The number of oil palm trees is increasing because palm oil is the most efficient vegetable oil crop on Earth, and global demand for it keeps rising across food, cosmetics, animal feed, and biofuel industries. No other oil crop comes close to matching its yield: a single hectare of oil palm produces roughly 3.3 tons of oil per year, several times more than the same area planted with soybeans, rapeseed, or sunflower. That efficiency, combined with its unique physical properties and aggressive government biofuel policies, has driven continuous expansion of plantations across the tropics.
Palm Oil Produces More Oil Per Hectare Than Any Rival
The simplest reason oil palm plantations keep growing is economics. At around 3.3 tons of oil per hectare, palm oil dwarfs the output of every competing oilseed crop. Soybeans, the next most traded oilseed, yield only about 0.4 to 0.5 tons of oil per hectare. Rapeseed and sunflower fall somewhere in between but still lag far behind palm. This means that to produce the same volume of oil from soybeans, you would need roughly six to eight times more land. For countries and companies trying to meet surging vegetable oil demand without converting even more forest or farmland, palm is the most land-efficient option available.
That productivity advantage translates directly into lower costs. Palm oil is consistently one of the cheapest vegetable oils on the global market, which makes it attractive to food manufacturers, consumer goods companies, and fuel producers operating on thin margins. As long as palm remains the cheapest high-volume option, the economic incentive to plant more trees persists.
It Shows Up in Half of All Supermarket Products
Palm oil is found in roughly half of all packaged supermarket products. That includes obvious items like cooking oil and margarine, but also shampoo, lipstick, body lotion, instant noodles, chocolate, and ice cream. The oil palm fruit actually yields three distinct products with different uses: crude palm oil for edible purposes, palm kernel oil for cosmetics, and palm kernel cake (the leftover solids) for animal feed. Very little of the crop goes to waste, which further improves its economics.
What makes palm oil so versatile in food manufacturing is its unusual chemistry. It has a near 50-50 split between saturated and unsaturated fatty acids, which is rare among vegetable oils. That composition makes it semi-solid at room temperature, so it doesn’t need to be hydrogenated, a process that creates trans fats. Food manufacturers can use it as-is to give products a creamy texture, a stable shelf life, and good frying performance. Its smoke point sits around 230°C, making it highly resistant to breaking down during deep frying. It also contains natural antioxidants that further improve its stability at high temperatures. These properties are difficult to replicate with other vegetable oils without additional processing, so food companies have few practical substitutes at the same price point.
Biofuel Mandates Are Creating New Demand
Government biofuel policies are one of the fastest-growing drivers of oil palm expansion. Indonesia, the world’s largest palm oil producer, raised its biodiesel blending mandate to 35% in February 2023, meaning that 35% of every liter of diesel fuel sold in the country must come from palm oil. Officials have discussed pushing that to 40%. The European Union has also used palm oil as a biodiesel feedstock, though it has moved toward phasing out palm-based biofuels over deforestation concerns.
These mandates effectively guarantee a floor of domestic demand regardless of what happens in global food markets. When a country requires its entire transportation sector to burn a palm-based fuel blend, producers need millions of additional tons of crude palm oil every year. That kind of policy-driven demand encourages farmers and plantation companies to plant new trees, since they know the market for their crop is locked in by law.
Smallholder Farmers Depend on It
Oil palm isn’t only an industrial commodity. Smallholder farmers produce over 40% of global palm oil. In Indonesia and Malaysia, which together account for more than 85% of world production, millions of rural families rely on oil palm as their primary cash crop. For many of these farmers, oil palm offers higher and more reliable income than alternatives like rubber or rice. That economic reality creates strong grassroots pressure to expand plantings, independent of what multinational corporations do.
When commodity prices rise, smallholders often respond by clearing additional land and planting more trees on their own initiative. Because an oil palm tree takes about three years to start producing fruit and remains productive for 25 to 30 years, each planting decision locks in decades of land use. The cumulative effect of millions of individual farming decisions is a steady upward trend in total tree count.
Expansion Is Spreading Beyond Southeast Asia
While Indonesia and Malaysia still dominate production, the next wave of oil palm expansion is expected in Africa and Latin America. Countries with large areas of suitable tropical land, including Brazil, Nigeria, Colombia, Ivory Coast, the Democratic Republic of the Congo, and Ghana, are projected to see significant new planting. Asia currently has about 14.1 million hectares under oil palm cultivation, compared to 0.9 million hectares in Latin America and 0.4 million hectares in Africa, so the potential for growth in those regions is enormous.
In some of these countries, expansion has occurred on grasslands and shrublands rather than dense forest, as seen in Colombia and Papua New Guinea. But the pattern varies widely by region. The availability of land classified as suitable for oil palm in Africa and South America means that even if Southeast Asian expansion slows due to land constraints or regulation, global tree counts are likely to keep climbing as production shifts to new frontiers.
Sustainability Efforts Haven’t Slowed Growth
Certification programs like the Roundtable on Sustainable Palm Oil (RSPO) now cover about 20% of global production, totaling 16.2 million metric tons. RSPO members collectively account for 39% of global output. These programs aim to prevent deforestation, protect biodiversity, and improve labor conditions. But certified sustainable palm oil still represents a minority of the market, and certification doesn’t reduce the total number of trees planted. It changes how and where they’re planted.
Consumer pressure in Europe and North America has pushed some companies to source certified oil, but the largest and fastest-growing markets for palm oil are in Asia and Africa, where sustainability labeling carries less commercial weight. As long as global population growth, rising incomes in developing countries, and biofuel mandates continue to push demand upward, the number of oil palm trees will keep increasing. The crop is simply too productive, too cheap, and too versatile for the market to move away from it at the current scale of demand.