The Squeezed Middle: Charting the 20-Year Future for Palm Acid Oil in Feed and Soap

For decades, the Palm Acid Oil market was defined by two consistent, high-volume pillars: animal feed and soap manufacturing. These traditional uses formed the backbone of the industry. Understanding these foundational markets remains critical, even as new players reshape the landscape. At Tradeasia International, our deep history in palm and oleochemicals gives us a unique insight into how these core applications are adapting to survive.

Why Animal Feed Will Become a 'Market of Opportunity'

The animal feed sector has always prized Palm Acid Oil for one simple reason: its incredible energy value, often exceeding 8,000-8,500 kcal/kg. For poultry and swine, it was a highly cost-effective energy source. In 2020, this sector was the single largest user, consuming an estimated 45% of global supply. However, by 2040, this share is projected to collapse to under 15%. This isn't because the product is less effective; it's because feed compounders operate on thin margins and cannot compete with the premiums paid by biofuel refineries. The feed market is not disappearing, but it is transforming. It is becoming a "market of opportunity"—only buying when biofuel demand temporarily dips.

The Soap & Surfactant Dilemma

The soap industry faces a similar squeeze. As a cost-effective source of fatty acids, Palm Acid Oil was a primary raw material for basic soap noodles. This usage is now under severe pressure. Many soap manufacturers have seen their raw material costs escalate by 30-40% in just a few years as they are forced to bid against HVO plants. "The soap market is resilient, but it is being forced to innovate," noted one chemical procurement expert. This pressure is forcing a strategic choice: either absorb the high costs, reformulate with different feedstocks, or move "upstream" by investing in distillation to create higher-value, specialized surfactants, as outlined in our analysis on high-value oleochemicals.

Sources:

1. Palm-Chemicals.com: Palm Acid Oil (for Animal Feed & Soap Noodles)

2. FeedNavigator: Analysis of Rising Feedstock Costs and Alternative Fats

3. Grand View Research: Palm Acid Oil Market Share by Application (Feed vs. Soap)