PALMOILMAGAZIZNE, JAKARTA – At the start of 2025, Indonesia’s palm oil industry is facing a paradox: while production numbers are trending downward, domestic consumption is on the rise—offering both challenges and opportunities for the world’s largest palm oil producer.
According to Mukti Sardjono, Executive Director of the Indonesian Palm Oil Association (GAPKI), crude palm oil (CPO) production in February 2025 stood at 3.789 million tons, marking a slight decline of about 1% from January’s 3.828 million tons. Similarly, palm kernel oil (PKO) production also edged down from 356 thousand tons to 354 thousand tons.
Combined, the total production of CPO and PKO reached 4.144 million tons in February, compared to 4.184 million tons in January—down nearly 1%. On a year-on-year basis, cumulative production as of February 2025 was 8.327 million tons, representing a 6.3% drop from the same period in 2024, which recorded 8.886 million tons.
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Despite this decline in output, domestic demand is showing positive momentum. In February alone, domestic consumption rose to 2.030 million tons—an 8.5% increase from January’s 1.871 million tons. This growth is primarily driven by rising biodiesel usage, which jumped from 916 thousand tons to 1.001 million tons. Food use also saw a notable increase from 758 thousand tons to 854 thousand tons. The only sector to post a decline was oleochemical consumption, which dipped to 175 thousand tons from 197 thousand tons.
Cumulatively, domestic consumption through the end of February reached 3.902 million tons—up 2.5% year-on-year. Food-related demand rose 2.8% to 1.612 million tons, biodiesel rose 2.2% to 1.917 million tons, and oleochemicals climbed 2.8% to 372 thousand tons.
These figures highlight the growing significance of domestic demand in supporting the palm oil sector amid a global landscape marked by weather disruptions and market fluctuations. With international challenges persisting, Indonesia’s internal market is increasingly becoming a stabilizing force for the national palm oil industry. (P2)
