Report

Specialty Fats And Oils Market Analysis

The specialty fats and oils market size reached USD 14.04 billion in 2025 and is projected to grow to USD 19.50 billion by 2030, at a CAGR of 6.8%. The market expansion is driven by increased demand for functional lipids as trans-fat alternatives, stricter regulations, and growing interest in plant-based food options. The consumption growth of processed foods, rising cocoa prices necessitating cocoa butter alternatives, and the FDA's revised "healthy" definition with stricter saturated fat requirements have led to increased product reformulations . Asia-Pacific dominates consumption due to biodiesel mandates and palm oil trade agreements, while the Middle East & Africa shows the highest CAGR, supported by new refinery investments. The market development is further shaped by clean-label trends, supply chain diversification efforts, and advances in fat modification technology.

Global Specialty Fats And Oils Market Trends and Insights



Growth in Processed and Packaged Food Consumption

Food manufacturers are experiencing higher demand for specialty fats as consumers increasingly prefer processed foods. These manufacturers need functional lipids to enhance product texture, extend shelf life, and improve nutritional content. The growth of the global processed food market has prompted manufacturers to incorporate specialty fats in their confectionery, bakery, and dairy products, as these ingredients play a vital role in product formulation and quality. With the FDA's ban on partially hydrogenated oils in food products coming into effect in August 2025, manufacturers must switch to specialty fats that deliver similar functionality without trans-fat content. Cargill has set an industry benchmark by becoming the first global edible oils supplier to meet WHO standards for industrially produced trans-fatty acids, maintaining content below 2 grams per 100 grams. These regulatory requirements continue to drive the demand for specialty fats as manufacturers seek alternatives to traditional hydrogenated oils while ensuring product quality and consumer satisfaction.

Rising Demand for Healthier and Functional Ingredients

As consumers become increasingly health-conscious, they seek functional ingredients that deliver nutritional benefits beyond basic calories, making specialty fats essential in health-focused product development. The FDA's updated "healthy" food definition, taking effect in February 2025, emphasizes nutrient-dense foods and limits saturated fat content, opening new opportunities for specialty oils with beneficial fatty acid profiles . Plant-based beverage manufacturers have begun incorporating omega-3 fatty acids into their products, utilizing enzymatic interesterification technology to produce high-quality omega-3 triglycerides while maintaining natural oil characteristics. The FDA's approval of Barry Callebaut's qualified health claims for cocoa flavanols in April 2025 reinforces the therapeutic value of specialty lipid ingredients. The recovery of the Peruvian anchovy fishery, which produced 1.1 million tons in the latest season, has helped address the omega-3 raw material shortages that previously restricted functional ingredient applications.

Volatility in Raw Material Prices

The persistent instability in raw material prices significantly hampers the growth of the specialty fats market, creating operational challenges for manufacturers who must navigate unpredictable input costs. These cost fluctuations directly impact their ability to plan production schedules effectively and maintain stable profit margins. The dramatic increase in used cooking oil imports from China to the United States, which saw a threefold rise in 2023, has introduced substantial concerns about feedstock quality standards and pricing transparency within the biofuels industry. The ongoing volatility in palm oil prices, evidenced by Malaysian futures fluctuating between MYR 4,000-4,600 (USD 903-1,038) per tonne through March 2025, demonstrates the broader supply-demand disparities that ultimately affect specialty fats pricing across the value chain.

Other drivers and restraints analyzed in the detailed report include:

Surge in Demand for Cocoa-Butter Equivalents (CBEs) / Clean Label and Natural Product Trends / Limited Availability of Quality Raw Materials /

For complete list of drivers and restraints, kindly check the Table Of Contents.

Segment Analysis

The global specialty oils market demonstrates strong market fundamentals, with a commanding 72.16% share in 2024. This dominance stems from the essential role these oils play across food processing operations, biodiesel manufacturing, and diverse industrial applications. Meanwhile, specialty fats are emerging as a high-potential segment, with projections indicating a robust growth rate of 7.59% through 2030. The market landscape reveals notable shifts in key oil segments. Soybean oil maintains its position as the primary vegetable oil in food applications, with U.S. suppliers strengthening their presence in Korean markets through increased export capabilities.

