PALMOILMAGAZINE, YOGYAKARTA — The Indonesian Palm Oil Association (GAPKI) has underlined the strategic role of the palm oil industry in sustaining Indonesia’s economy, while urging stronger technological innovation to address stagnating plantation productivity.
GAPKI Chairman Eddy Martono said the palm oil sector remains a key pillar of national economic resilience, particularly through employment creation and foreign exchange earnings. He delivered the remarks in a keynote address at the National Palm Oil Seminar hosted by UPN Veteran Yogyakarta, on Thursday (January 22, 2026).
Eddy noted that the palm oil industry currently employs around five million direct workers across the value chain, from plantations to downstream processing.
Also Read: GAPKI and PPKS Host Oil Palm Plantation Management Training for Tanzanian Delegation
“Palm oil is extraordinary. It provides massive employment opportunities,” he said, adding that the sector plays a crucial role in sustaining regional economies and maintaining social stability.
He also warned against the persistent negative campaigns targeting palm oil, stressing that unchallenged narratives risk being accepted as truth.
“If palm oil is continuously attacked and negative campaigns are left unanswered, over time they can be perceived as facts. This is what we must counter with data and evidence,” Eddy emphasized.
Eddy highlighted the industry’s strong contribution to state revenue, pointing out that during the COVID-19 pandemic, palm oil exports continued to perform and generated around US$39 billion in foreign exchange, without triggering large-scale layoffs.
Also Read: GAPKI Calls for Stronger Palm Oil Export Governance, Citing Port Inefficiencies and Data Gaps
He added that the decline in palm oil export earnings in 2024 did not reflect structural weakness in the industry, but rather global vegetable oil price dynamics.
“Foreign exchange earnings fell because palm oil prices were higher than competing vegetable oils. But in terms of industrial strength, we remain solid,” he said.
Biodiesel Mandate Helps Stabilize Fresh Fruit Bunch Prices
Eddy said Indonesia’s biodiesel blending mandate, in place since 2008, has been instrumental in maintaining industry stability, including supporting fresh fruit bunch (FFB) prices at the plantation level.
Before the mandate, he recalled, FFB prices were once extremely low. The progressive strengthening of biodiesel blending requirements in recent years has helped sustain domestic demand and provided greater market certainty for producers.
Also Read: From Palm Oil to Consumer Goods, Indonesian Brands Expand Across Pakistan’s Retail Shelves
However, Eddy cautioned that Indonesia now faces a serious supply-side challenge. Palm oil production, he said, has tended to stagnate over the past five years. If biodiesel mandates continue to rise without parallel improvements in productivity, supply constraints could emerge.
“If the biodiesel mandate keeps increasing while production remains stagnant, we will eventually face supply shortages,” he warned.
Industry Pushes Pollination Technology to Boost Yields
To address the productivity slowdown, Eddy said the industry is actively encouraging innovation, including the introduction of more aggressive pollinating insects and other technologies aimed at lifting yields.
He expressed hope that these efforts would help protect plantation productivity, strengthen competitiveness, and ensure the industry can continue to meet both domestic and global demand.
“Our hope is that productivity can rise. We must be able to safeguard productivity,” Eddy concluded.
He closed his remarks by stressing the importance of maintaining a positive climate for the palm oil industry, given its significant contributions to employment, foreign exchange earnings, and domestic market development through the biodiesel program. (P2)
