Indonesia Urges India To Adopt Predictable Palm Oil Import Policy

Indonesia has called on India to adopt a predictable palm oil import policy to ensure trade stability amid climate volatility and shifting regulations. Jakarta stressed the need for transparency in stock management and import-export rules to avoid market disruptions.

Indonesia, the world's largest producer and exporter of crude palm oil (CPO), called on Wednesday for a "predictable policy" regarding cooking oil shipments to India.

Ina Hagniningtyas Krisnamurthi, Indonesia's ambassador to India, said:

"We are two large countries in terms of population and we have huge domestic markets, so we need a predictable policy that takes supply and demand issues into account."

She added that a degree of openness is needed in understanding each government's stock management policies, stressing:

"We hope that predictable policies, or policies that provide certainty, will not hinder trade."

Given recurring climate changes, the ambassador acknowledged that both sides may need to impose different policies depending on weather and production conditions, referring to the import duties imposed by India and the export restrictions imposed by Indonesia.

On 30 May, India cut the effective duty on imports of three types of vegetable oils, including the basic customs duty and additional cess, from 27.5% to 16.5%, after having raised it last September to curb price rises.

For its part, Indonesia has raised crude palm oil export levies from 7.5% to 10% since May 2025 to fund its biodiesel programme and palm replanting initiative.

In April 2022, Indonesia imposed a temporary ban on palm oil exports, causing major disruptions to global supplies and driving up cooking oil prices.

Figures And Trade

• India imported more than 4.83 million tonnes of crude and refined palm oil from Indonesia during the 2023–2024 oil year (November to October), accounting for more than 55% of its total imports.
• India's total imports of cooking oils (palm, soybean and sunflower) in 2023-2024 stood at around 15.96 million tonnes, valued at 1.32 trillion rupees.
• In the 2024-2025 oil year (November to May), vegetable oil imports fell by 9% to 7.88 million tonnes compared with the same period the previous year.

The Indonesian ambassador stressed that demand for oils rises during religious months and seasons such as Ramadan and Christmas, prompting countries to adjust their trade policies to meet domestic needs.

Krisnamurthi concluded by saying:

"Indonesia truly hopes that dialogue between the two countries on predictable policies will continue."

The Future Of Palm Oil Production

• Indonesia's palm oil production is expected to rise to 47 million tonnes in 2025.
• Indonesia aims to export 25 million tonnes of this output.
• 2 million tonnes will be used under the B40 biodiesel programme, which blends 40% palm oil with diesel.

In 2024, the main importers of Indonesian palm oil were: India, China, Pakistan, Bangladesh, the United States and Egypt.

India imports about 58% of its vegetable oil consumption from countries such as Indonesia, Malaysia, Thailand, Ukraine, Russia and Argentina, while producing oils such as mustard, soybean and groundnut domestically.

Source: Al Mal Forum