Summary

In South America, the population is still expanding, and with it is the demand for edible oils. Vegetable oils are a significant source of calories and fat in the diet of South America because they are used for frying and cooking as well as being an ingredient in many processed goods. Because they contain more unsaturated fat and less saturated fat than animal fats, vegetable oils are typically seen as being healthier. As a result, people are becoming more aware of the health advantages of vegetable oils, which have increased demand. Vegetable oils are also used to make biofuels, which are gaining popularity as an alternative to fossil fuels that are more environmentally friendly. Due to the expansion of the market for vegetable oils, the sector has continued to rise. Furthermore, the use of virgin vegetable oils, which are high in antioxidants and preserve minerals and vitamins, is growing as a result of the rising health consciousness brought on by the increasing prevalence of health-related conditions including obesity, hypertension, and diabetes. They can also lower cholesterol to lower the chance of heart issues and enhance brain health. The demand for the oils, which are extensively produced in Argentina and Brazil, is rising due to the expanding use of vegetable oils, such as sunflower oil and palm oil, in a variety of skincare and cosmetic products to provide antioxidants, vitamin A, and vitamin E to the skin. This is driving the market's expansion. The cooking style prevalent on the continent is largely dependent on frying. The main element boosting demand for the market is the rising demand for cooking fats and oils. The second factor fueling the demand for processed food globally is the rise in disposable income and the increasingly busy lifestyles of consumers. Another important aspect fueling market demand is the growing use of premium edible oils in conjunction with the use of fats and oils in moderation.

According to the research report, “South America Edible Oil Market Outlook, 2028” published by Bonafide Research, the market is anticipated to add more than USD 4.25 Billion market size from 2023 to 2028. Another important element influencing market demand is the growing usage of premium edible oils in connection with the intake of oils and fats in moderation. Unhealthy fat and oil intake is a serious threat to the market. Trans-fats are unhealthy and are found in huge quantities in processed meals like French fries, pizza, and doughnuts. Trans-fat consumption raises LDL levels in the body. Trans-fat consumption also increases the risk of several cardiac illnesses, type 2 diabetes, and cancer. Additionally, the high cost of raw materials makes it extremely challenging for new players to enter the market. In urban areas, South American consumers often have access to imported oils, including sunflower oil, canola oil, and olive oil. These oils have gained popularity for their perceived health benefits and versatility in cooking. South American countries have invested in biotechnology to develop genetically modified (GM) oilseed crops like GM soybeans, which have higher yields and resistance to pests and diseases. Indigenous communities in the Amazon rainforest continue to use traditional oils like babassu oil, which is derived from babassu palm nuts. These oils have cultural significance and are used in cooking, cosmetics, and medicinal preparations. South American countries often host cooking workshops and food festivals where traditional and innovative uses of edible oils are showcased, promoting culinary tourism. Street food vendors across South America often use edible oils for frying and grilling. The choice of oil can significantly impact the flavor and texture of popular street foods. Beyond culinary use, many South American oils, such as jojoba oil and rosehip oil from Chile, are prized for their cosmetic and skincare benefits. South America is home to numerous cooking schools and culinary institutes where aspiring chefs and food enthusiasts learn the art of using edible oils in traditional and modern cooking.

Based on the countries, the Colombia Edible Oils market was valued at USD 1.92 Billion in 2022.

Colombia is expected to grow with prominent CAGR during the forecast period. Colombia's diverse ecosystems, including rainforests and mountains, provide a unique environment for growing a wide range of oilseeds and fruits. This biodiversity contributes to the variety of edible oils produced in the country. Colombia is known for its traditional dishes like arepas (corn cakes), empanadas (stuffed pastries), and sancocho (a hearty soup). These dishes often use edible oils like corn oil or palm oil for frying and cooking. Colombia produces a variety of tropical fruits, some of which are used to extract oils. Examples include guava seed oil, passion fruit oil, and papaya seed oil, which have unique flavors and potential health benefits. Colombia's street food culture often involves frying various foods in edible oils, resulting in a wide array of crispy and flavorful snacks. The rise of vegan and vegetarian diets in Colombia has led to increased interest in plant-based cooking oils, such as avocado oil, as alternatives to animal-based fats. Colombia has made significant strides in using edible oil as a feedstock for biodiesel production. This not only supports the renewable energy sector but also utilizes surplus oil production. Colombia is one of the major palm oil producers in the Americas and is the world’s fourth-largest palm oil producer, with an average production of 1.6 million metric tonnes (MT) annually. In Guatemala City, a small pilot project to produce biodiesel from recycled cooking oil has shown so much potential that its organisers are hoping to scale it up to help power a whole fleet of city vehicles. Ecuador is the largest palm oil exporter in Latin America, with 60% of its CPO going to export.

