Latin America Oilseed Processing Market Report

Latin America Oilseed Processing Market Size

The Latin American oilseed processing market size was valued at USD 44.98 million in 2024. The global market size is expected to reach USD 48.38 million in 2025 and USD 86.61 million by 2033, with a CAGR of 7.55% during the forecast period.

The Latin America Oilseed Processing Market refers to the industrial transformation of oil-bearing seeds such as soybeans, sunflower seeds, rapeseed (canola), cottonseed, and palm kernels into edible oils, protein-rich meals, and biofuel feedstocks. This market plays a crucial role in supporting regional food security, livestock nutrition, and renewable energy initiatives. The sector encompasses mechanical pressing, solvent extraction, refining, and value addition processes that ensure quality and efficiency in oil production.

Latin America is one of the world’s leading producers of oilseeds, particularly soybeans, with Brazil and Argentina being among the top three global exporters. According to the U.S. Department of Agriculture (USDA), Brazil produced over 150 million metric tons of soybeans in 2023, with a significant portion processed domestically for both internal consumption and export.

In addition, countries like Paraguay and Uruguay have expanded their oilseed processing capacities in recent years, leveraging agricultural exports to fuel economic growth. These developments highlight Latin America's strategic importance within the global agri-food and energy ecosystems.

MARKET DRIVERS

Expansion of Export Markets and Global Demand for Vegetable Oils

One of the major drivers of the Latin America Oilseed Processing Market is the expansion of export markets and growing global demand for vegetable oils, particularly from Asia and Europe. Countries like China and India are increasingly relying on Latin American suppliers for soybean oil, meal, and other oilseed derivatives due to rising domestic consumption and policy-driven import diversification.

According to the Food and Agriculture Organization (FAO), Latin America accounted for nearly 40% of global soybean exports in 2023, with Brazil and Argentina serving as primary sources. The European Union has also intensified its imports of non-palm vegetable oils, favoring sustainably sourced Latin American products amid concerns over tropical deforestation linked to Southeast Asian palm oil.

This surge in international demand has prompted investment in new crushing facilities and port infrastructure to accommodate increased throughput. For example, Cargill and Bunge have expanded their soybean processing plants in southern Brazil and Argentina, enhancing logistics connectivity to global markets.

Apart from these, trade agreements such as Mercosur’s preferential deals with Gulf Cooperation Council (GCC) nations have opened new export corridors, further strengthening Latin America’s position in the global oilseed supply chain.

Growth in Domestic Consumption and Urbanization Trends

Another key driver shaping the Latin America Oilseed Processing Market is the steady rise in domestic consumption, fueled by urbanization, population growth, and shifting dietary habits across the region. As cities expand and middle-class incomes rise, there is an increasing reliance on packaged foods, ready-to-eat meals, and commercial cooking oils, all of which depend heavily on refined vegetable oils derived from locally processed oilseeds.

According to the Economic Commission for Latin America and the Caribbean (ECLAC), urban populations in the region surged, with Brazil, Mexico, and Colombia experiencing some of the fastest rates of urban migration. This demographic shift has led to higher consumption of processed foods, directly boosting demand for soybean, sunflower, and cottonseed oils.

In Brazil, the National Supply Company (CONAB) reported that domestic edible oil consumption grew by nearly 5% in 2023, driven by increased use in restaurants, bakeries, and fast-food chains. Similarly, Argentina’s Ministry of Agroindustry noted an increase in per capita oil consumption, reflecting broader dietary transitions toward convenience-based eating.

Local governments have responded by promoting domestic oilseed production through subsidies and research funding aimed at improving yields and reducing import dependency. These factors collectively contribute to the sustained expansion of the Latin America Oilseed Processing Market beyond its traditional export orientation.

MARKET RESTRAINTS

Climate Variability and Agricultural Production Instability

A significant restraint affecting the Latin America Oilseed Processing Market is the increasing volatility in climate conditions, which disrupts agricultural production cycles and affects oilseed yields. Unpredictable rainfall patterns, prolonged droughts, and extreme temperatures have become more frequent, posing serious risks to staple crops such as soybeans, sunflower, and cottonseed.

