PALMOILMAGAZINE, JAKARTA – Fadhil Hasan, Senior Economist at the Institute for Development of Economics and Finance (INDEF), has identified five critical issues that deserve close attention in the palm oil trade relationship between Indonesia and India.
The first concern is the downward trend in India’s palm oil imports from Indonesia since 2024. Data show that during January–June 2025, exports to India fell by 28% compared to the same period a year earlier.
The main driver was global palm oil prices, which at times were higher than other vegetable oils, prompting India to switch to alternative sources.
Also Read: Stronger Soybean Oil and Crude Lift Malaysia CPO Futures, June Hits RM4,046 per Ton
This is a clear reminder: competitiveness matters. When price gaps widen, buyers adjust quickly.
The second issue relates to Indonesia’s biodiesel mandate. The expansion of the blending requirement to B40 has raised concerns about the availability of palm oil for export markets, including India.
Plans to move toward B50 or even higher blending levels in the coming years will be a decisive factor in maintaining market balance between domestic energy needs and export commitments.
Also Read: Indonesia Sets March 2026 CPO Reference Price at USD 938.87/MT, Export Duties Adjusted
If not managed carefully, supply tightness could influence long-term trade flows.
Third, India is targeting edible oil self-sufficiency within the next two decades. While this ambition could eventually reduce import dependence, Fadhil sees room for collaboration rather than confrontation.
Opportunities remain open, particularly in supplying superior planting materials and technology from Indonesia to support India’s domestic productivity goals.
Strategic partnership can coexist with self-sufficiency efforts—if both sides are pragmatic.
The fourth issue is India’s fluctuating import tariff policy. Frequent and sometimes sudden adjustments make it difficult for Indonesian exporters to predict market conditions.
This policy uncertainty underscores the need for more intensive bilateral dialogue and proactive engagement in India to create greater trade certainty and stability.
Also Read: Jambi Palm FFB Prices Down IDR 22.71/kg for Feb 27–Mar 5, 2026 Period
Exporters cannot operate effectively in a climate of constant unpredictability.
Finally, perception and evolving market demands remain a structural challenge. Palm oil is still often viewed as inferior to other vegetable oils, particularly among middle- and upper-income consumers in India.
In reality, palm oil holds advantages in nutritional value and efficiency. However, perception shifts require consistent public education and sustained campaigns.
Also Read: North Sumatra FFB Prices Rise Slightly for the Period February 25–March 3, 2026
In addition, the Indian market is increasingly demanding sustainably produced palm oil, aligning with the global push toward environmentally responsible practices.
According to Fadhil, the Indonesia–India palm oil relationship must evolve beyond traditional trade transactions.
“Palm oil trade between Indonesia and India must go beyond conventional buying and selling. It needs to expand into research collaboration, investment partnerships, and joint campaigns to ensure long-term market sustainability,” he emphasized, as quoted by Palmoilmagazine.com from InfoSAWIT.
The message is clear: the future of this trade corridor will depend not only on price and volume, but on policy alignment, strategic cooperation, and credible sustainability commitments. (P2)
