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Palm oil is on track to satisfy approximately 60 percent of the world's vegetable oil requirements by 2050, according to projections from Indonesia's Palm Oil Agribusiness Strategic Policy Institute (PASPI), a shift that would further entrench the country's strategic role in global agricultural commodity supply chains.
Tungkot Sipayung, Founder and Executive Director of PASPI, said global vegetable oil demand is climbing steadily, fueled by population growth, rising incomes, and accelerating industrialization. 'As the global population grows, palm oil consumption also rises. With the world population projected to exceed 10 billion by 2050, global demand for palm oil will increase significantly,' he said in a written statement from Jakarta on Tuesday.
Sipayung noted that with the global population expected to reach around 10 billion, total vegetable oil demand could approach 300 million tons by 2050, an increase of nearly 1.4 times the projected 2025 output of 215.6 million tons.
Beyond food applications, vegetable oils are increasingly being channeled into biomaterials, used as substitutes for petrochemicals, and deployed as renewable alternatives to fossil fuels, Sipayung added.
He warned that competing vegetable oil sources, principally soybean, rapeseed, and sunflower, will face structural constraints going forward, with limited room to expand productivity and limited access to new arable land. 'Consequently, meeting global vegetable oil demand relies heavily on palm oil,' he said.
According to 2025 data, soybean cultivation spans about 143.8 million hectares and accounts for 32.8 percent of global vegetable oil output. Rapeseed covers 43.8 million hectares (16.5 percent), while sunflower occupies roughly 29.5 million hectares (9.3 percent). Despite occupying only around 29 million hectares, oil palm delivers approximately 41.4 percent of the world's total vegetable oil production.
'It is estimated that by 2050, palm oil will meet around 60 percent of the global demand for vegetable oil,' Sipayung said.
He underscored several competitive advantages of palm oil. Productivity per hectare can run eight to ten times higher than competing oils, and there remains headroom of 50 to 100 percent to lift yields further through better plantation management and technology adoption. Other vegetable oils, he noted, have largely hit a productivity ceiling, with only rapeseed (canola) offering marginal upside, nowhere near palm oil's potential.
Additional strengths include year-round supply stability, competitive pricing, and a robust smallholder base, with smallholders accounting for roughly 42 percent of the sector. The downstream chain also supports millions of micro, small, and medium-sized enterprises, helping keep vegetable oil affordable in low-income markets.
'Thus, palm oil is more sustainable, economically, socially, and ecologically, than other vegetable oils,' he asserted.
Sipayung argued that lifting palm oil productivity should become a strategic priority, given the commodity's rising share of global vegetable oil consumption. He outlined two parallel strategies. The first focuses on raising overall productivity through replanting programs using superior planting material and adopting best management practices. The second targets existing plantations, deploying Good Agricultural Practices (GAP), innovation in cultivation and harvesting, and improved efficiency at palm oil mills.
'A combination of these two productivity-enhancing strategies will lead to a doubling of palm oil productivity,' he said.
Indonesia's Oil Palm Plantation Fund Management Agency (BPDP) has continued to support replanting through the Smallholder Palm Oil Replanting Program (PSR), which the institute views as central to lifting yields and reinforcing the sustainability of the national industry.
'With such productivity gains, Indonesia and other global palm oil producers will be able to supply palm oil to meet the needs of the global population,' Sipayung concluded.
Source: Tempo.co