For instance, in 2023, Argentina experienced one of the most severe droughts in decades, significantly reducing soybean and sunflower harvests. According to the Buenos Aires Grain Exchange, soybean production dropped compared to the previous year, impacting downstream processing volumes and export commitments.

Similarly, in Brazil, excessive rainfall during critical planting periods affected soybean sowing in several states, including Mato Grosso and Paraná.

These climatic fluctuations not only affect raw material availability but also lead to price instability. Without significant investments in climate-resilient agriculture and irrigation technologies, Latin American oilseed processors will continue to face production uncertainties that hinder long-term market stability.

Regulatory Uncertainty and Trade Policy Volatility

Another major constraint facing the Latin America Oilseed Processing Market is the inconsistent regulatory environment and frequent changes in trade policies across key producing countries. Governments in the region often implement export taxes, import restrictions, and subsidy adjustments in response to domestic inflationary pressures or political shifts, creating uncertainty for investors and market participants.

In Argentina, for example, the government introduced fluctuating export duties on soybean oil and meal in 2023, aiming to control domestic prices and stabilize food inflation.

Brazil has also faced regulatory challenges, particularly regarding environmental licensing for new processing units and transportation infrastructure.

Moreover, geopolitical tensions and shifting trade alliances have impacted market access for Latin American oilseed products. The European Union’s Renewable Energy Directive II (RED II) imposed stricter sustainability criteria on imported biodiesel, affecting Argentina’s ability to export soybean-based methyl esters to European markets. These policy inconsistencies complicate planning for oilseed processors and deter foreign direct investment, ultimately slowing down the sector’s modernization and expansion efforts across Latin America.

MARKET OPPORTUNITIES

Integration with Circular Economy and By-Product Valorization Initiatives

An emerging opportunity in the Latin America Oilseed Processing Market lies in the integration of circular economy principles and the valorization of co-products generated during oil extraction. Traditionally considered waste materials, by-products such as oilseed meal, husks, and glycerin are now being repurposed into high-value inputs for industries including livestock feed, organic fertilizers, biochemicals, and biogas.

In addition, palm oil processors in Colombia have adopted similar strategies, extracting residual fibers and empty fruit bunches for bioenergy generation. Companies like Bioenergy Colombia and Grupo Palmas have invested in biogas plants that utilize oil mill effluent to generate renewable electricity, reducing operational costs and carbon footprints. With increasing corporate ESG commitments and regulatory incentives favoring sustainable practices, oilseed processors embracing circular economy models are well-positioned to capture long-term value in a rapidly evolving market landscape across Latin America.

Expansion of Plant-Based Protein Demand and Alternative Feed Ingredients

Another promising opportunity in the Latin America Oilseed Processing Market is the growing demand for plant-based proteins and alternative feed ingredients, driven by health consciousness, ethical consumption trends, and the need for sustainable livestock nutrition. Soybean meal, sunflower cake, and cottonseed meal are increasingly being used not only in traditional animal feed but also in novel plant-based protein formulations for human consumption.

Companies such as JBS S.A., the world’s largest meat processor, have launched plant-based product lines using soy and pea protein blends, expanding their market reach and aligning with global sustainability goals.

In Argentina, the Ministry of Science, Technology, and Innovation funded research into new protein extraction methods using sunflower biomass, aiming to develop cost-effective alternatives to soy-based proteins. Similarly, in Brazil, Embrapa initiated collaborations with private firms to enhance the nutritional profile of cottonseed meal for use in poultry and swine diets. Oilseed processors that integrate downstream protein separation technologies stand to benefit from this growing market.

