Thailand palm oil export: 5 Powerful Growth Drivers 2025
Thailand’s Growing Role in Global Palm Oil Markets
Thailand palm oil export has become a significant force in the global vegetable oil market, with the country ranking as the world’s third-largest producer of palm oil. For those seeking a quick overview:
| Thailand Palm Oil Export Facts (2023) | Statistics |
|---|---|
| Total export value | $732,392,150 |
| Total export volume | 803,698,000 kg |
| Main destination | India (97% of exports) |
| Secondary markets | Kenya, Lao PDR, Cambodia |
| Global production ranking | 3rd (4.3% of world production) |
| Domestic consumption | 75% of production |
Despite being overshadowed by industry giants Indonesia and Malaysia (who together account for 83.9% of global production), Thailand has carved out a unique position in the palm oil export landscape.
The country’s palm oil industry involves approximately 400,000 farm households, with 85.5% of the planted areas concentrated in the southern region. This smallholder-dominated structure creates both challenges and opportunities for Thailand’s export ambitions.
Recent years have seen Thailand’s export volumes fluctuate due to several factors:
- Weather patterns (El Niño/La Niña cycles)
- Government buffer stock policies
- Domestic biodiesel blend mandates
- Global price volatility
- Export restrictions (including a temporary ban until December 2025)
While India remains the dominant destination for Thai crude palm oil exports, accounting for over 97% of export value, markets like Kenya, Lao PDR, and Cambodia represent emerging opportunities for diversification.
As global demand for sustainable vegetable oils continues to grow, Thailand faces the challenge of balancing domestic consumption needs with export potential while addressing sustainability concerns. Only about 4.6% of Thai plantations currently hold RSPO certification, though research shows certified smallholders achieve significantly higher net returns per rai.
Mapping Thailand’s Palm Oil Supply Chain
When you look at a bottle of palm oil, it’s easy to forget the incredible journey it takes from plantation to shelf. Thailand’s palm oil industry has a character all its own, quite different from our neighbors. Understanding this journey helps explain how Thailand palm oil export markets operate and thrive.
Picture this: about 6.3 million rai (roughly 1 million hectares) of lush oil palm plantations stretching across Thailand, with a whopping 85.5% nestled in our southern provinces. Surat Thani, Krabi, and Chumphon lead the way as the heart of our palm oil country. This concentration is a double-edged sword—it creates efficient processing hubs but also means we feel regional weather changes more acutely.
What makes our approach special? It’s all about the small farmer. While other countries rely on massive plantations, Thailand’s palm oil story is written by approximately 400,000 farm households working relatively small plots of land. These dedicated farmers achieve fresh fruit bunch (FFB) yields of around 2.77 tons per rai, contributing to our impressive national production of 16.8 million tons of FFB in recent years.
Our processing capacity is nothing to sneeze at either—132 crude palm oil mills dot the landscape with the muscle to process 5.6 million tons annually. Interestingly, they currently run at about 41% capacity, which means there’s plenty of room to grow our exports when the time is right.
For more detailed statistics and information about the palm oil industry in Thailand, you can visit the Statista’s comprehensive topic page on Thailand’s palm oil industry.
Role of Smallholders & Cooperatives
The heart and soul of Thailand’s palm oil industry beats in the hands of our smallholder farmers. Unlike the plantation giants dominating other Southeast Asian countries, our approach feels more personal, more connected to the land and communities.
These family-run farms typically operate with limited machinery, relying on local collection centers as their bridge to the market. While they produce excellent fruit, these farmers often face challenges with variable quality and limited bargaining power when selling their harvest.
That’s where cooperatives come in, and at RUNGTACOLTD, we’ve seen how these groups transform farmers’ prospects. By banding together, smallholders gain collective bargaining strength with mills, share valuable farming knowledge, access certification programs more easily, and enjoy cost savings on everything from fertilizer purchases to transportation.
The support doesn’t end there. Government agencies and private companies provide crucial extension services, helping farmers boost their yields and quality. These partnerships are vital for keeping Thailand palm oil export competitive, helping our farmers close the productivity gap with larger plantation-based producers elsewhere.
Upstream-to-Downstream Integration
From tree to shipping container, palm oil’s journey involves several value-adding steps, each requiring precise timing and handling.
