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View all search resultsDomestic palm oil consumption surges as exports decline
A webinar on Monday discussed some of the challenges facing the palm oil industry in the country, which was now the world's largest producer and consumer of the commodity.
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A worker hauls fresh fruit bunches in Riau’s provincial capital Pekanbaru on April 27, 2022, for loading and transporting to crude palm oil factories. (Reuters/Willy Kurniawan)
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lmost half of Indonesia’s crude palm oil (CPO) output is now absorbed by the domestic market, as CPO consumption rose to 23.8 million tonnes in 2024 while production fell to 52.7 million tonnes, down from 54.8 million tonnes in 2023, according to the Indonesian Palm Oil Producers Association (GAPKI).
“The biodiesel mandate is driving up domestic use, with food consumption followed by energy or biodiesel demand,” GAPKI chairman Eddy Martono said on Monday.
Speaking during a webinar hosted by the Institute for Development of Economics and Finance (INDEF), Eddy added that Indonesia was the world’s largest producer as well as consumer of CPO, accounting for 57 percent of global output and 27 percent of global use.
He also acknowledged production challenges, such as land conflicts and the need to rejuvenate smallholder plantations with new plants, but stressed the priority was supplying local biodiesel and food industries.
Eddy continued that CPO prices were expected to remain strong through the end of 2025 at an estimated range of US$1,100-1,200 per tonne, with a potential to reach a spot price of $1,300 on CIF Rotterdam.
“Global vegetable oil demand continues to rise while production in Indonesia and Malaysia has stagnated, supporting high prices,” he said.
Read also: Strengthening legal certainty in the palm oil industry
