India, Indonesia Sign Deal To Boost Food Security Through Palm Oil

In a move aimed at strengthening economic ties and ensuring food security, the Indonesian Palm Oil Association (IPOA) and the Indian Vegetable Oil Producers' Association (IVPA) signed a three-year agreement on Thursday. The memorandum marks a step forward in boosting cooperation in the palm oil sector, which forms the cornerstone of oils trade between the two countries.

According to the Solvent Extractors' Association of India (SEA India), India imports more than 60% of its vegetable oil needs, and Indonesia has been its main supplier of palm oil for more than a decade. The agreement covers five key areas to strengthen the relationship between the two sides:

1. Exchange of market information;
2. Policy coordination;
3. Adoption of sustainability initiatives;
4. Technical exchange and research and development;
5. Support for food security measures.

Amid the growing global push towards responsible agriculture, both countries emphasised the importance of boosting production of certified sustainable palm oil and expanding smallholder participation across the wider supply chain.

Trade between India and Indonesia totalled around US$26 billion in 2024, of which US$4 billion related to palm oil and its derivatives. Indonesia is the world's largest palm oil exporter, holding a 58% share of global exports, with its palm oil industry covering more than 16 million hectares (7.4% of the country's total land area).

Ownership of the sector includes a mix of state-owned enterprises, smallholders and private companies, ensuring broad-based economic participation.

Prominent government bodies, including Indonesia's Ministry of Trade and India's Ministry of Commerce and Industry, will work closely together to implement the agreement. This comes as part of initiatives such as the Indonesian Sustainable Palm Oil (ISPO) certification scheme and forest conservation efforts, supporting both countries' national drives to cut carbon emissions and strengthen sustainability standards in oil exports.

A bilateral task force will oversee implementation of the agreement, issuing annual progress reports and ensuring both countries' interests are represented on the international stage.

Commenting on the agreement, Fadhil Hasan, Head of Foreign Affairs at the Indonesian Palm Oil Association, said:

"Today's memorandum of understanding reflects our shared commitment to a transparent, future-ready palm oil supply chain that benefits both consumers and producers alike."

Sudhakar Desai, Chairman of the Indian Vegetable Oil Producers' Association, added:

"We look forward to supporting India's food security and climate goals through a reliable supply of responsibly produced palm oil."

Source: Al Mal Forum