PALMOILMAGAZINE, JAKARTA – Indonesia’s palm oil industry continues to face several strategic challenges, ranging from unresolved legal status of smallholder plantations and obstacles in the smallholder replanting program (PSR) to global geopolitical tensions that could disrupt export routes.
Chairman of the Indonesian Palm Oil Association (IPOA or GAPKI), Eddy Martono, said the legality of smallholder oil palm plantations remains one of the most pressing issues that must be addressed to ensure the long-term sustainability and productivity of the industry.
“The palm oil industry still faces significant challenges related to the legal status of smallholder plantations. This remains an important task that must be resolved together,” he said, as quoted by Palmoilmagazine.com during a press conference on Sunday (March 15, 2026).
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Beyond land legality, Eddy also highlighted ongoing difficulties in implementing the Smallholder Palm Oil Replanting Program (PSR), which continues to face obstacles in several regions.
According to him, if the replanting program can be implemented effectively, it will significantly improve plantation productivity and support the overall growth of the national palm oil sector.
“We are concerned that many farmers still face barriers in accessing replanting programs. If replanting runs smoothly, productivity targets can be achieved. Therefore, this issue must be resolved as soon as possible,” he explained.
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Global Conflicts Push CPO Prices Higher
Eddy added that global geopolitical tensions are creating both challenges and opportunities for the palm oil industry. While conflicts in several regions raise concerns about trade stability, they have also contributed to rising crude palm oil (CPO) prices.
Indonesia currently exports palm oil products to around 177 countries, with total export volumes reaching approximately 32.3 million tons and export values estimated at US$35.8 billion annually.
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“On one hand, we are concerned about global conflicts. But on the other hand, higher CPO prices have also helped support the economy,” Eddy noted.
However, geopolitical tensions could also disrupt Indonesia’s export logistics, particularly shipments to the Middle East.
Indonesia exports approximately 1.83 million tons of palm oil products to the region, with most shipments passing through shipping lanes near the Strait of Hormuz.
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If this route becomes disrupted, vessels carrying palm oil may need to divert to alternative routes such as passing through Cape Town in South Africa. Such rerouting would increase logistics costs due to longer sailing distances and higher fuel consumption.
Meanwhile, the Suez Canal route is also considered relatively costly, posing another logistical challenge for exporters.
“If shipping routes must be diverted, logistics costs will certainly increase due to higher fuel consumption,” Eddy explained.
Palm Oil Exports Continue to Europe and Africa
Despite global uncertainties, Indonesia’s palm oil exports continue to flow to various regions around the world.
Eddy noted that exports to Europe reach approximately 3.23 million tons, while shipments to the Eurasian region remain relatively small.
Meanwhile, exports to Africa remain relatively strong, although shipments to several countries, including Egypt, have experienced disruptions due to geopolitical developments.
“We are grateful that exports are still continuing. However, if this situation persists, it could affect purchasing activities due to rising logistics costs,” he said.
Eddy emphasized that the palm oil industry should be viewed as a strategic national asset that must be supported through balanced and conducive policies.
He added that the government should strengthen trade diplomacy to address tariff barriers in global markets while also reviewing tax and levy policies to ensure they do not place excessive burdens on the industry.
“Palm oil must be treated as a strategic national industry. Policies must be balanced so the sector can maximize production and continue contributing to the national economy,” he stressed.
Eddy also urged the public not to amplify misinformation or hoaxes about the palm oil industry, although he noted that constructive criticism remains welcome.
“At GAPKI, we are open to criticism. However, misinformation should not be exaggerated,” he said.
During the same occasion, Eddy also reminded stakeholders that GAPKI is marking its 45th anniversary this year and called on all parties to work together to maintain the stability of the palm oil industry, which plays a crucial role in supporting Indonesia’s economy. (P2)
