More Stories

Informist, Wednesday, Sept. 24, 2025

 

Please click here to read all liners published on this story

--Indonesia palm oil body's Martono:See 2025 output 54 mln tn vs 53 mln 2024
--CONTEXT:Indonesia palm oil body's Martono in interview with Informist
--Indonesia palm oil body Martono:See 2025 palm oil export to India 5 mln tn
--Indonesia palm oil body Martono:To supply 3 mln tn palm seed to India 2025
--Indonesia palm oil body's Hasan: See '25-26 palm oil prices $950-$1,000/tn
--CONTEXT:Indonesia palm oil body's Fadhil Hasan in interview with Informist
--Indonesia palm oil body's Hasan: 50% diesel blend aim hard to meet

 

By Taniva Singha Roy and J. Navya Sruthi

 

MUMBAI – The average price of Indonesian palm oil in 2025-26 (Nov-Oct) is likely to fall to $950-$1,000 per tonne from an estimated over $1,000 per tonne so far this year on the back of an expected increase in production. Lower prices of the commodity and a cut in the import duty in India could, in turn, push up the overall imports of palm oil in India. In a free-wheeling interview with Informist, Indonesia Palm oil Association Head of Foreign Affairs Department Fadhil Hasan and Chairman Eddy Martono speak about increased production and what that means for the country's exports and fuel blending programme, and how will it affect India's edible oil imports.

 

Palm oil imported from Indonesia makes up for over 50% of India's total palm oil import and 25% of the total edible oil import basket. In the first 10 months of the oil year 2024-25 (Nov-Oct), India's import of palm oil from Indonesia rose to 3.1 million tonnes.

 

Currently, prices of palm oil in Indonesia are ruling around $1,042 per tonne. In 2024-25, the palm oil prices globally were higher than other vegetable oils. However, anticipation of higher production owing to better weather conditions is likely to put pressure on prices, Eddy Martono, the chairman of Indonesia Palm oil Association, known by acronym GAPKI, told Informist on the sidelines of the Globoil event. "This year, the production will increase compared with 2024," he said. 

 

 

Further, the initiatives taken by the Indonesian government for replanting palm trees will also lead to a higher output, Martono said. The total production of palm oil is estimated to be around 54 million tonnes in 2025 against 53 million tonne in 2024. Crude palm oil is likely to be around 50 million and palm kernel oil is likely to be around 4 million tonnes, he said. Other associations have estimated Indonesia's palm oil production in the oil year 2024-25 season around 47-53 million tonnes.

 

The association expects India's palm oil imports from Indonesia to touch 5 million tonnes in 2025, higher than 4.8 million tonnes in 2024, due to lower import price. Apart from higher production in Indonesia, the Indian government's move to slash import duty on edible oils has lowered the import price. 

 

On May 30, the Indian government slashed the import duty on major crude edible oils such as soybean, palm, and sunflower oil to 16.5% from 27.5% to help control rising cooking oil prices. The basic customs duty was cut from 20% to 10%, with the reduction also accounting for the agriculture infrastructure and development cess and the social welfare surcharge.

 

In terms of India's ambitious plan of expanding palm oil cultivation, the association said that the Indonesian government has extended support by supplying seeds to India. "The Indonesian government has issued export permit for palm oil seeds. It's around 3 million tonnes seeds, just in 2025," Martono said.

 

India's palm oil cultivation aims to expand the oil palm area to 1.0 million hectares by 2025-26 and achieve crude palm oil production of approximately 1.12 million tonnes. These targets are part of the National Mission on Edible Oils-Oil Palm, launched in 2021 to boost domestic production and reduce import dependence.  

 

DIESEL BLENDING

The association is of the view that Indonesia's plan of blending 40% palm oil with diesel for production of biofuel is not going to create much of a supply crunch as production is likely to be higher. "If at all, exports will be equal to that of 2024, due to the blending mandates, and not less than that," said Fadhil Hasan, the association's head of foreign affairs department.

GAPKI Chairman Martono said the country's palm oil production has been stagnant for quite a while and is not yet supportive for 50% blending of palm oil with fossil fuels. This would delay the government's ambitious plan to achieve B50 by 2026. "The Indonesian government has still not decided yet. So, I think maybe the government still stays in B40," Martono said. 

 

Along with unsupportive production of palm to achieve B50, the country is also facing infrastructure and technical challenges. "...if you go to B50, then you need to ensure that there will be no problems with the engines. Especially in the heavy industries who use a lot of biofuels," Hasan said. 

 

In addition to the technical challenges, there is also a need for an additional investment in biofuel before the country moves to B50, Hasan said. Currently the industry has a capacity of 19.6 million kilolitres and to achieve the B50 target would require 19 million kilolitres of capacity. This leaves minimal buffer and would mean significantly straining existing capacity. 

 

"In addition to that also, I think, there are other things like infrastructure we need to consider," Hasan said. "But we don't know for sure what is going to be decided next year. Whether we go to B50 or stay in B40 or even maybe decrease to B30, we don't know," he said.

 

US TARIFFS
Commenting about the US tariffs, Hasan said the 19% tariff on Indonesian exports to the US is unlikely to have any impact on the palm oil exports to the country. "The level of tariff now between Indonesia and Malaysia is not the same. (US tariff on) Malaysia is around 20%, Indonesia is around 19%." There is still a room for Indonesia and Malaysia to negotiate the level of tariff for products that are not being produced in the US, including palm oil, he added.

 

Martono added that palm oil exports to the US from Indonesia have been increasing and the share of Indonesia palm oil in total US palm oil exports is nearly 89%. "In 2023, export to the US was 2.5 million tonnes, and declined in 2024, probably just a little, 2.2 (million tonnes)...The US needs the palm oil from Indonesia," he said.  End

 

US$1 = INR 88.69

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Akul Nishant Akhoury

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

 

Informist Media Tel +91 (22) 6985-4000  

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2025. All rights reserved.