Indonesia’s palm oil exports surged 62.2% in February 2025, reaching 2.06 million metric tons, the highest in four months, fueled by a reduction in export taxes.
Palm oil is a crucial component in food products, cosmetics, and household items. It has long been the most affordable vegetable oil, especially for consumers in emerging markets such as India. However, the era of inexpensive palm oil may be coming to a close.
Indonesia’s growing dependence on palm oil for biofuel is a key driver of rising prices. The government recently raised the mandatory biodiesel blend to 40% and is contemplating increasing it to 50% by 2026.
As a result, many buyers shifted to Indonesia, while Malaysia saw a 16.27% drop in exports.
The export boost will help reduce Indonesia’s palm oil stockpiles and support prices, which are currently at a premium over soyoil. This trend shows how tax adjustments can influence global demand, strengthening Indonesia’s position in the palm oil market.
