In January 2025, Indonesia's palm oil industry faced significant challenges as both production and exports declined, according to the Gabungan Pengusaha Kelapa Sawit Indonesia (GAPKI). Total production of crude palm oil (CPO) reached 3.828 million tons and palm kernel oil (PKO) reached 356 thousand tons, resulting in a combined output of 4.184 million tons. This figure marks a decrease of 53 thousand tons, or 1.25%, compared to December 2024, which recorded a total production of 4.237 million tons. Moreover, January's production was notably lower than the previous year, dropping by 9.7% from January 2024's output of 4.634 million tons.
Consumption of palm oil products also saw a downturn, with total consumption in January 2025 reaching 1.871 million tons, a significant drop of 14.45% from December 2024's consumption of 2.187 million tons. The decline in food consumption was particularly striking, falling from 961 thousand tons in December to 758 thousand tons in January, a decrease of 21.12%. Biodiesel consumption also decreased by 12.44%, from 1.046 million tons to 916 thousand tons. Conversely, oleochemical consumption increased to 197 thousand tons, up from 180 thousand tons in the previous month, reflecting a 9.44% rise.
On the export front, January 2025 saw a total of 1.960 million tons of palm oil products exported, which is 100 thousand tons lower than December's total of 2.060 million tons. The most significant drop was in crude palm oil exports, which plummeted by 43.58%, from 69 thousand tons in December to just 39 thousand tons in January. Oleochemical exports also experienced a decrease of 9.43%, falling from 428 thousand tons to 388 thousand tons, while processed CPO product exports saw a slight decline of 1.1%, from 1.465 million tons to 1.449 million tons.
GAPKI's Executive Director, Mukti Sardjono, noted that the decline in exports was evident across various key markets. Exports to Pakistan suffered the largest decrease, plummeting by 199 thousand tons or 53%. Similarly, exports to China decreased by 42% (197 thousand tons), to India by 36% (62 thousand tons), to Malaysia by 41% (60 thousand tons), and to the United States by 22% (49 thousand tons). However, not all regions experienced a decline; exports to the European Union increased by 53% (69 thousand tons), and exports to Africa rose by 18% (48 thousand tons), particularly driven by a remarkable 73% increase in shipments to Egypt, which accounted for 37 thousand tons.
The price of palm oil on the international market also saw a decline, dropping from US$ 1,313 per ton in December 2024 to US$ 1,208 per ton in January 2025. This decrease in price contributed to a reduction in the overall export value, which fell from US$ 2.379 billion (approximately Rp 38 trillion) to US$ 2.274 billion (around Rp 36 trillion). Notably, the total value of palm oil product exports in January 2025 represented about 10.9% of Indonesia's total non-oil and gas exports, which reached US$ 20.84 billion.
Despite the downturn in production and exports, the ending stock of palm oil in January 2025 increased to 2.936 million tons, up by 360 thousand tons from the previous month's stock of 2.576 million tons. This increase in stock could potentially influence palm oil prices in the upcoming months as market dynamics shift.
The challenges faced by Indonesia's palm oil industry in January 2025 highlight the complexities of global trade and market fluctuations. As the industry navigates these difficulties, stakeholders are closely monitoring consumption trends, export opportunities, and price movements to adapt to the ever-changing landscape.
This report was published in Jakarta on March 27, 2025, by GAPKI.