MARKET CHALLENGES

Fragmented Supply Chains and Logistics Bottlenecks

One of the foremost challenges confronting the Latin America Oilseed Processing Market is the fragmentation of supply chains and persistent logistical bottlenecks that hinder the efficient movement of raw materials and finished products. Unlike North America and Europe, where integrated agricultural networks support streamlined procurement and distribution, many Latin American countries suffer from inadequate transportation infrastructure, outdated storage facilities, and bureaucratic inefficiencies.

According to the World Bank’s Logistics Performance Index (LPI) 2023, Brazil ranked below several developing economies in terms of customs efficiency, infrastructure quality, and shipment reliability. This inconsistency affects oilseed processors reliant on timely deliveries of soybeans and other oilseeds, particularly in remote farming regions where road connectivity is poor.

Besides, the lack of standardized storage and handling protocols across rural collection centers leads to post-harvest losses and quality degradation of oilseeds before reaching processing units.

To mitigate these issues, processors must invest in digital supply chain solutions, warehouse modernization, and last-mile connectivity improvements.

Technological Disparity and Lack of Skilled Workforce

Another critical challenge impeding the growth of the Latin America Oilseed Processing Market is the technological disparity between multinational corporations and local enterprises, compounded by a shortage of skilled labor in the sector. While large players such as Cargill, ADM, and Bunge operate highly automated, energy-efficient refineries equipped with AI-driven process optimization tools, many regional and independent processors continue to rely on outdated machinery and manual operations.

The situation is exacerbated by insufficient vocational training programs focused on modern oilseed processing techniques, leaving a skills gap that limits productivity and innovation.

Without targeted interventions in workforce development and technology transfer, many Latin American oilseed processors risk falling behind in competitiveness, efficiency, and compliance with global quality standards.

REPORT COVERAGE

SEGMENTAL ANALYSIS

By Type Insights

Soybean was the largest segment in the Latin America Oilseed Processing Market, accounting for approximately 68% of total processed oilseeds by volume in 2024. Brazil and Argentina are the primary contributors to this dominance, with both countries collectively producing over 170 million metric tons of soybeans annually, as reported by the U.S. Department of Agriculture (USDA).

The overwhelming presence of soybean in the region stems from its dual utility as a source of high-protein animal feed and edible oil. According to the Food and Agriculture Organization (FAO), soybean meal constitutes nearly 75% of global protein feed demand, making it indispensable in livestock and aquaculture sectors across Latin America.

Another major driver is the growing biodiesel industry, particularly in Argentina and Brazil, where soybean oil serves as a preferred feedstock due to its availability and regulatory support.

Additionally, soybean processing aligns well with export-oriented agribusiness models. These factors—high yield potential, diversified applications, and strong international demand—collectively underpin soybean’s entrenched leadership in the Latin American oilseed market.

Sunflower seed is emerging as the fastest-growing oilseed segment in Latin America, projected to expand at a CAGR of 5.9%. Argentina remains the regional leader in sunflower production and processing, followed by smaller contributions from Paraguay and Uruguay.

According to the National Institute of Agricultural Technology (INTA) in Argentina, domestic sunflower cultivation expanded by 8% in 2023 compared to the previous year, driven by improved hybrid varieties and favorable government incentives for oilseed diversification. This has led to increased investment in crushing facilities, particularly in the Pampas region.

One key driver of this growth is the rising consumer preference for healthier oils with lower saturated fat content. Moreover, the renewable energy sector is leveraging sunflower oil for biodiesel applications. In Argentina, state-backed biofuel programs incorporated sunflower-based methyl esters into blending mandates, enhancing feedstock diversification efforts.With continued emphasis on health benefits, sustainability, and import diversification, the sunflower oil segment is poised for sustained growth across Latin America.

By Process Insights

Chemical processing commanded the Latin America Oilseed Processing Market, capturing a 62.5% of total processing volume in 2024. This method involves solvent extraction using hexane to maximize oil yield, followed by refining, bleaching, and deodorization steps to produce high-purity oils suitable for commercial food and industrial applications.

