Indonesia’s palm oil industries have been continually functioning as the mainstay of national economy, especially in earning foreign exchange from exports, realizing surplus to trade balance and reducing oil-gas deficit. Latest data from PASPI (Palm oil Agribusiness Strategic Policy Institute) and BPDP (Oil Palm Plantation Fund Management Board) shows the positive trend of palm oil contribution to national economy.
Palm oil and derivative products also saw a rising trend of contribution to Indonesia’s foreign exchange earnings from exports. During period of 2000 – 2024, the export value of palm oil significantly increased from US$1.1 billion in 2000 to US$28.3 billion in 2024. The increase underscores the position of palm oil as one of Indonesia’s strategic commodities and major contributors to the country’s foreign exchange.
Indonesia’s exports of palm oil are no longer dominated by crude oil (CPO/CPKO). In 2011, 52% of its exports are unprocessed crude oil, while 41% are processed products. In 2024, the processed products drastically rose to 74%, while crude products are only 16%. Besides, 10% of exports are products based on palm oil such as oleochemical and biodiesel, indicating higher added value for domestic industries.
The palm oil products of Indonesia are exported to various destination countries, with the following five countries as the main destinations:
- China: 20,4%
- India: 15,1%
- EU-27: 10,4%
- Pakistan: 9,3%
- USA: 6,9%
The rest of exports at 37.9% are sent to other countries (ROW). Trade policies, such as IEU CEPA and reciprocal tariff of USA, had affected the volume of exports.
Without palm oil exports, Indonesia’s trade surplus from its non-oil-gas sector is relatively small or even in deficit. Data of 2016–2024 shows that the exports of palm oil products increased the trade surplus in the non-oil-gas sector. For example in 2022, the surplus of non-oil-gas sector with palm oil reached US$78.8 billion, far higher than that without the palm oil (US$26.4 billion).
The mandatory program of biodiesel (currently B40) also plays an important role in reducing the import of fossil diesel fuel, saving the foreign exchange and reducing the deficit caused by oil and gas. For example, in 2024 the oil-gas deficit without the palm oil-based biodiesel reached US$ -28.5 billion, but with the palm biodiesel decreased to US$-20.4 billion.
The palm oil has a very significant contribution to the trade balance. Without palm oil and the palm oil-based biodiesel, Indonesia will suffer from trade deficit. But with the palm oil and palm oil-based biodiesel, the country’s trade balance shows a sustained surplus. For example, in 2022 the surplus of trade balance with palm oil and palm oil-based biodiesel reached US$54.5 billion.
The palm oil is not just export commodity. By down-streaming of products, exports to global market, and biodiesel mandatory program, the palm oil industries play an important role in realizing the following goals:
- Increasing foreign exchange
- Creating surplus of trade from non-oil-gas sector
- Reducing oil-gas deficit
- Supporting national trade balance
Considering its very significant role and contribution, the palm oil industries have become one of the economic pillars of Indonesia that should always become the focal point of national attention. (*)
PASPI & BPDP (2025). BPS, ITC Trademap (data diolah PASPI, 2025). Referensi tautan: bit.ly/SawitSumberDevisa | bit.ly/SawitdalamNetTrade
