65 and 70°C, which makes it useful in candle manufacturing, where consistent melting behavior matters. Palm-based chemicals also appear in lubricants, printing inks, plastics, and rubber processing. The oleochemical industry essentially breaks palm oil down into fatty acids and glycerin, which then become building blocks for hundreds of downstream products.
The Sustainability Question
Palm oil’s dominance raises environmental concerns, particularly around tropical deforestation in Southeast Asia. The Roundtable on Sustainable Palm Oil (RSPO) certifies production that meets certain environmental and social standards, but certified sustainable palm oil still represents only about 20% of global production, or 16.2 million metric tons as of 2024. RSPO members account for 39% of all palm oil produced worldwide, meaning a significant portion of even member-produced oil hasn’t achieved certification.
Replacing palm oil entirely would likely make things worse. Oil palms produce four to ten times more oil per hectare than alternatives like soybean, sunflower, or rapeseed. Switching to those crops would require far more land to produce the same volume, potentially accelerating deforestation rather than slowing it. The more realistic path is expanding certified production and enforcing deforestation-free supply chains, which is what regulations like the EU’s deforestation law are attempting to do.