Market Trends of Africa Fats and Oil Industry
Wide Applications of Oils and Fats in Different End-Use Industries
- The primary factor driving the market growth is the broad applications of oils and fats in various end-use industries. For instance, oils are extensively used in automobile parts, such as two-stroke engines, chainsaws, hydraulics, mold releases, and open gears. According to the National Association of Automobile Manufacturers of South Africa (NAAMSA), the total passenger car sales stood at 32,392 units in September 2022, up from 29,537 units in September 2021, registering a Y-o-Y growth of around 21.3%.
- Therefore, the increasing sales of passenger cars in the region provide lucrative opportunities for manufacturers to expand their market share in producing lubricants for industrial and transportation applications. Besides this, the market is experiencing an accelerating demand from the personal care and cosmetic segment. Oils and fats are used in products such as moisturizers, creams, serums, eye creams, hair oils, and others.
- Moreover, cosmetic manufacturers are launching healthy and natural ingredient-based products to cater to the customers' demand for products with organic products. For instance, in April 2021, a South Africa-based company, Bio Oil, launched skincare oil made with soybean, sunflower, safflower, chia seed, and jojoba seed oil.
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Oils Are Currently Consumed More Than Fats
- Among all types of oils, palm oil is currently in high demand. To meet domestic and international demand, there has been an increase in investments in palm oil production in countries such as Nigeria and Ghana. Further, palm oil is often produced locally in many African countries, supporting local economies and providing a stable oil supply. For instance, according to the US Department of Agriculture, palm oil production in Nigeria accounted for 1.4 million metric tons, 1.4 million metric tons, and 1.275 million metric tons in 2022, 2021, and 2020, respectively.
- Moreover, African palm oil producers are leveraging export opportunities in the global market and are expanding their production to meet the demand. For instance, according to the ITC Trade Map Trade statistics for international business development, in 2022, the export value of crude palm oil in South Africa accounted for USD 3.082 million. Such factors provide lucrative growth opportunities for leading players and, in turn, drive the overall market growth.
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