PALMOILMAGAZINE, JAKARTA – Despite global price fluctuations and shifting export dynamics, Indonesia’s palm oil industry surged ahead in March 2025. Crude palm oil (CPO) production soared by 15.9% from the previous month, reaching 4.39 million tons. Palm kernel oil (PKO) output also climbed to 417 thousand tons. In total, combined CPO and PKO production hit 4.81 million tons—an impressive month-on-month growth.
“This production boost was driven by improved weather conditions and a more optimal harvest season in several key regions,” said Mukti Sardjono, Executive Director of the Indonesian Palm Oil Association (GAPKI), as quoted by Palmoilmagazine.com in the association’s monthly report on Saturday, May 31, 2025.
Domestic consumption also rose, particularly from the biodiesel and food sectors. Out of the total 2.15 million tons consumed locally, biodiesel accounted for approximately 1.07 million tons—up from 1 million tons in February. Food-related consumption increased significantly to 889 thousand tons.
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“Biodiesel demand remains strong, supported by the B35 policy. This reflects the government’s and industry’s firm commitment to renewable energy,” Mukti explained.
Exports followed the upward trend. Total export volume in March 2025 rose to 2.88 million tons, up from 2.8 million tons the previous month. The sharpest gains came from processed PKO exports, which jumped 49%, as well as other refined palm oil products and oleochemicals.
However, not all export destinations showed positive growth. Four major markets—China, India, Pakistan, and Bangladesh—recorded declining demand. Exports to India, for example, dropped nearly 30%, from 387 thousand tons to just 271 thousand tons.
“This drop likely reflects high domestic stock levels and tariff adjustments in those countries,” Mukti noted.
In contrast, markets in Europe and the United States showed a significant rebound. Exports to the European Union rose from 298 thousand tons to 343 thousand tons, while shipments to the U.S. jumped from 153 thousand tons to 249 thousand tons—a rare upswing in recent years.
“This demonstrates that Indonesian processed palm oil remains competitive and is increasingly accepted in markets with strict sustainability standards,” Mukti added.
In terms of value, March exports reached US$3.28 billion, or approximately Rp54.1 trillion—an increase of 2.84% from February. This growth was supported by rising international CPO prices (from US$1,232 to US$1,251 per ton, cif Rotterdam) and a strengthening U.S. dollar.
As a result of rising exports and domestic demand, end-of-March stockpiles fell to 2.036 million tons, down 213 thousand tons from the previous month.
“This stock decline could be a positive signal for domestic prices. It also indicates that supply is being effectively absorbed by both domestic and export markets,” Mukti concluded.
While March’s momentum provides a welcome boost, industry players remain cautious. Global market volatility, protectionist trade policies, and persistent negative sentiment toward palm oil continue to pose risks. Still, for now, Indonesia’s palm oil sector can breathe a sigh of relief—March has been a standout month. (P2)