It all starts with harvesting fresh fruit bunches (FFB)—a race against the clock as these must be processed within 24 hours to maintain oil quality. This creates quite the logistical puzzle in areas dominated by small farms! Once harvested, the fruit starts on a clear path through the supply chain:
First stop: collection centers, where smallholders bring their harvest to sell. These local hubs serve as the first aggregation points in the journey. Next, the fruit reaches CPO mills, where the magic happens—FFBs are transformed into crude palm oil with approximately 18-20% oil extraction rate. From there, the oil moves to refineries that convert the crude product into refined, bleached, and deodorized palm oil ready for food and industrial applications. Some continues to specialized processing facilities for conversion into biodiesel, oleochemicals, and other value-added products.
This integrated approach creates exciting opportunities for Thailand palm oil export growth. The more sophisticated downstream products typically command premium prices internationally, offering better returns for everyone in the supply chain.
At RUNGTACOLTD, we’ve invested considerable time understanding each stage of this complex process. Our experience in Lampang has taught us valuable lessons about coordinating these intricate supply chains to deliver the highest quality products to our international customers. When you choose Thai palm oil, you’re benefiting from this carefully orchestrated journey from our southern plantations to global markets.
Thailand Palm Oil Export: Volumes, Values & Destinations
Let’s explore Thailand palm oil export performance – a story that’s as much about opportunity as it is about putting too many eggs in one basket.
In 2023, Thailand’s palm oil exports reached impressive heights, with total export value hitting $732,392,150 and volume reaching a substantial 803,698,000 kg (about 804,000 tons). While these numbers represent a significant slice of Thailand’s agricultural exports, they’re still modest compared to the country’s overall palm oil production capacity.
What really jumps out when examining these figures is the overwhelming concentration in a single market. India stands as the undisputed champion destination for Thai crude palm oil, accounting for a staggering $713,320,840 in value and 782,785,000 kg in volume – both representing 97.4% of total exports. That’s putting almost all your palm oil in one very large basket!
While much smaller in comparison, secondary markets hint at promising diversification opportunities. Kenya has emerged as the second-largest buyer with $16,915,250 (18,478,200 kg), followed by neighboring Lao PDR at $1,187,750 (1,569,790 kg) and Cambodia with $968,320 (865,460 kg).
For exporters navigating international trade regulations, it’s worth noting that most Thailand palm oil export shipments fall under HS code 151110 – the Harmonized System designation for crude palm oil.
For more detailed trade data and visualizations about Thailand’s palm oil exports, you can explore the OEC’s comprehensive profile on palm oil trade in Thailand.
Historical Trends in Thailand palm oil export
The journey of Thailand palm oil export growth over time reveals a complex dance between domestic policies, global market conditions, and the realities of production.
The past decade has been quite a rollercoaster ride for Thai palm oil exports. We’ve seen periods of impressive growth, like the 35.6% jump to 1.0 million tons during 2021-2022, followed by contractions when domestic supplies tightened or policy restrictions kicked in. Global vegetable oil price fluctuations have also sent export volumes on quite a wild ride.
What makes Thailand’s export pattern particularly interesting is the balancing act between feeding domestic appetites and serving international markets. With roughly 75% of production consumed at home, exports represent the smaller portion of output. This makes export volumes especially sensitive to production hiccups and government interventions.
The government’s buffer stock policy plays a crucial role in this equation. When stocks climb above the target threshold of 0.25-0.30 million tons, export promotion often gets the green light. But when stocks dip below this level, export restrictions may appear – as we’ve seen with the temporary export ban announced for 2025 due to drought and plant disease impacts.
Key Markets Driving Thailand palm oil export Growth
While India continues to be the overwhelming destination for Thai crude palm oil, understanding this relationship and exploring emerging markets is essential for forward-thinking exporters like us at RUNGTACOLTD.
India’s dominance isn’t accidental. It stems from several key factors: its massive population with growing vegetable oil consumption, periodic reductions in palm oil import duties, well-established trade relationships, and price sensitivity that favors palm oil over pricier alternatives.
