TEMPO.CO, Jakarta - The Indonesian government is pursuing opportunities to export crude palm oil (CPO) to new markets, including Egypt. This move is a precautionary measure against a potential decrease in exports to India and Pakistan, which are currently embroiled in conflict.
Ardi Praptono, Director of Oil Palm and Other Palm Plants at the Ministry of Agriculture, said that demand for CPO is emerging from several countries in East Asia, Africa, and the Southern Hemisphere. "There is demand from East Asia, such as Egypt; we received a request yesterday. There is also demand from Africa and some countries in the South," Ardi said when met at JIExpo Kemayoran, Central Jakarta, on Wednesday, May 14, 2025.
While confirming Egypt's interest, Ardi did not specify the volume of this potential demand. "I don't know the exact figures, but we were informed yesterday," he noted.
Ardi explained that this market expansion is a mitigation effort to counter the potential impact of the India-Pakistan conflict on Indonesia's CPO exports. Currently, the Ministry of Agriculture has not received direct complaints from businesses regarding distribution disruptions due to the conflict. However, Ardi cautioned that the situation poses a risk of lowering Indonesian CPO prices in the global market.
"Looking at the current developments, it will indeed have an impact. As I said, mitigation is important. We need to penetrate new markets," he emphasized.
Meanwhile, Eddy Martono, Chair of the Indonesian Palm Oil Entrepreneurs Association (Gapki), confirmed that the conflict between these two major importing nations could affect the national palm oil industry. "The impact hasn't been significantly felt yet, but if it continues for a long period, it will definitely have an impact because India is the second-largest importer of Indonesia's palm oil," Eddy said when contacted on Saturday, May 10, 2025.
According to Eddy, Indonesia's annual CPO exports to India reach 5 million tons, while exports to Pakistan amount to 3 million tons. If the conflict persists, demand from these two countries is anticipated to decline, potentially leading to increased domestic stock and downward pressure on selling prices. "It will affect our stock. If our stock increases, it will definitely push prices down," he explained.
Nevertheless, Eddy pointed out that current CPO prices remain relatively high, hovering around US$1,000 per ton. "Ninety percent of Pakistan's palm oil imports [come from Indonesia], and for India, 5 million tons is a large export volume, meaning we hope this situation is resolved soon," he stated.
He further noted that the conflict's impact is not limited to the CPO market but could also trigger price decreases in other vegetable oil products like sunflower oil and soybean oil.
However, Eddy remains optimistic that overall export demand will not decrease dramatically. "It doesn't mean a direct decrease of 5 million tons; it doesn't seem like that," he said.
He also highlighted that Indonesia's trade balance with both India and Pakistan currently shows a surplus, indicating that both countries remain significant potential markets. In 2024, Indonesia's trade surplus with India was US$14.67 billion, while with Pakistan it was US$2.9 billion.
"So, this is a good market for Indonesia, meaning this is a potential market," Eddy concluded.
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