Brazil is also a significant producer of palm oil, which is used in cooking and various food products. During Brazil's famous Carnival celebrations, many traditional sweets and pastries are fried in edible oils like palm oil or soybean oil, creating delicious and indulgent treats. The country has made efforts to promote sustainable palm oil production. Tucupi is a traditional Brazilian sauce made from fermented manioc (cassava) juice. It is often prepared with the addition of edible oils and spices and is a key ingredient in Amazonian cuisine. Brazilian street food vendors often use edible oils for frying popular snacks like coxinhas (fried dumplings) and acarajé (deep-fried bean cakes). Furthermore, Argentina is famous for its consumption of mate, a traditional herbal tea. Yerba mate oil is also extracted and used for various purposes, including in cosmetics. Argentina is renowned for its asado, a style of barbecue. Grilling meats over an open flame is a beloved culinary tradition, often using edible oils for basting and flavor. Vegetable oils like sunflower oil and corn oil are commonly used in Argentine cooking, especially for frying and sautéing. Argentine pastries and empanadas are often filled with a mixture of meats, vegetables, and spices, with the pastry dough typically fried in oil until golden brown. Alfajores, a popular
Argentine sweet treat, often consist of two cookies filled with dulce de leche and covered in chocolate or powdered sugar. These cookies may use edible oils in their preparation.

The Rest of South America (RoSA) edible oil market includes Bolivia, Chile, Peru, Suriname, Uruguay, Venezuela and many more. These countries are grouped together because they share similar economic, social, and cultural characteristics. They also have a relatively high demand for edible oils, due to the increasing population and the growing consumption of processed foods. Consumers in the RoSA region are becoming more health conscious and are demanding healthier alternatives to traditional oils. This is driving the demand for healthy oils such as olive oil, avocado oil, and coconut oil. Some governments in the RoSA region are implementing policies to support the development of the edible oil industry. This includes providing subsidies to farmers, investing in research and development, and creating a favorable regulatory environment.

Based on the product type, Palm Oil is projected to grow with more than 5.20% CAGR by 2023-28.

The palm oil industry makes substantial contributions to the economies of countries in South America. It generates income and employment opportunities, especially in rural areas where palm oil plantations are often located. South America, particularly Colombia and Ecuador, has emerged as a significant hub for palm oil production. Colombia, in particular, has experienced substantial growth in palm oil cultivation and processing. Palm oil is versatile cooking oil used extensively in the South American food industry. It is a popular choice for frying due to its high smoke point and stability at high temperatures. Additionally, it is used in a wide range of food products, including processed foods, baked goods, and snacks. Oil palm trees are known for their high oil yield per hectare of land. This efficiency in oil production makes them an attractive crop for South American farmers. To address these environmental concerns, many palm oil producers in South America have adopted sustainable practices. They often seek certification from organizations like the Roundtable on Sustainable Palm Oil (RSPO). Sustainable practices aim to minimize deforestation, protect biodiversity, and promote responsible land use. South America has its own varieties of palm oil, often referred to as "red palm oil." This type of palm oil has a reddish hue and a distinct flavor. It is used in traditional dishes and cuisine across the region, adding a rich and earthy taste. In addition, Rapeseed is known for its high oil content, with the seeds containing approximately 40% oil. This high oil yield makes it an attractive choice for edible oil production. Rapeseed oil is renowned for its health benefits. It is low in saturated fat and contains a high proportion of monounsaturated and polyunsaturated fats, including omega-3 fatty acids. This composition is considered heart-healthy and makes rapeseed oil sought-after cooking oil in South America. Canola, a specific type of rapeseed bred to have low erucic acid levels and glucosinolates, is widely grown in South America. Canola oil is highly regarded for its nutritional value and mild flavor.

By nature, the organic segment held the highest market share in 2022 in the South American edible oil market.

South American consumers are becoming increasingly health-conscious and are seeking foods and ingredients that are perceived as healthier and more natural. Organic edible oils are seen as a healthier option due to the absence of synthetic pesticides and chemicals in their production. Many South American governments have introduced regulations and certifications to promote organic farming and ensure the integrity of organic products. These certifications provide consumers with confidence in the authenticity of organic claims. Organic edible oils are often associated with premium quality. Consumers are willing to pay a premium for organic products, believing that they are getting higher quality, better-tasting, and more nutritious oils. Organic edible oils, such as organic olive oil, organic sunflower oil, and organic soybean oil, are perceived as having superior nutritional value. They are often minimally processed, preserving more of the oil's natural nutrients and flavors. Restaurants, hotels, and foodservice providers in South America are increasingly using organic edible oils in their culinary preparations, responding to the demand for healthier and premium-quality dishes. Furthermore, the average price of organic edible oil in South America varies depending on the type of oil, the brand. However, as a general rule of thumb, organic edible oil is typically more expensive than conventional edible oil.