Beyond the Indian giant, several emerging markets show promising potential for diversification. African markets, particularly Kenya, have emerged as Thailand’s second-largest palm oil export destination, with room to grow throughout East Africa. Closer to home, ASEAN neighbors like Lao PDR, Cambodia, and Myanmar offer growing markets with the obvious advantage of proximity. And let’s not overlook China, where exports of refined palm oil surged by an eye-popping 370% in 2024 – a strong indicator that value-added products could be the ticket to market expansion.
Shipping logistics and tariff structures play a significant role in competitiveness across these markets. Thailand’s geographic position gives us a natural advantage when serving ASEAN markets, but presents challenges for more distant destinations where other major producers may have already established stronger footholds.
At RUNGTACOLTD, we keep a close eye on these market dynamics to ensure we’re positioning our high-quality palm oil products where they’ll bring the most value to both our business and our customers.
Competitiveness & Challenges on the Global Stage
Thailand stands proudly as the world’s third-largest producer of palm oil, carving out a meaningful 4.3% slice of global production. While this positions us well on the international stage, we’re realistic about our place in a market dominated by Indonesia and Malaysia, who together control over 80% of world output.
This position creates a unique landscape for Thailand palm oil export growth that comes with both sunshine and rain:
Our Thai palm oil shines with several competitive advantages. We’re known for high-quality production with strict quality controls that importers appreciate. Our strategic location in Southeast Asia gives us natural advantages for serving Asian markets. We also benefit from a relatively stable political environment, and our growing reputation for sustainability efforts is opening doors in environmentally conscious markets.
However, we face our share of challenges too. Our production costs run higher than our larger neighbors, and our smaller average farm sizes limit economies of scale. With less market share, we have limited influence on global price formation. Perhaps most challenging are the periodic export restrictions imposed to protect domestic supply—a reality for agricultural exporters in many countries.
One significant hurdle is the price premium that Thai crude palm oil often carries compared to Malaysian or Indonesian alternatives. This makes our products less competitive in price-sensitive markets like India, where pennies per ton can determine purchasing decisions.
The recent announcement of a temporary export ban until December 2025 (with a planned review in January 2025) illustrates how domestic priorities can sometimes disrupt export momentum. This particular ban, triggered by reduced production due to drought and plant diseases, aims to stabilize domestic prices—but creates uncertainty for our international buyers.
Climate risks add another layer of complexity to our export picture. Research shows that El Niño conditions can shrink Thai palm oil output by 2-4% in affected years. On the flip side, La Niña typically boosts yields in our southern growing regions, creating a natural cycle of feast and famine that exporters must steer.
For more detailed information about Thailand’s agricultural production and exports, you can check the USDA’s Crop Explorer Country Summary for Thailand.
Policy & Economic Levers
The Thai government employs several policy instruments that directly impact the Thailand palm oil export sector, creating a dynamic regulatory environment we must constantly monitor.
The biodiesel blend mandates serve as a powerful demand-management tool. By adjusting the required biodiesel blend in transport diesel (between B5, B7, and B10), authorities can effectively dial domestic CPO demand up or down as needed.
Buffer stock management represents another key policy lever. The government maintains a target buffer stock of 0.25-0.30 million tons of CPO to stabilize domestic prices. When stocks rise above this level, exports are encouraged; when they fall below, exports may face restrictions.
During periods of oversupply, export promotion subsidies have been implemented to help clear excess inventory and support prices—creating windows of opportunity for exporters like us at RUNGTACOLTD.
For the many smallholders who form the backbone of our industry, income guarantee programs provide a vital safety net when market prices fall below production costs, helping maintain the stability of our supply base.
At RUNGTACOLTD, we’ve learned that understanding these policy shifts is just as important as tracking production fundamentals when planning our export strategies. Our experience has taught us to read the policy winds as carefully as we monitor weather patterns.
Market Headwinds
Several emerging challenges are appearing on the horizon that could impact Thailand palm oil export growth in the coming years.
The EU Deforestation-Free Regulation (EUDR) creates new problems for all palm exporters. This regulation requires us to prove our products aren’t linked to deforestation, creating additional compliance costs and potential market access barriers for Thai exporters who lack robust traceability systems.
Global shipping costs have experienced a rollercoaster ride in recent years, with rising freight rates impacting our competitiveness in distant markets. When shipping costs spike, our geographic advantages in nearby markets become even more valuable.
