JAKARTA – The Indonesian Palm Oil Association (GAPKI) said that Indonesian palm oil industry has been ready to fulfil all of the requirements set by the European Union Deforestation-free Regulation (EUDR). But the association reminded that the oil palm smallholders could still be facing a big challenge as many of them are still being hindered by problems related to land legality.
On the other side, GAPKI also reminds that the decline of palm oil exports in 2027 risks to disrupt Indonesia’s trade balance. GAPKI Chairman Eddy Martono made the statement during a press conference on the association’s plan to hold the 22nd Indonesian Palm Oil Conference (IPOC) and 2027 Price Outlook (IPOC 2026) at GAPKI office building, Jakarta, on Friday (9/10/2026).
GAPKI Chairman Eddy Martono stated that Indonesia is actively working toward compliance with the EUDR. He noted that from the companies’ perspective, the required criteria can be met.
“For all practical purposes, we are ready for the EUDR. Our geolocation data is clear, our licensing is clear—everything is clear. The real issue lies with the farmers and the community. Many of them are still facing challenges regarding legality,” said Eddy.
Eddy added that the EUDR requires the sharing of plantation geolocation data, whereas Indonesian regulations do not permit such data to be shared publicly.
European importers still need Indonesian palm oil
Eddy has just returned from a visit to Amsterdam, the Netherlands, where he and a team from GAPKI attended a meeting with the European Union importers at “Rumah Indonesia” (Indonesian House). According to him, the importers are also concerned about the implementation of the EUDR. The Indonesian government itself has proactively proposed a Memorandum of Understanding (MoU) to the European Union.
“What they informed is that the importers need palm oil from Indonesia. That is the key point. They also want the resolution regarding the EUDR to be a win-win solution. We must avoid a scenario where we are unprepared and trade is suddenly halted completely, that would then cause difficulties for them as well,” said Eddy.
He added that the Indonesia–European Union Comprehensive Economic Partnership Agreement (IEU-CEPA) is also scheduled to come into effect in 2027. This agreement opens up zero-tariff access for 1 million tons of palm oil to the European Union. The latest developments regarding the EUDR and IEU-CEPA are scheduled to be presented by Deputy Foreign Minister Arif Havas Oegroseno at IPOC 2026.
“The direction the Indonesian government is taking is to seek a win-win solution. But as for the specifics, we will await the statement from Mr. Havas later at IPOC,” he said.
Trade balance could come under pressures
GAPKI Secretary General Hadi Sugeng Wahyudiono explained that in 2027 El Niño is expected to reduce production to 56.6 million tons, down from a potential of around 60 million tons. At the same time, the full-year implementation of the B50 mandate will absorb approximately 17.4 million tons of palm oil. Total domestic consumption is projected to rise to 30 million tons, leaving an export volume of only 26.5 million tons.
“This decline in export volume will inevitably impact Indonesia’s trade balance. Our trade balance relies heavily on the contribution of palm oil. As of August, our aggregate surplus stood at only around US$7 billion, whereas palm oil alone contributed tens of billions of dollars. If the palm oil sector is disrupted, we could see a deficit,” Hadi explained.
Hadi emphasized that the 2027 production projection remains optimistic. “Some experts actually predict a decline of 10 to 20 percent—or around 15 percent. A 15 percent drop from the 60-million-ton potential would represent an even steeper decline,” he said.
Low Realization of PSR
Regarding productivity, IPOC 2026 Organizing Committee Chairman Suryanto Bun outlined the implementation of the replanting program for smallholders’ oil palm plantations (PSR). Since the program’s inception in 2016, only about 428,000 hectares had been replanted over the course of roughly a decade. This figure falls far short of the average annual target of 150,000 hectares.
“PSR achievements have indeed been low. However, compared to last year, the results this year appear more promising,” said Suryanto.
According to Suryanto, the primary obstacle lies in farmers’ access to the program. Much of the community-owned land falls within designated forest areas, rendering it ineligible for replanting. Furthermore, administrative requirements remain difficult to meet, despite significant simplifications to the procedures.
To accelerate progress, GAPKI is promoting a partnership model. Under this arrangement, member companies assist farmers—organized through cooperatives—in accessing the PSR program.
“Administratively, things have improved, and many requirements have been reduced. Yet, fulfilling them still presents numerous challenges, particularly for the farmers themselves,” he explained.
All these issues will be discussed thoroughly during the IPOC 2026, scheduled for 11 – 13 November 2026, at the Bali International Convention Center (BICC), The Westin Resort Nusa Dua, Bali. GAPKI intends to present the conference outcomes to the government as policy input. The association also invites the media to attend and help communicate the IPOC findings to the public. (*)