A primary factor behind its dominance is efficiency gains in high-volume production environments. In 2023, biodiesel refiners in Argentina sourced over 60% of their feedstock from chemically extracted soybean oil, aligning with national blending mandates.

Moreover, advancements in solvent recovery systems and environmental controls have mitigated earlier concerns about emissions.

Mechanical processing is the fastest-growing segment in the Latin America Oilseed Processing Market, expanding at a CAGR of 4.7% through 2033. This method, which includes expeller pressing and cold-pressing techniques, is increasingly favored in niche markets that prioritize natural, unrefined, and organic oils.

Countries like Brazil and Peru have also witnessed a surge in demand for cold-pressed sesame and sunflower oils, which are marketed for their purported health benefits and minimal processing.

A primary factor behind its rapid growth is the rising popularity of organic and specialty oils among health-conscious consumers. Additionally, small-scale rural enterprises are adopting decentralized mechanical oil mills to enhance local value addition and reduce dependency on large refineries. With increasing awareness around food traceability and natural ingredients, mechanical processing is gaining momentum as a viable alternative to conventional refining, especially among premium and regional oil producers.

By Application Insights

Food application was the largest segment in the Latin America Oilseed Processing Market, accounting for 52.7% of total processed output in 2024. The demand for edible oils derived from soybean, sunflower, cottonseed, and palm remains robust across both household and commercial cooking sectors.

In Brazil alone, the National Supply Company (CONAB) reported that edible oil consumption reached 4.2 million metric tons in 2023, driven by population growth, urbanization, and changing dietary habits.

One key driver of this dominance is the widespread reliance on refined vegetable oils for frying, baking, and food preparation. Moreover, the expansion of the packaged food and restaurant industries has further intensified demand. Government policies also play a role. In Colombia, mandatory fortification programs have increased the adoption of fortified soybean oil in mass-produced foods, reinforcing its position in the food application segment. These combined factors ensure the continued supremacy of food-grade oilseed derivatives in the regional market.

Industrial applications are the fastest-growing segment in the Latin America Oilseed Processing Market, expanding at a CAGR of 6.3%. This category encompasses uses such as bio-lubricants, surfactants, coatings, and biodegradable polymers derived from oilseed-based triglycerides and fatty acids.

Companies like BASF, Arkema, and Oleon are increasingly incorporating oilseed derivatives into green chemistry solutions to replace petroleum-based compounds.

A key driver of this growth is the tightening of environmental regulations aimed at reducing carbon footprints and hazardous waste. In Brazil, the Ministry of Environment mandated in 2023 that federal agencies prioritize the procurement of biobased lubricants and hydraulic fluids, directly boosting demand for industrial-grade vegetable oils.

Additionally, the rise of sustainable aviation fuels (SAFs) and renewable diesel has spurred interest in oilseed-derived feedstocks. With growing corporate ESG commitments and regulatory incentives, industrial applications of oilseed derivatives are expected to maintain their rapid growth trajectory across the Latin American region.

REGIONAL ANALYSIS

Brazil

Brazil led the Latin America Oilseed Processing Market with a dominant share of 48.7% in 2024. As the world’s largest producer and exporter of soybeans, the country plays a central role in shaping regional and global oilseed dynamics.

Major agribusiness firms including Cargill, Bunge, and ADM operate extensive processing networks that supply both domestic and international markets with edible oils, protein meals, and biodiesel feedstocks. Government policies, including strategic infrastructure investments and tax incentives for biodiesel production, continue to bolster demand for soybean oil. Additionally, the expansion of plant-based protein markets has reinforced the need for high-quality soybean meal. With ongoing investments in refining infrastructure and sustainability initiatives, Brazil continues to dominate the Latin American oilseed processing landscape.

Argentina

Argentina is a key player in the market. The country is globally recognized as one of the top exporters of soybean oil and meal, with a well-developed crushing industry concentrated in the Rosario grains hub.

The country’s oilseed sector plays a crucial role in generating foreign exchange earnings. A key driver of Argentina's strong position is its deep integration into global agri-commodity markets. The nation supplies significant volumes of soybean oil and meal to Europe, China, and Southeast Asia, benefiting from well-established logistics and port infrastructure along the Paraná River.

