Lang
Indonesia is expected to export 27.5 million tonnes of palm oil in 2025, down 6.9% from last year, according to the Indonesian Palm Oil Association (GAPKI), the country's largest producer group.
The world's top exporter of the commodity is struggling to boost output of the versatile vegetable oil due to ageing palm trees, even as the Indonesian government expands mandatory palm oil use in biodiesel production.
According to GAPKI, exports already fell 8.3% during 2024, with Indonesia's palm oil product shipments totalling 29.54 million tonnes.
GAPKI spokesman Hadi Sugeng told reporters that the slight increase expected in Indonesia's 2025 production, combined with rising domestic demand, would weigh on export prospects.
"Exports are trending downward year on year, in contrast to domestic consumption," Hadi said, noting that production is not at its best.
GAPKI estimates total palm oil production this year will reach 53.63 million tonnes, including around 48.98 million tonnes of crude palm oil, a slight increase on last year.
Indonesia is expected to have produced 48.16 million tonnes of crude palm oil in 2024, with reserves standing at 2.58 million tonnes by year-end, according to GAPKI.
Export restrictions have pushed up palm oil prices on global markets, which GAPKI warned could erode the product's competitiveness against other vegetable oils.
"Palm oil is no longer a cheap vegetable oil," Hadi said, explaining that it is often now pricier than other vegetable oils, prompting importers, particularly in India, to buy cheaper alternatives.