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The United States Department of Agriculture (USDA) has indicated that the Indonesian government's newly introduced export centralization policy is highly likely to affect US buyers of palm oil. This policy, described as a 'single-gate' export system for strategic commodities, was announced by President Prabowo on May 20, aiming to curb various practices that have historically led to significant state revenue losses.
In early June, the Indonesian Ministry of Trade (MOT) issued Regulation 16/2026, a measure designed to enhance trade transparency and prevent revenue leakage from exports, as detailed in an 18 June Foreign Agriculture Service (FAS) report. The regulation specifically lists palm oil products, including crude palm oil (CPO), refined palm oil, refined palm olein, used cooking oil (UCO), and palm residual products, as commodities that must be exported through this new system.
Managed by a new state-owned entity, Danantara Sumberdaya Indonesia (DSI), the system commenced its phased introduction on June 1, with full operational capacity targeted for January 1, 2027. During this transition period, while exporters are still permitted to conduct overseas sales independently, they are mandated to report all export activities to DSI. The Indonesian government plans to evaluate the policy's effectiveness after its initial three months of implementation before advancing to subsequent phases.
In 2025, the USA was the fifth-largest importer of Indonesian palm oil. However, despite this ranking, Indonesian palm oil exports to the USA amounted to 1.3 million tonnes last year, marking the lowest volume recorded since 2021. Furthermore, 2026 saw no shipments of used cooking oil from Indonesia to the USA, a stark contrast to the 10,000-112,000 tonnes per year exported between 2023 and 2025. Similarly, there have been no palm residue exports from Indonesia to the USA since 2023, according to the USDA report.
Given Indonesia's pivotal role as the world's leading palm oil producer, accounting for over half of global shipments, the USDA has affirmed its commitment to continuously monitor the ramifications of this significant policy shift on international markets.
Source: Oils & Fats International