JAKARTA – The Indonesian Palm Oil Association (GAPKI) has projected that local palm oil production will only slightly increase by 3% this year.
GAPKI Executive Director Mukti Sardjono said that the palm production growth will be relatively stagnant if compared with the continual growth of local and global demands for vegetable oils. “We see that this year our palm oil production will still grow, but not significantly. Probably around 2 – 3 percent, while demand has been continually growing at higher level,” Mukti said in Jakarta on Wednesday (23/4/2025).
According to Mukti, it is difficult to increase the local production of palm oil at double digits. “Factors hindering the production rise include the slow implementation of replanting programs for smallholders’ plantations. The replanting realization has been always below target of around 150,000 – 180,000 hectares per year,” he said.
GAPKI stated that the problems of legal uncertainty and the uncertaitny of doing business in the Indonesia’s palm oil sector have obstructed efforts of increasing the production of palm oil. The legal uncertainties are resulted from the fact that too many ministries and government institutions involve in managing the palm oil sector.
Based on data from GAPKI, there are 37 institutions involve in regulating Indonesia’s palm oil industries, including on certification process that also involve many ministries/ institutions. “Regulations in the palm industry should be only issued through one integrated institution. Prevailing regulations shouldn’t be overlapping, but coordinated under one integrated institution. This is urgent for the palm industrial growth and our economic growth,” he said.
During the last six years, the production of palm oil has relatively stagnated at around 52 – 55 million tons per year. But at the same time local consumption has been continually rising.
Based on data from GAPKI, the local consumption had increased from 33.63 percent of total production in 2020, to 42.32 percent of total production in 2023, and to 45.22% of total production in 2024.
The increase of local consumption was driven by the use of biodiesel, which reached 11.44 million tons in 2024. The consumption for biodiesel had exceeded the consumption for foods at 10.2 million tons in 2024.
Total domestic consumption of palm oil reached 23.85 million tons in 2024. But total production of palm oil was relatively stagnant during the last five years at between 51.2 – 54.8 million tons.
In 2024 alone, total production of palm oil only reached 52.76 million tons, consisting of palm kernel oil (PKO) at 4.59 million tons, and crude palm oil (CPO) at 48.16 million tons. (*) Source: sawitkita.id
