The consumption of vegetable oils falls into two major applications: i) food industry, and ii) industrial uses, including biodiesel, which is a more recent trend. The predominant use is for food with over 80% of the market, with the industrial and biodiesel markets far behind. Thus, the rapid demand for vegetable oils has been sparked off by the food market rather than the industrial or biodiesel sectors, contrary to general belief. Although there is a growing role for industrial uses, the food industry is expected to be the dominant factor in the future for reasons already stated above.
It is worth pointing out some particular differences and trends in world consumption of the most important vegetable oils (i.e. rapeseed, palm and soybean):
The use of rapeseed oil for food applications is rather stable with the main growth being in industrial applications since 2003 (specifically biodiesel in Europe).
The use of palm oil for food has actually doubled in the past 8 years. Since 2003, industrial applications are also growing and this may be partly related to biodiesel production, besides other applications in the chemical industry.
The use of soybean oil for food is still increasing. Prior to 2005, industrial uses of soybean oil were marginal and since then they have been growing, mainly for biodiesel production in the USA and South America (primarily Argentina and Brazil).
There are also important new actors and trends in supply and demand to be taken into account. For example, China is rapidly becoming the world-leading importer of vegetable oils; Argentina’s share of the export market is growing rapidly and is becoming one of the largest producer and major exporter of vegetables oils, primarily soybean, due to its favourable conditions. As elsewhere, the rapid expansion of soybean in Argentina is causing alarm due to the many potential ecological and environmental impacts, as explained later.