However, economic volatility and fluctuating export taxes remain challenges. Despite these uncertainties, Argentina’s expertise in oilseed processing and strategic location make it a pivotal player in the Latin American market.

Mexico

Mexico is playing a vital role in North-South trade flows and domestic consumption. Unlike Brazil and Argentina, Mexico does not produce large volumes of oilseeds but relies heavily on imports of soybeans and cottonseed oil from the United States and Brazil.

Domestic refining capacity is concentrated in coastal regions, facilitating efficient distribution to major urban centers.

A notable trend is the government’s push toward self-sufficiency in edible oils. Additionally, Mexico’s proximity to the U.S. allows for seamless integration into North American supply chains.

Chile

Chile holds a modest share of the Latin America Oilseed Processing Market, distinguished by its focus on high-quality edible oils and specialty fats. While not a major oilseed producer, Chile imports substantial quantities of soybean and sunflower oil to meet domestic demand, particularly in urban areas.

The country’s stringent food safety regulations and preference for non-GMO ingredients have shaped processing practices, encouraging domestic refiners to invest in premium filtration and refining technologies.

A key trend driving the market is the growing demand for imported oils in the foodservice and convenience food sectors. Besides, Chile’s renewable energy strategy includes limited biodiesel production using imported rapeseed oil. With increasing interest in green shipping fuels derived from oilseed esters, Chile presents a potential future growth area for Latin American processors.

Rest of Latin America

The Rest of Latin America, comprising Colombia, Peru, Ecuador, Bolivia, Paraguay, and Central American territories, holds a modest share of the regional oilseed processing market. While not major producers like Brazil or Argentina, these countries contribute to the market through localized processing and niche product development.

Peru and Ecuador have seen rising demand for specialty oils, particularly cold-pressed and organic varieties, aligning with consumer preferences for clean-label products. These developments indicate that while smaller in scale, the Rest of Latin America remains a dynamic and evolving component of the broader oilseed processing landscape.

KEY MARKET PLAYERS AND COMPETITIVE LANDSCAPE

Archer Daniels Midland Company, Bunge Limited, Cargill, Wilmar International Ltd., Richardson International Limited, Louis Dreyfus Company B.V., CHS Inc., Ag Processing Inc., ITOCHU Corporation, and EFKO GROUP are the key players in the Latin America Oilseed Processing Market.

The competition in the Latin America Oilseed Processing Market is marked by a blend of multinational corporations, national agribusiness giants, and numerous regional players vying for market share across a highly fragmented yet rapidly evolving industry. Large-scale processors dominate the landscape, leveraging economies of scale, advanced technologies, and vertically integrated operations to maintain operational efficiency and cost competitiveness. These firms benefit from strong supply chain networks, access to capital, and established relationships with global trading partners, giving them an edge over smaller competitors.

However, mid-sized and independent processors continue to play a significant role, particularly in niche segments such as organic oils, cold-pressed varieties, and specialty proteins that cater to specific consumer preferences and regional tastes. In response to shifting dietary habits and increasing health awareness, many companies are innovating their product portfolios to include fortified oils, low-saturated-fat alternatives, and plant-based protein derivatives.

Strategic acquisitions, joint ventures, and investments in digital transformation are frequently used tools to expand capabilities and geographic reach. Additionally, companies are aligning their operations with environmental, social, and governance (ESG) goals to appeal to conscious consumers and institutional investors alike. The interplay between these factors creates a dynamic yet fiercely competitive environment, where technological advancement and supply chain resilience are key differentiators among market participants.

