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JAKARTA — Palm oil is projected to satisfy roughly 60 percent of global vegetable oil demand by 2050, reinforcing Indonesia's strategic position as the world's leading producer of the commodity, according to a senior Indonesian industry analyst.
Tungkot Sipayung, Founder and Executive Director of the Palm Oil Agribusiness Strategic Policy Institute (PASPI), said global vegetable oil consumption continues to climb each year, driven by population growth, rising incomes, and accelerating industrialization across the world.
'As the global population grows, palm oil consumption also rises. The world population is projected to exceed 10 billion by 2050, and global demand for palm oil will increase significantly as a result,' Sipayung said in a written statement issued in Jakarta on Monday.
He noted that with the global population expected to reach around 10 billion by mid-century, total vegetable oil demand is forecast to climb to approximately 300 million tons — an increase of nearly 1.4 times the projected 2025 production level of 215.6 million tons.
Beyond its traditional use in food, Sipayung stressed, vegetable oil is increasingly being deployed for biomaterials, as a substitute for petrochemicals, and as an alternative energy source to replace fossil fuels.
He warned that the production capacity of non-palm vegetable oils — including soybean, rapeseed, and sunflower — will face structural constraints due to limited productivity gains and scarce land availability.
'Consequently, meeting global vegetable oil demand relies heavily on palm oil,' he said.
Sipayung laid out the comparative land footprint of major vegetable oil crops. As of 2025, soybean cultivation occupies approximately 143.8 million hectares and contributes 32.8 percent of global vegetable oil production. Rapeseed covers 43.8 million hectares, accounting for 16.5 percent, while sunflower spans around 29.5 million hectares with a 9.3 percent share. By contrast, oil palm cultivation covers only about 29 million hectares — relatively small compared with the other major crops — yet it supplies roughly 41.4 percent of the world's total vegetable oil output.
'It is estimated that by 2050, palm oil will meet around 60 percent of the global demand for vegetable oil,' he stated.
The PASPI chief highlighted several advantages of palm oil in terms of productivity and sustainability compared with other major vegetable oil sources. According to him, palm oil productivity can be eight to ten times higher per hectare, and there remains significant potential to lift output by a further 50 to 100 percent through improved plantation practices and technological innovation.
In contrast, the productivity potential of other vegetable oils has largely plateaued, with the exception of rapeseed (canola), which offers only marginal room for growth — still far below that of palm oil.
Sipayung added that palm oil benefits from a relatively stable year-round supply, competitive pricing, and the significant involvement of smallholder farmers, who account for about 42 percent of the sector. The industry also engages millions of micro, small, and medium-sized enterprises (MSMEs) across the entire supply chain, from upstream to downstream operations.
'Thanks to its competitive pricing, the industry plays a major role in providing affordable vegetable oil to the global population, including low-income groups in various countries. Thus, palm oil is more sustainable economically, socially, and ecologically than other vegetable oils,' he asserted.
Sipayung called for making the enhancement of palm oil productivity a top priority, given that future global vegetable oil demand will increasingly depend on the commodity. He outlined two main strategies: first, lifting overall productivity through replanting programs using superior varieties, combined with improved best plantation practices; and second, raising productivity within existing plantations through the implementation of Good Agricultural Practices, innovation in cultivation and harvesting technology, and enhanced processing efficiency at palm oil mills.
'A combination of these two productivity-enhancing strategies will lead to a doubling of palm oil productivity,' he said.
He noted that the Indonesian government, through the Oil Palm Plantation Fund Management Agency (BPDP), continues to promote palm oil replanting via the Smallholder Palm Oil Replanting Program (PSR) — a key initiative for boosting productivity while safeguarding the sustainability of the national palm oil 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: en.tempo.co