Lang
The Indonesian Palm Oil Association (GAPKI) has forecast that domestic palm oil production will see only a modest increase of around 3% this year.
GAPKI Executive Director Mukti Sardjono said growth in palm oil output would remain almost stagnant compared with the continuing rise in domestic and global demand for vegetable oils. "We see our palm oil production continuing to grow this year, but not significantly — perhaps in the range of 2 to 3%, while demand keeps rising at a faster pace," he said, speaking in Jakarta on Wednesday, 23 April 2025.
Mukti explained that lifting domestic palm oil output to double-digit growth rates remains a difficult task. "Among the factors hindering increased production is the slow pace of smallholder replanting programmes, which have consistently fallen short of the annual target of around 150,000 to 180,000 hectares," he said.
GAPKI noted that legal uncertainty and a challenging business environment in Indonesia's palm oil sector are hampering efforts to boost production. This legal ambiguity stems from the large number of overlapping government ministries and agencies involved in managing the sector.
According to GAPKI data, 37 different bodies are involved in regulating Indonesia's palm oil industry, including certification procedures that also require the involvement of multiple ministries and agencies. Mukti stressed: "Regulations governing the palm oil industry should be issued through a single, integrated body. Regulations must not be conflicting, but rather coordinated under one unified umbrella. This is essential for the growth of the palm oil industry and for our economy's growth."
Over the past six years, palm oil production has remained relatively stable at around 52 to 55 million tonnes annually, while domestic consumption has continued to climb.
GAPKI data show that the share of domestic consumption rose from 33.63% of total production in 2020 to 42.32% in 2023, and then to 45.22% in 2024.
The use of palm oil for biodiesel production has contributed to the rise in domestic consumption, with biodiesel consumption reaching 11.44 million tonnes in 2024, surpassing palm oil consumption for food purposes, which stood at 10.2 million tonnes in the same year.
Total domestic consumption of palm oil reached 23.85 million tonnes in 2024, while total production over the past five years has ranged between 51.2 and 54.8 million tonnes.
In 2024 alone, total palm oil production reached 52.76 million tonnes, comprising 4.59 million tonnes of palm kernel oil (PKO) and 48.16 million tonnes of crude palm oil (CPO).
Source: Al Mal Forum