Indonesia’s palm oil exports are projected to remain stagnant this year due to weak global economic growth, according to the Indonesian Palm Oil Association (GAPKI).

“The economic conditions in CPO-importing countries are being affected, ultimately reducing their import volumes from Indonesia,” Gapki chairman Eddy Martoni said as quoted by Katadata.co.id on Wednesday, August 6, 2025.

The International Monetary Fund (IMF) has revised its 2025 global growth forecast from 3.3 percent to 3 percent in June, citing a sluggish increase in global trade volume − projected to rise only 1.7 percent this year.

While exports are not expected to drop below 2024 levels, Gapki data shows last year’s CPO exports declined 8.31 percent year-on-year to 29.53 million tons. However, lower prices since April 2024 have supported export growth. Global CPO prices averaged over US$1,000 per ton in the first quarter (Q1) of 2025, before dropping to around US$900–1,000 (Rp14.7-16.3 million) in Q2.

During January–March 2025, CPO prices were the highest among vegetable oils, prompting some buyers to switch to alternatives like sunflower and soybean oil. But by mid-April, CPO prices fell below those of its competitors, boosting exports. Statistics Indonesia (BPS) recorded a 2.69 percent year-on-year increase in export volume to 11 million tons in the first semester (H1) of 2025.

On a positive note, exports to the European Union may rise up to 30 percent following the Indonesia-EU Comprehensive Economic Partnership Agreement (IEU-CEPA), which recognizes the sustainability of Indonesian CPO. This recognition could exempt it from the EU’s Deforestation Regulation (EUDR).

“Europe is a key market, taking in around 3 million tons annually. With this recognition, exports could rise to 3.5–4 million tons, though likely not reaching 5 million,” Eddy cited.

He, however, noted that Europe’s vegetable oil market has largely stabilized since Indonesia’s 2022 export ban under Trade Ministry Regulation No. 22/2022, which temporarily halted CPO exports to secure domestic cooking oil supplies.

Although the regulation was lifted in May 2022, European industries used the period to enhance self-sufficiency, limiting future CPO demand growth.