TOP PLAYERS IN THE LATIN AMERICA OILSEED PROCESSING MARKET

Cargill Incorporated

Cargill is a dominant force in the Latin America Oilseed Processing Market, with a vast footprint across soybean and sunflower processing. The company operates numerous crushing and refining facilities in Brazil and Argentina, two of the largest oilseed-producing nations in the region. Cargill plays a crucial role in global trade flows by supplying refined oils, protein meals, and biofuel feedstocks to international markets. Its vertically integrated model ensures control over sourcing, logistics, and end-user distribution, allowing it to respond efficiently to market demands. The company also invests heavily in sustainability and digital transformation, reinforcing its leadership position not only in Latin America but also in the broader global agri-processing industry.

Bunge Limited

Bunge has a long-standing presence in the Latin American oilseed sector, playing a pivotal role in transforming raw commodities into essential food and energy products. The company's operations span oilseed crushing, refining, and packaging, serving diverse sectors including food manufacturing, livestock feed, and renewable fuels. Bunge leverages its deep market insights and logistical expertise to maintain competitiveness in a dynamic industry. Through continuous investment in infrastructure and technology upgrades, Bunge strengthens its position as a key contributor to both regional and global oilseed markets. The firm’s strategic alignment with environmental and social governance goals further enhances its reputation among investors and consumers alike.

ADM (Archer Daniels Midland Company)

ADM is a global leader in agricultural processing and one of the most influential players in the Latin America Oilseed Processing Market. The company operates an extensive network of oilseed crushing and refining facilities across Brazil and Argentina, handling soybeans and sunflower seeds at industrial scale. ADM plays a crucial role in supplying edible oils, protein meals, and biofuel feedstocks to both domestic and international markets. Its vertically integrated model ensures control over sourcing, processing, and distribution, allowing it to respond efficiently to market demands. The company also invests heavily in innovation, particularly in sustainable extraction methods and value-added products, reinforcing its leadership position in the global agri-processing industry.

TOP STRATEGIES USED BY KEY MARKET PLAYERS

One of the primary strategies adopted by key players in the Latin America Oilseed Processing Market is vertical integration , allowing companies to control multiple stages of the supply chain—from raw material sourcing and processing to logistics and end-user distribution. This approach enhances cost efficiency, ensures consistent supply, and mitigates risks associated with fluctuating commodity prices.

Another critical strategy is investment in sustainable and traceable sourcing practices , as companies aim to meet growing consumer and regulatory demands for environmentally responsible production. Leading firms are increasingly adopting certified sustainable oilseed programs and investing in regenerative agriculture to secure long-term market access and enhance brand reputation.

Lastly, expansion into high-growth regional markets and downstream diversification is a key focus area. Companies are forming strategic alliances, acquiring local processors, and launching specialty oil and protein-based products tailored to emerging dietary trends, thereby reinforcing their competitive edge in the dynamic Latin American landscape.

RECENT HAPPENINGS IN THE MARKET

• In January 2023, Cargill announced the expansion of its soybean crushing facility in Mato Grosso, Brazil, aiming to increase capacity and meet rising demand for biodiesel feedstock.
• In May 2023, Bunge launched a new line of sustainably sourced sunflower oil in Argentina, emphasizing improved environmental credentials and non-GMO certification to appeal to health-conscious consumers.
• In September 2023, ADM partnered with a Brazilian biotech firm to develop enzymatic oil refining processes that reduce chemical usage and improve sustainability in large-scale processing plants.
• In February 2024, Cargill acquired a stake in a Chilean startup specializing in AI-driven supply chain analytics, enhancing its logistics optimization capabilities across Latin America.
• In August 2024, Bunge entered into a joint venture with an Argentine biofuel producer to co-develop advanced biodiesel blends using locally processed soybean oil, strengthening its position in the renewable fuels sector.

MARKET SEGMENTATION

This research report on the Latin America oilseed processing market is segmented and sub-segmented into the following categories.

By Type

• Introduction
• Soybean
• Rapeseed
• Sunflower
• Cottonseed

By Process

• Introduction
• Mechanical
• Chemical

By Application

• Introduction
• Food
• Feed
• Industrial

By Country

• Brazil
• Argentina
• Mexico
• Rest of Latin America