Currency fluctuations between the Thai Baht and major trading currencies can dramatically impact our export competitiveness, sometimes overnight. A strengthening Baht makes our exports more expensive for foreign buyers, while a weakening Baht improves our competitive position.
The export policies of larger producers create a complex environment. Export fees and restrictions imposed by Indonesia and Malaysia can create temporary windows of opportunity for Thai exporters, but they also contribute to price volatility that makes planning difficult.
Looking further ahead, the growing adoption of electric vehicles could potentially reduce demand for biodiesel, affecting a major domestic use case for palm oil and potentially freeing up more supply for export.
At RUNGTACOLTD, we steer these challenges by staying nimble, maintaining strong relationships with our buyers, and focusing on quality that commands loyalty beyond price considerations. We believe Thailand’s position as a reliable, quality-focused exporter will continue to create opportunities even as the global landscape evolves.
Sustainability & Certification Pathways
Sustainability isn’t just a buzzword anymore—it’s become the ticket to global markets for Thailand palm oil export producers. Right now, only about 4.6% of Thailand’s oil palm plantations carry the coveted RSPO (Roundtable on Sustainable Palm Oil) certification. This small percentage tells a story of both challenges and tremendous untapped potential.
When we talk with farmers who’ve acceptd sustainability certification, the numbers speak for themselves. RSPO-certified smallholders in Thailand are seeing their bank accounts grow—with net returns of 20,776 THB per rai compared to just 13,773 THB for their non-certified neighbors. That’s not just good ethics; it’s good business!
These certified farmers aren’t just earning more money. They’re also harvesting an additional 412 kg per rai on average after implementing sustainable practices. Plus, they gain access to premium prices and discounts on farm inputs that further boost their bottom line.
But let’s be honest—certification isn’t a walk in the park, especially for small farmers. The upfront costs can be steep, with a typical group of 60-100 smallholders facing certification expenses around 1.2 million THB. Many farmers also struggle with the technical knowledge needed and the paperwork that would make even an accountant sweat.
Here at RUNGTACOLTD, we’ve seen the market shifting before our eyes. What was once just a nice-to-have premium feature is rapidly becoming a must-have just to get your foot in the door with international buyers. That’s why we’re committed to working with certified suppliers—we believe sustainable farming is the future of Thailand palm oil export.
Meeting Global Buyer Requirements
International buyers aren’t just asking for certification papers anymore—they want the whole sustainability package. They’re looking for robust traceability systems that can track every drop of oil from the mill all the way back to the plantation it came from. This often means embracing digital documentation and maintaining unbroken chain of custody certification.
Many buyers now require strict NDPE policies—that’s No Deforestation, No Peat, No Exploitation. These policies reflect a commitment to avoid clearing forests, developing on fragile peatlands, or exploiting workers and local communities.
Technology is changing the game too. Satellite monitoring has become an essential tool for verifying zero-deforestation claims. It’s hard to argue with pictures from space showing what’s happening on your land!
For Thailand’s thousands of smallholders, group certification offers a practical path forward. By working together, small farmers can share costs and knowledge, making sustainability certification economically viable when it would be impossible for them individually.
We’re seeing promising developments in jurisdictional approaches and Agri-PPPs (Agricultural Public-Private Partnerships) that spread costs and responsibilities across multiple stakeholders. These innovative models could be game-changers for Thailand’s smallholder-dominated palm oil sector.
Environmental & Social Impacts
The environmental and social footprint of palm oil production directly affects both market access and pricing. Thailand actually has a potential marketing advantage here—unlike some producing regions, our palm expansion has primarily occurred on former rubber plantations and fruit orchards rather than primary forests.
Biodiversity conservation efforts are making a difference too. Implementing wildlife corridors and setting aside conservation areas within plantation landscapes helps maintain ecosystem services and meets increasingly strict buyer requirements. When you maintain natural habitats alongside production areas, everybody wins—including the wildlife!
Fair labor standards remain absolutely essential. This means ensuring workers receive at least minimum wage, have safe working conditions, and aren’t subjected to child labor practices. At RUNGTACOLTD, we believe treating people right is both morally correct and good business.
We can’t forget that palm oil provides crucial income for approximately 400,000 Thai households. Community livelihoods depend on this crop, making its sustainable development a social imperative as much as an environmental one. When done right, palm oil production lifts communities while preserving the environment.