The average price of organic soybean oil in South America is around $10 per liter, while the average price of conventional soybean oil is around $6 per liter. The price of organic olive oil is even higher, with an average price of around $20 per liter. The higher price of organic edible oil is due to the fact that it is produced using more sustainable methods. Organic oils are produced without the use of synthetic pesticides or fertilizers, which can be harmful to the environment. They are also produced without the use of genetically modified organisms (GMOs), which some consumers prefer to avoid.

In terms of end users, the market is segmented into domestic, industrial, and food service.

Edible oils, such as soybean oil, sunflower oil, and palm oil, are extensively used for frying and cooking in the food processing industry. This includes the production of snacks, fried foods, and prepared meals, which are popular throughout South America. Edible oils serve as essential ingredients in baking processes, contributing to the texture and taste of products like bread, cakes, pastries, and cookies. Edible oils are vital components in the production of salad dressings, sauces, and condiments, which are widely consumed in the region. South America has a thriving snack food industry, with products like potato chips, corn chips, and fried snacks being manufactured in large quantities. These snacks are typically fried in edible oils. The restaurant and food service sector in South America relies heavily on edible oils for cooking and frying due to the high demand for fried dishes and various culinary preparations. The demand for convenience foods, such as frozen and pre-packaged meals, has been on the rise in South America. Edible oils are used in the preparation and preservation of these products. Edible oils can have non-food industrial applications as well. For example, they are used in the production of soaps, cosmetics, and pharmaceuticals.
The online segment is expected to the highest CAGR during the forecast period. The North America edible oil market is segmented into offline and online distribution channels. Among the offline categories, convenience stores, hypermarkets, supermarkets, direct sales, and others are sub-segments that are considered in the report.

South America has been experiencing urbanization and increased internet penetration. As more people move to cities and gain access to the internet, online shopping becomes a more accessible and attractive option. Shift in consumer habits towards online shopping has been occurring globally, including in South America. Consumers are becoming more comfortable with the idea of purchasing groceries, including edible oil, online. South American consumers, like those in many other regions, have increasingly busy and hectic lifestyles. Online shopping offers a time-saving solution, allowing them to quickly purchase essential items like edible oil without the need for a trip to the store. The presence of established e-commerce platforms and marketplaces in South America has played a crucial role. These platforms provide a one-stop-shop for various products, including edible oils, making it convenient for consumers. Online retailers often provide flexible delivery options, including same-day or next-day delivery, giving consumers control over when they receive their purchases. The prevalence of smartphones in South America has made mobile shopping apps popular. Consumers can easily shop for edible oils and other groceries on their mobile devices. For instance, there are many popular online channels for edible oil in South America. Here are a few of the most popular include Amazon, Mercado Libre, AliExpress, Linio, Walmart and many more.

Based on packaging type, the market is divided into HDPE (plastic), Pet (bottles), Pouch, Tin, and Tetra pack.

PET bottles are lightweight and shatterproof, making them an excellent choice for packaging edible oils. Unlike glass bottles, PET bottles are less likely to break during transportation and handling, reducing the risk of product loss and potential safety hazards. PET bottles are generally more cost-efficient to produce and transport than glass containers. Their lightweight nature reduces shipping costs and minimizes the environmental impact associated with transportation. PET bottles often feature user-friendly designs, such as easy-to-grip handles and pour spouts, enhancing consumer convenience when dispensing and using edible oil. PET bottles are recyclable, aligning with growing environmental consciousness in South America. Many consumers prefer products with packaging that can be recycled, contributing to sustainability efforts. PET bottles can be designed to provide protection from light exposure, which can be important for preserving the quality and shelf life of edible oils. Light can cause oil to deteriorate and become rancid. PET bottles come in various sizes, catering to different consumer needs. From small single-serving bottles to large family-sized containers, PET offers versatility in packaging options.

Market Dynamics:

Growth and expansion of fast food, increasing the demand for edible oils

South America has seen a rapid expansion of global fast food chains such as McDonald's, Burger King, KFC, and Subway. These chains require substantial quantities of cooking oils for various purposes, including frying French fries, chicken and other menu items. The convenience and affordability of fast food have led to changing consumer preferences. Busy urban lifestyles and a desire for quick meals have fueled the demand for fast food, where deep frying is a common cooking method. Fast food menus often feature fried foods like French fries, chicken nuggets, onion rings, and fried fish. These items rely heavily on edible oils for their preparation. Fast food chains typically use different types of edible oils depending on the specific cooking requirements and flavor profiles. Common oils include vegetable oil, canola oil, and palm oil for frying. The snack food industry, including the production of potato chips and other fried snacks, has also experienced growth in South America. These snacks are cooked in large quantities of edible oils. While fried fast food is popular, there is also a growing awareness of health concerns associated with excessive consumption of fried and fast food. This has led to a trend where consumers are looking for healthier cooking oils or alternatives when cooking at home.