The rapeseed/canola oil segment faces supply challenges as production volumes lag behind market demand, creating opportunities for alternative specialty oils. El Nino-related weather impacts have severely affected coconut oil production, reducing yields by half and driving up prices. In contrast, olive oil continues to benefit from consumer preference for healthier options. The accelerated growth in specialty fats reflects their increasing importance in trans-fat elimination and clean-label initiatives, particularly as cocoa butter equivalents gain traction amid volatile cocoa prices.

The market for specialty fats and oils continues to be dominated by liquid forms, which account for 69.45% of the market share in 2024. This preference stems from their practical advantages in food processing operations and the well-established infrastructure for oil refining and distribution. Companies like Cargill have invested in this infrastructure, operating two vegetable oil refineries in Malaysia that specialize in soft oil processing. Food manufacturers, particularly in the confectionery and bakery segments, benefit from the straightforward logistics and integration of liquid specialty oils into their production processes, where temperature-controlled handling ensures consistent product quality.

In contrast, dry specialty fats are emerging as the fastest-growing segment, with an impressive 8.16% CAGR through 2030. This growth is fueled by significant improvements in production methods, particularly in spray-drying and encapsulation technologies. These advancements have addressed key industry challenges by enhancing product stability, extending shelf life, and enabling controlled release applications. The improved protection of sensitive ingredients, such as omega-3 fatty acids, from oxidation has expanded the application potential of dry forms across food, pharmaceutical, and cosmetic industries.

The Specialty Fats and Oils Market Report is Segmented by Type (Specialty Fats and Specialty Oils), Form (Liquid and Dry), Functionality (Molding and Filling Fats, Coating and Enrobing Fats, and More), Application (Food and Beverage, Cosmetic and Personal Care, Pharmaceutical, and More), and Geography (North America, Europe, Asia-Pacific, and More). The Market Forecasts are Provided in Terms of Value (USD).

Geography Analysis

The Asia-Pacific region maintains the largest share of 40.36% in the global specialty fats market through its integrated plantation-to-refinery operations and strong domestic consumption. Indonesia and Malaysia contribute more than 80% of global certified sustainable palm oil, ensuring a consistent supply of traceable specialty fats to European markets. China's domestic soybean production has reached a 20-year peak, but the country retains an 89% import dependency. Japan and Australia have enhanced their market positions by investing in domestic crushing operations, including a new canola processing facility near Perth, which reduces import dependence and improves supply chain stability.

The Middle East & Africa region exhibits the fastest growth rate at 7.68%, supported by government policies that encourage downstream processing investments. Ivory Coast expands its estates while Tanzania attracts private capital due to its agricultural potential. Saudi Arabia strengthens its regional position by developing Jeddah as a specialty oil processing hub. Regional buyers' increasing demand for RSPO-certified materials has enhanced plantation audit processes and satellite monitoring systems.

North America and Europe maintain their market positions through regulatory oversight and consumer education. The United States moves toward its trans-fat ban implementation in August 2025, while Cargill has modified its refineries to comply with RSPO and WHO standards. The European Union's Deforestation Regulation, effective January 2025, mandates geolocation data for imports, encouraging blockchain-based tracking systems. South America sustains its market presence through Brazil's record soybean production and Argentina's biodiesel policies, securing its position in the specialty fats and oils market.

List of Companies Covered in this Report:

Cargill, Incorporated / Wilmar International Limited / Bunge Limited / Archer Daniels Midland Company / Fuji Oil Holding Inc. / AAK AB / Musim Mas Group / Kuala Lumpur Kepong Berhad / Mewah Group / Olam Group / IOI Corporation Berhad / Sime Darby Plantation Berhad / Golden Agri-Resources Ltd. / Deoleo S.A. / KTC Edibles Ltd. / IFFCO Group / Aigremont NV / Avril Group (Saipol) / SD Guthrie International / Oleo-Fats Incorporated /

Additional Benefits:

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