These factors aren’t just nice-to-haves anymore, especially for premium markets in Europe and North America. Consumers and regulators in these regions increasingly demand solid evidence that their palm oil comes from responsible production practices. For more information about our sustainable products, visit our products page.
Opportunities & Strategic Recommendations
The future of Thailand palm oil export looks promising, despite the challenges we’ve discussed. At RUNGTACOLTD, we’ve seen how strategic approaches can open up new potential in this dynamic market.
Moving Up the Value Chain
Rather than competing solely on commodity pricing, Thai producers have exciting opportunities to develop premium products that command better margins. Specialty fats for the confectionery industry represent one such opportunity – these high-value ingredients require precise formulation but reward producers with significantly higher returns. Similarly, oleochemicals used in personal care products offer a pathway to diversification beyond food markets.
We’ve noticed growing interest in palm-derived nutritional products with specific fatty acid profiles. These specialized ingredients serve the health-conscious consumer segment willing to pay premium prices for quality and traceability.
Riding the Green Energy Wave
Thailand’s experience with biodiesel blends positions us well in the global transition to lower-carbon transportation. Our domestic market has successfully implemented B7-B10 blends (7-10% biodiesel in conventional diesel), creating both technical expertise and production capacity that could serve export markets.
The push toward B20 blends represents another frontier with significant potential. As other countries in Asia and beyond seek to reduce their carbon footprint, Thailand’s experience becomes a valuable export in itself.
What’s particularly exciting is how palm oil mills can transform what was once considered waste into valuable revenue streams. Empty fruit bunches can become organic fertilizer, palm kernel shells serve as renewable solid fuel, and mill effluent generates biogas through anaerobic digestion. These circular economy approaches not only create new export products but also improve the sustainability profile that buyers increasingly demand.
Embracing Digital Change
In our conversations with international buyers, we’re increasingly hearing the same request: “Can you prove where this oil comes from?” Digital traceability systems, particularly those using blockchain technology, offer a compelling solution to this challenge.
By creating an immutable record of each step in the supply chain, these systems build trust with premium buyers and open doors to markets with strict sustainability requirements. For smallholders, participation in these systems can mean access to better prices and more stable buying relationships.
Looking Beyond India
While India remains a crucial market for Thailand palm oil export, the concentration risk is significant. Smart exporters are developing relationships in diverse markets to reduce this dependency:
Emerging Asian economies like Vietnam and the Philippines have growing food processing sectors hungry for quality ingredients. African markets show tremendous potential as rising incomes drive increased vegetable oil consumption. The Middle East presents opportunities as countries seek to ensure food security through diversified sourcing.
Each of these markets has unique requirements and challenges, but the effort to develop them pays dividends in reduced market risk and potentially higher margins.
Supporting Smallholder Success
The backbone of Thailand’s palm oil industry – its smallholders – need innovative financing solutions to invest in both productivity and sustainability. We’ve seen promising results from microfinance programs specifically designed for oil palm growers, allowing them to purchase better seedlings and inputs.
Blended finance models that combine public funding with private capital can reduce risk while ensuring commercial discipline. Perhaps most exciting are results-based payment systems that reward farmers for adopting sustainable practices, creating a win-win for both the environment and farmer incomes.
At RUNGTACOLTD, we’re committed to helping our partners steer certification requirements and access premium markets. Our experience working with farmers in Lampang has given us valuable insights into the real challenges facing Thai agricultural exporters and the practical strategies that can overcome them.
If you’re interested in exploring these opportunities further, we’d love to discuss how we can help your business succeed in the evolving palm oil export landscape.
Frequently Asked Questions about Thailand Palm Oil Exports
What share of Thailand’s palm oil production is exported?
If you’re wondering about the balance between domestic use and exports, here’s the simple answer: about one-quarter of Thailand’s crude palm oil production finds its way to international markets.
Specifically, around 25-26% of Thailand’s palm oil production is exported, while the remaining 74-75% stays within the country. This domestic-first approach is quite intentional – Thailand palm oil export volumes essentially function as a balancing mechanism when production exceeds local needs.
Of the palm oil that remains in Thailand, about 58% is refined for food and industrial applications that feed local businesses and consumers. The other 42% goes into biodiesel production, supporting Thailand’s renewable energy goals.
