Indonesia to cut palm oil exports: ‘Palm oil is no longer a cheap vegetable oil’ – expert

Indonesia is projected to see a decrease in palm oil exports in the next few years due to aging trees and mandatory additives in biodiesel, with exports expected to drop by 6.9% in 2025. The country's production has plateaued, and domestic demand is rising, further limiting exports. This is expected to drive up global palm oil prices, potentially making it less competitive as a vegetable oil and pushing buyers towards cheaper alternatives.

Indonesia is expected to export 27.5 million tonnes of palm oil in 2025, down 6.9% from last year, the largest palm oil group, the Indonesia Palm Oil Association (GAPKI), said on Thursday. The world’s largest exporter of the commodity is struggling to ramp up production of the versatile vegetable oil as its trees age, while it expands mandatory palm oil additives in biodiesel. The decline will continue at an 8.3% rate in 2024, when Indonesia exported 29.54 million tonnes of palm oil products, according to GAPKI. A modest increase in Indonesia’s output in 2025, coupled with rising domestic demand, is expected to dampen export prospects, association spokesman Hadi Sugeng told reporters. “Exports tend to fall year on year, unlike domestic consumption,” Hadi added. “At the same time, our production is so-so.” GAPKI estimates that total palm oil production this year will be 53.63 million tonnes, including about 48.98 million tonnes of crude palm oil, only slightly up from last ...