Palm Mid-Fraction is favored over other palm oil by-products for its superior shelf-life stability in end-use products. It is typically produced through the fractionation process, which separates its components, primarily stearin and olein. Double-fractionation of these phases results in palm mid-fraction, which is rich in tocopherol and carotene. This ingredient is primarily utilized in the production of edible fats and butter substitutes. Additionally, palm oil used in industrial processes is transformed into various derivatives.
The global palm oil and mid-fraction industry is projected to reach a valuation of USD 237 billion in 2022 and is anticipated to grow at a CAGR of 4%, reaching USD 285 billion by 2032. The palm mid-fraction market is primarily driven by increasing demand for baked goods and ready-to-eat food products.
Palm mid-fraction is a key ingredient in the production of cocoa butter equivalents (CBE). It also serves as a healthier alternative to hydrogenated soft oils commonly used in bakery and confectionery products. This shift toward palm mid-fraction is driving market growth, particularly as consumers increasingly prioritize health-conscious choices.
Opportunities for Palm Mid-Fraction Market Participants:
On the supply side, several opportunities exist for the Indonesian SMEs (Small & Medium-sized Enterprises) to capitalize in the European market, as also the RSPO constituency is coming up special plans to bring Indonesian SMEs under its wing. With their palm mid-fraction meeting quality and sustainability standards, Indonesian palm mid-fraction manufacturers have ample opportunities to tap into the European market potential.
Met by promising demand from the bakery and confectionery industry in Europe and North America for palm mid-fraction, healthy support from government and regulatory bodies is further likely to create a win-win scenario in the palm mid-fraction market for the Indonesian manufacturers.
Demand for packaged bakery products fuelling palm mid-fraction market growth
As bakery and on-the-go products are a favorite amongst the younger generations, their demand has grown considerably in the past decade. These products which are the major end-use applications for the palm oil & mid-fraction are indirectly driving the growth of the palm mid-fraction market.
Also, manufacturers are facing challenges to developed bakery products which parade combined qualities of shelf life stability as well as good texture and taste in bakery products. The demand for palm oil & mid-fraction is spurred through developing regions such as Nigeria, whose economy is significantly dependent on the production and export of edible fats and oils.
Barriers in the palm mid-fraction market are apparent in the supply chain. The palm mid-fraction demanded in developed countries should be certified for its high quality and sustainability and these expectations are not met across all participants in the supply chain of palm mid-fraction, due to the very fact that in developing regions like Malaysia, production and transport of palm mid-fraction comes at a cost, which the processors are often not ready to pay.
Certifications mainly concern the RSPO (Roundtable on Sustainable Palm Oil) and greenhouse gas emission reductions. RSPO traders and manufacturers of palm mid-fraction are a significant constituency in the palm mid-fraction market, representing about 48% of global palm oil trade.
Global Palm Mid-Fraction market: Key Market Participants
Examples of some of the market participants in the global palm mid-fraction market identified across the value chain are Mewah Group, Intercontinental Specialty Fats Sdn. Bhd., Felda Iffco Sdn Bhd and Pavlos N. Pettas S.A. amongst others.
Global Palm Mid-Fraction Market: Segmentation:
The palm mid-fraction market is segmented on the basis of grade and end use.
On the basis of grade, the palm mid-fraction market is segmented into-
- Soft Palm Mid-Fraction
- Hard Palm Mid-Fraction
On the basis of end use, the palm mid-fraction is segmented into-
- Food Industry
- Confectionery
- Bakery
- Edible Oils & Fats
- Others
- Surfactants & Detergents
- Personal Care & Cosmetics
- Others
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