Adverse health effects associated with oil rancidity restrain the market growth.

When oils come into contact with oxygen and moisture, they undergo a process called autooxidation/ rancidity, which results in the production of bad smells, changes in tastes, and strange hues, the creation of potentially dangerous chemicals, and a decline in the product's effectiveness. Edible vegetable oils are subject to quality decline due to oxidation and microbial degradation, which results in nutritional loss and off-flavors. Quality degradation may contribute to the creation of reactive and hazardous oxidation products, which offer health risks such as cancer and inflammation. In the body, rancid oil produces toxic free radicals, which are known to cause cellular damage and have been linked to diabetes, Alzheimer's disease, and other disorders. Rancid oils can also upset the stomach and deplete the body of vitamins B and E. Saturated and unsaturated fatty acids and glycerides make up their chemical edible.

Process of Producing Cooking Oil that is Technologically Advanced to Promote Growth

Advanced manufacturing processes often involve automation, which can significantly enhance efficiency. Automated systems can handle various tasks such as seed or nut cleaning, oil extraction, and packaging with precision and speed. Some advanced processes include cold pressing, which is a method that extracts oil from seeds and nuts at lower temperatures. This helps retain the oil's natural flavor and nutritional properties. While not suitable for all types of edible oils, solvent extraction is a highly efficient method that can extract a higher yield of oil from certain seeds and nuts. Advanced techniques in solvent extraction have improved safety and reduced environmental impact. Advanced manufacturing processes often incorporate real-time monitoring and quality control systems. These systems continuously check various parameters such as temperature, pressure, and moisture content to ensure the oil's quality meets the desired standards. Many modern edible oil production facilities have implemented traceability systems. This allows for the tracking of raw materials from their source to the final product, ensuring quality and safety. Advanced facilities often seek certifications such as RSPO (Roundtable on Sustainable Palm Oil) for palm oil production, demonstrating their commitment to sustainability.

Recent Developments:

• In 2022, Bunge announced that it would be investing $100 million in a new soybean oil processing plant in Brazil. The plant is expected to be operational by 2024 and will have a capacity of 1.5 million tons per year.

• In 2022, Cargill announced that it would be expanding its soybean oil processing capacity in Argentina. The expansion is expected to be completed by 2023 and will increase Cargill's soybean oil processing capacity in Argentina by 50%.

• Wilmar has a significant presence in South America, and in 2022, it announced that it would be investing $500 million in a new palm oil mill in Brazil. The mill is expected to be operational by 2024 and will have a capacity of 600,000 tons per year.

• In 2022, ADM announced that it would be expanding its soybean oil processing capacity in Brazil. The expansion is expected to be completed by 2023 and will increase ADM's soybean oil processing capacity in Brazil by 30%.

Key Players Insights:

Considered in this report

• Geography: South America
• Historic year: 2017
• Base year: 2022
• Estimated year: 2023
• Forecast year: 2028

Aspects covered in this report

• South America Edible Oil with its value and forecast along with its segments
• Country-wise Edible Oil market analysis
• Various drivers and challenges
• On-going trends and developments
• Top profiled companies
• Strategic recommendation

Countries covered in the report:

• Brazil
• Argentina
• Colombia

By Product Type

• Soybean oil
• Palm Oil
• Rapeseed Oil
• Mustard oil
• Sunflower Oil
• Olive Oil
• Ground nut Oil
• Coconut Oil
• Corn Oil
• Rice bran oil
• Sesame Oil
• Cottonseed oil
• Others (Apricot, Hazelnut, Almond, Macadamia, Walnut, Avocado, grape seed, Cashew, Brazil nuts, canola etc.)

By Nature

• Conventional
• Organic

By End User

• Domestic
• Industrial
• Food Service

By Distribution channel

• Offline
• Convenience Store
• Hypermarket/Supermarket
• Direct Sales
• Others
• Online

The approach of the report:

This report consists of a combined approach of primary and secondary research. Initially, secondary research was used to get an understanding of the market and list the companies that are present in it. The secondary research consists of third-party sources such as press releases, annual reports of companies, and government-generated reports and databases. After gathering the data from secondary sources, primary research was conducted by conducting telephone interviews with the leading players about how the market is functioning and then conducting trade calls with dealers and distributors of the market. Post this; we have started making primary calls to consumers by equally segmenting them in regional aspects, tier aspects, age group, and gender. Once we have primary data with us, we can start verifying the details obtained from secondary sources.

Intended audience

This report can be useful to industry consultants, manufacturers, suppliers, associations and organizations related to the Edible Oil industry, government bodies, and other stakeholders to align their market-centric strategies. In addition to marketing and presentations, it will also increase competitive knowledge about the industry.







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