Indonesia Palm Oil Export Earnings Rise 16% to $28.84 Billion

JAKARTA, Indonesianpost.com — Indonesia’s palm oil export earnings reached $28.84 billion in January–October 2026, up 16% from $24.88 billion in the same period a year earlier.

Export volumes also rose, reaching 33.8 million metric tons in the first 10 months of 2026, a 6% increase from the corresponding period last year.

Coordinating Economic Minister Airlangga Hartarto said the palm oil industry plays a strategic role through its contributions to exports, economic growth and energy security. The plantation subsector accounted for 5.15% of Indonesia’s gross domestic product in the third quarter of 2026, with palm oil its largest contributor.

“Palm oil is one of Indonesia’s strategic commodities. Beyond its significant contribution to the national economy, it offers a comparative advantage in land-use efficiency, yielding around four metric tons of oil per hectare, while other major vegetable oil crops produce less than 0.7 metric tons per hectare,” Airlangga said at the 22nd Indonesian Palm Oil Conference, in remarks cited on November 13, 2026.

Stronger Exports Coincide With Rising Biodiesel Demand

As exports increase, the government is also accelerating the use of palm oil to meet domestic energy needs. A key measure is the B50 biodiesel mandate, which took effect on July 1, 2026.

The policy forms part of Indonesia’s push to expand domestic processing, reduce dependence on fossil fuels and capture more value from its commodities.

The B50 mandate is expected to increase biodiesel demand to 16.7 million kiloliters, from around 15.6 million kiloliters under the B40 program. The government also projects that the policy could cut greenhouse gas emissions by around 44.46 million metric tons of carbon dioxide equivalent.

Beyond biodiesel, the government has begun exploring palm oil-based sustainable aviation fuel. The initiative could create demand from the aviation industry while expanding markets for higher-value palm oil products.

Indonesia’s palm oil production rose from 52.76 million metric tons in 2024 to 56.55 million metric tons in 2025. Output is projected to reach around 60 million metric tons in 2026, with domestic consumption at 27.9 million metric tons and exports at about 35 million metric tons.

Productivity and Sustainability Remain Key Challenges

To sustain industry growth, the government is seeking to raise productivity without continually expanding plantation acreage. Support includes the Smallholder Oil Palm Replanting Program, plantation infrastructure and equipment, and workforce development through scholarships, technical training and capacity-building for growers.

The government is also strengthening implementation of the Indonesian Sustainable Palm Oil certification scheme, the national sustainability standard. An accompanying information system is being developed to integrate plantation records, certification data and supply chain information, helping the industry meet market requirements.

Airlangga said the challenges facing the palm oil industry could provide an opportunity to strengthen Indonesia’s competitiveness in global supply chains.

“Through continued collaboration and a shared commitment, we can ensure that Indonesia’s palm oil industry remains a responsible contributor to global food security, a pillar of energy security and a lasting source of economic resilience,” he said. [Inilah/Bilah]