{"id":31095,"date":"2026-02-22T11:45:12","date_gmt":"2026-02-22T04:45:12","guid":{"rendered":"https:\/\/gapki.id\/en\/?p=31095"},"modified":"2026-02-26T11:50:28","modified_gmt":"2026-02-26T04:50:28","slug":"ri-seeks-to-control-palm-oil-price-through-biofuel-program","status":"publish","type":"post","link":"https:\/\/gapki.id\/en\/news\/2026\/02\/22\/ri-seeks-to-control-palm-oil-price-through-biofuel-program\/","title":{"rendered":"RI Seeks To Control Palm Oil Price Through Biofuel Program"},"content":{"rendered":"

JAKARTA – Indonesia is accelerating downstream development in its crude palm oil (CPO) sector as it seeks to position itself as a global price setter for the commodity, a role currently dominated by exchanges in Malaysia and Rotterdam despite Indonesia being the world\u2019s largest producer and consumer.<\/p>\n

Agriculture Minister Andi Amran Sulaiman said Indonesia\u2019s dominance in palm oil production has not translated into pricing power, leaving benchmark prices largely dictated by neighbouring Malaysia and importing countries.<\/p>\n

\u201cWe own the CPO, but sadly, our neighbour and buyers who set the prices, even though much of Malaysia\u2019s supply comes from Indonesia,\u201d Amran said.<\/p>\n

He said the government is prioritizing biofuel development as a key downstream industry for both domestic use and exports, in coordination with the Energy and Mineral Resources Ministry. The initiative has received approval from President Prabowo Subianto, Amran added.<\/p>\n

Cooking Fats & Oils<\/strong><\/h2>\n

Exports from biofuel alone could lift palm oil export revenue to Rp 1,500 trillion ($88.9 billion) from Rp 549 trillion currently. If processed palm oil products such as margarine and cooking oil are included, total export earnings could reach Rp 5,000 trillion ($296 billion), Amran said.<\/p>\n

Managing Supply to Influence Prices<\/strong>
\nA key consequence of domestic industrialization would be diverting part of CPO exports to local processing. Amran said the government plans to manage this shift through a flexible \u201copen-and-close\u201d strategy.<\/p>\n

For example, Indonesia could redirect 5 million tons of CPO originally intended for export into domestic biofuel production, reducing diesel imports and potentially pushing global prices higher. When prices rise, exports could be increased; when prices fall, more supply would be absorbed by the local industry.<\/p>\n

Indonesia applied a similar tactic during its temporary export ban in 2022 to stabilize domestic cooking oil supplies. CPO prices surged to Rp 32,160 per kilogram in April 2022 before sliding to Rp 14,848 per kg by April 2024.<\/p>\n

Economist Bustanul Arifin, a professor of agricultural economics at Lampung University, said downstream industrialization is essential if Indonesia is to achieve President Prabowo\u2019s ambitious target of 8% economic growth in the coming years.<\/p>\n

Indonesia\u2019s economy has expanded by about 5% annually over the past decade.<\/p>\n

\u201cWe keep asking where that 8% will come from. It won\u2019t be achieved by exporting raw commodities alone. Agricultural products must be processed \u2014 fresh fruit bunches need to become palm oil, and palm oil needs factories,\u201d Bustanul said, adding that processing would also create jobs and stimulate growth.<\/p>\n

Beyond palm oil, the government is also planning downstream projects for coconut and gambir, a plant extract used in pharmaceuticals and other industries.<\/p>\n

Amran said Indonesia is the world\u2019s largest coconut producer, yet raw coconuts sell for just Rp 1,350 per piece. Once processed into coconut milk, coconut water, and related products, their value could increase up to 100 times.<\/p>\n

Indonesia also controls about 80% of global raw gambir supply, but most processing still takes place overseas \u2014 a gap the government now aims to close as part of its broader industrialization drive. (*)<\/p>\n

\n

Jakarta Globe. (2026). RI Seeks To Control Palm Oil Price Through Biofuel Program<\/em>. https:\/\/jakartaglobe.id\/business\/indonesia-aims-to-take-control-of-global-cpo-pricing-with-biofuel-strategy<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

JAKARTA – Indonesia is accelerating downstream development in its crude palm oil (CPO) sector as it seeks to position itself as a global price setter for the commodity, a role currently dominated by exchanges in Malaysia and Rotterdam despite Indonesia being the world\u2019s largest producer and consumer.<\/p>\n","protected":false},"author":1,"featured_media":31096,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"neve_meta_sidebar":"","neve_meta_container":"","neve_meta_enable_content_width":"off","neve_meta_content_width":70,"neve_meta_title_alignment":"","neve_meta_author_avatar":"","neve_post_elements_order":"","neve_meta_disable_header":"","neve_meta_disable_footer":"","neve_meta_disable_title":"","neve_meta_reading_time":"","footnotes":""},"categories":[3708,3709],"tags":[],"class_list":["post-31095","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-publication","category-recent-news"],"yoast_head":"\nRI Seeks To Control Palm Oil Price Through Biofuel Program - Gabungan Pengusaha Kelapa Sawit Indonesia (GAPKI)<\/title>\n<meta name=\"description\" content=\"Amran said Indonesia is the world\u2019s largest coconut producer, yet raw coconuts sell for just Rp 1,350 per piece. 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