This prioritization of domestic needs explains why export volumes can swing dramatically from year to year. When harvests are abundant, more oil flows to international markets. During shortages, exports are the first to be curtailed.
How does RSPO certification affect smallholder income?
The financial impact of sustainability certification is one of the industry’s most encouraging stories. For smallholders wondering if certification is worth the investment, the numbers tell a compelling tale.
Research shows certified smallholders in Thailand achieve substantially higher incomes – averaging net returns of 20,776 THB per rai compared to just 13,773 THB for non-certified farmers. That’s a remarkable 51% increase!
This impressive boost comes from several sources:
Better farming practices lead to yield improvements averaging 412 kg more per rai. Buyers often pay premium prices for certified sustainable palm oil. Farmers typically see reduced input costs through more efficient resource use. And certified growers gain better access to technical support and valuable extension services.
Yes, the certification process requires investment – about 1.2 million THB for a typical group of 60-100 smallholders. But given the substantial economic benefits, many farmer groups find the investment pays for itself relatively quickly, making sustainability good for both the planet and their pocketbooks.
Which countries are the fastest-growing markets for Thai palm oil?
While India remains the undisputed giant in Thailand palm oil export destinations (absorbing 97% of exports), several emerging markets show exciting growth potential.
China has emerged as a particularly dynamic market, with refined palm oil exports surging an impressive 370% in 2024. Though starting from a relatively small base, this growth signals promising diversification opportunities.
Kenya now stands as Thailand’s second-largest export market for crude palm oil, showing consistent year-on-year growth and establishing itself as an important beachhead in the African market.
Closer to home, Thailand’s ASEAN neighbors – particularly Lao PDR, Cambodia, and Myanmar – represent naturally advantageous markets due to their proximity, which translates to lower shipping costs and faster delivery times.
The export landscape remains volatile, however. The fastest-growing market gained $2.85 million (2.77%) between 2022 and 2023, while the fastest declining market lost a substantial $425 million (-35.2%) during the same period.
At RUNGTACOLTD, we closely monitor these market shifts to help our partners identify the most promising export opportunities as they emerge. Our experience shipping premium Thai agricultural products internationally gives us valuable insights into these evolving market dynamics.
Conclusion
The journey ahead for Thailand palm oil export is both exciting and challenging. As we at RUNGTACOLTD watch the industry evolve, we’re seeing several important trends that will shape the future of Thai palm oil in global markets.
First and foremost, sustainability is quickly becoming a ticket to entry rather than just a way to earn premium prices. With just 4.6% of Thai plantations currently RSPO-certified, there’s a huge opportunity for growth. Farmers who make this transition aren’t just doing good for the planet – they’re opening doors to markets that increasingly demand environmental responsibility.
Mother Nature will continue to play her part in this story. The expected La Niña conditions in 2025-2026 should bring welcome rainfall to southern Thailand, potentially boosting yields and creating new export opportunities. But we need to stay vigilant, as a possible El Niño return in 2027 could bring drier conditions and production challenges.
Government policy remains the backbone of export success. The thoughtful management of buffer stocks, strategic adjustments to biodiesel blend mandates, and well-timed export promotion subsidies will continue to create the stable foundation that exporters need to thrive in international markets.
Perhaps the most promising path forward is in value addition. Rather than competing solely on price for crude palm oil, Thailand’s future lies in refined products, specialty fats for food manufacturing, and innovative oleochemicals that command higher prices and face less direct competition.
We also need to look beyond India. While this vital trading partner will remain important, developing stronger relationships across emerging Asian economies, African nations with growing populations, and Middle Eastern countries focused on food security will create a more resilient export portfolio.
At RUNGTACOLTD, based in Lampang, we’re proud to be part of Thailand’s agricultural export story. Our commitment to premium quality, international standards, and expert packing for global markets positions us to connect Thai producers with buyers worldwide who value reliability and sustainability.
The future of Thailand palm oil export growth isn’t just about selling more oil – it’s about producing smarter, adding more value, reaching diverse markets, and ensuring that the hundreds of thousands of Thai families who depend on this crop can build sustainable livelihoods. By embracing these priorities, Thailand can strengthen its position as a significant player in global palm oil markets for generations to come.
