19 September 2025 (closed)
Jakarta Composite Index (8,051.12) +42.69 +0.53%
Waspadalah terhadap penipu yang aktif di WA mengatasnamakan Indonesia Investments
Palm Oil Industry of Indonesia: Top Export Markets Are India and China
Palm oil has been a crucial commodity for the Indonesian economy over the last couple of decades. The palm oil sector generates significant jobs, incomes, corporate revenues, tax revenues, and foreign exchange earnings that facilitate social and economic development (although there is also a price to pay in the form of the environment).
Indonesia's Palm Oil Exports
Indonesia exported USD $22.9 billion worth of palm oil in 2024 (excluding palm kernel oil), which was a 8.8 percent year-on-year (y/y) decline compared to palm oil shipments one year earlier. This decline is related to the 15.3 percent (y/y) contraction in palm oil export volumes over the same period (see Table 2 at the bottom of the page).
Mukti Sardjono, Director of the Indonesian Palm Oil Association (Gapki), said that exports of all types of palm oil products contracted in 2024, with the exception of oleochemicals.
A couple of factors are believed to be behind this contraction in Indonesia's palm oil export performance. Firstly, domestic consumption of palm oil has increased on the back of Indonesia's biodiesel program. The implementation of the B35 program (a biodiesel blend containing 35 percent palm oil) nationwide in 2023 and the move toward the B40 program in early 2025 significantly increased domestic demand for palm oil. This curtails room for exports.
Secondly, production of palm oil contracted in Indonesia. Data show that Indonesia produced 48.16 million tons of palm oil (and 4.59 million tons of palm kernel oil) in 2024, which is less than the 50.07 million tons of palm oil (and 4.77 million tons of palm kernel oil) that were produced one year earlier. One of the problems being the El Nino weather phenomenon in 2023 (that brought prolonged dry weather to Southeast Asia).
Thirdly, top palm oil buyers India and China showed reduced demand for Indonesian palm oil in 2024, partly due to those countries having high stocks of palm oil from previous years and a shift in demand towards other, more competitively priced vegetable oils like sunflower and soybean oil.
Lastly, while Indonesia made adjustments to its export levies in September 2024 to simplify them, the taxes and levies remained high for much of the year. This made Indonesian palm oil less competitive on the global market, further contributing to the decline in export volume.
Top Buyers Are India and China
It is interesting to take a quick look at palm oil shipments to China and India. Together, both countries received 32 percent of Indonesia's total palm oil shipments in 2024, and are therefore the top buyers.
What is interesting when we look at Table 1 is that India and China still absorbed 41.6 percent of total Indonesian palm oil exports in 2012, implying that Indonesia has become less dependent on these two countries. This is a positive development. Particularly India can show volatility in terms of palm oil demand due to sudden changes in import policies, while the country is also busy developing domestic oil palm plantations, and may therefore be eager to curb imports of foreign palm oil in the future.
Table 1; Indonesia's Palm Oil Exports to India and China (in billion USD):
| 2012 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | |
| India | 5.04 | 2.30 | 3.04 | 3.36 | 5.32 | 4.52 | 3.92 |
| China | 3.01 | 3.14 | 2.93 | 5.00 | 4.54 | 4.67 | 3.40 |
| Total* | 19.34 | 16.15 | 18.89 | 29.25 | 30.94 | 25.07 | 22.90 |
* All export markets combined
These figures exclude palm kernel oil
Source: Badan Pusat Statistik (BPS)
Table 2; Indonesia's Palm Oil Exports to India and China (in million tons):
| 2012 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | |
| India | 5.46 | 4.65 | 4.63 | 3.10 | 5.00 | 5.41 | 4.29 |
| China | 3.25 | 5.98 | 4.48 | 4.86 | 4.28 | 5.44 | 3.59 |
| Total | 20.52 | 30.38 | 27.84 | 27.57 | 27.18 | 28.63 | 24.25 |
* All export markets combined
These figures exclude palm kernel oil
Source: Badan Pusat Statistik (BPS)
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