Jakarta. Crude palm oil (CPO) and its derivatives are expected to remain among Indonesia’s top export earners in the second half of 2025, buoyed by a series of positive developments -- from the Indonesia–European Union Comprehensive Economic Partnership Agreement (CEPA) to stronger global prices.

Data from the Central Statistics Agency (BPS) shows that CPO and derivative exports reached 11 million tons in the first half of 2025, up 2.69 percent from 10.72 million tons in the same period last year. Export value surged 24.81 percent to $11.43 billion, compared with $9.16 billion a year earlier, as the average international CPO price jumped 22.21 percent to $1,053.03 per ton from $861.65 per ton.

CPO and derivative products accounted for 8.91 percent of Indonesia’s total non-oil and gas exports in the first half of 2025, trailing steel (10.74 percent) and coal (9.32 percent).

Industry Optimism
Eddy Martono, Chairman of the Indonesian Palm Oil Association (GAPKI), said palm oil remains a pillar of Indonesia’s trade performance. “Palm oil will continue to underpin non-oil and gas exports in the second half of this year, supported by Donald Trump’s tariff reduction and the CEPA with the EU,” he said.

However, Eddy noted that the positive sentiment does not automatically translate into higher export volumes, as demand also depends on the performance of other vegetable oils. “In 2024, palm oil prices were higher than sunflower and soybean oil, prompting some importers to switch to other vegetable oils,” he said.

Prices Expected to Climb
Tungkot Sipayung, Executive Director of the Palm Oil Agribusiness Strategic Policy Institute (PASPI), said international CPO prices have already exceeded $1,000 per ton this year, with the January-August average nearing that level -- significantly higher than in 2024.

“By year-end, global CPO prices are likely to trend upward to around $1,100–$1,200 per ton,” Tungkot said. While he did not project the volume growth for the second half, he stressed that higher prices will significantly boost the export value of CPO and its derivatives.

He added that Trump’s tariff cuts and the EU-Indonesia CEPA are the most positive catalysts for future exports. “These agreements open markets for Indonesian palm oil. With free trade in place, even if the United States imposes a 19 percent tariff, exports to Europe could rise, with some re-exported to the US,” he explained.

According to Tungkot, palm oil exports do not need to be shipped directly from Indonesia; they can also be re-exported via other countries. Meanwhile, domestic production is performing better than expected, which, coupled with expanded market access, should sustain strong export performance through the end of the year.

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