Global Industry Overview: Fats and Oils

Industry firms extract and process a variety of fats and oils, mostly for use in human foods and animal feed. Major production categories include cottonseed oils, soybean oils, other vegetable oils, animal fats and oils, and margarine, shortening, and related products. (Production of butter, however, is not included under this topic.)

Industry Snapshot

In the middle years of the twenty-first century's first decade, global supplies of fats and oils were sufficient to meet steadily increasing world demand. According to analysis of the Food and Agricultural Organization (FAO) of the United Nations, production of oil-bearing crops increased by 4 percent worldwide in 2005. World consumption of oilseeds rose steadily through the 1990s, reaching 347 million metric tons (mmt) in 2004. Of this total, about 288 million metric tons (mmt) were expected to be crushed for oil or oilmeal.

Growing demand in developing countries was expected to account for more than 60 percent of this increase. Soy and palm oil consumption was expected to increase the most, while use of sunflower seed oil was likely to decrease. Use of non-edible oils was also expected to rise, most notably for the production of biodiesel fuels.