Indonesia makes palm oil downstream processing central to export growth

Processing becomes an export priority

Indonesia is placing downstream palm oil processing at the center of its agricultural export strategy after the value of crude palm oil and derivative exports increased during the first half of 2026. Agriculture Minister Andi Amran Sulaiman described downstream processing as a strategic export “weapon,” arguing that the country can capture more value from its position as the world’s largest palm oil producer.

According to ANTARA, Amran said Indonesia and Malaysia together control about 80% of global CPO production. That concentration gives Indonesia substantial influence over the supply of the commodity, but the government wants a larger share of revenue to come from processed products rather than growth in raw material shipments alone. The Ministry of Agriculture plans to keep promoting downstream industries so that exports generate more domestic value and deliver broader benefits to the national economy and farmers.

CPO export value rises 7.32%

Statistics Indonesia, known as BPS, reported that the value of CPO and derivative exports rose 7.32% year on year between January and June 2026. The agency attributed the increase to stronger CPO prices in the international market. The figures indicate that price appreciation, rather than a disclosed change in shipment volume, was an important driver of the export result.

The improvement formed part of a broader increase in Indonesian trade. Total exports reached $140.81 billion in January-June 2026, up 4.13% from the same period a year earlier. Non-oil and gas exports grew 4.90% to $134.58 billion, with the animal or vegetable fats and oils category under HS15—including CPO and its derivatives—among the principal contributors to national export growth.

In June alone, Indonesia exported goods worth $25.46 billion, an increase of 8.84% year on year. Export value in the HS15 fats and oils category rose 10.45%. BPS Deputy for Distribution and Services Statistics Ateng Hartono said higher international CPO prices had positively affected Indonesia’s export earnings.

Palm oil outperforms other major commodities

Palm oil also remained one of the main engines of Indonesia’s non-oil and gas trade. BPS data cited by ANTARA show that CPO and derivatives, iron and steel, and coal together accounted for about 28.30% of the country’s non-oil and gas exports in the first half of 2026. Among those three groups, CPO recorded the strongest export-value growth at 7.32%, while iron and steel declined 0.16% and coal increased only 0.63%.

Agriculture, forestry and fisheries exports were valued at $485.8 million in June. Their cumulative value reached $2.59 billion during January-June, 1.84% more than a year earlier. For palm oil producers and processors, the government’s policy direction points to further emphasis on refining and manufacturing capacity. The available figures do not specify new plants, investment commitments or processing targets, but they establish the commercial rationale: palm oil export value is growing faster than several other core commodity groups, while Indonesia’s production position provides a large raw-material base for higher-value products.