Indonesia, the world’s largest palm oil producer, has increased its export tax on crude palm oil (CPO) from 7.5% to 10% effective May 17. This policy move is designed to boost funding for domestic biofuel programs and national replanting initiatives.
The Indonesian Ministry of Finance also raised levies on other palm oil products to further support smallholder farmer programs, rejuvenate aging plantations, and scale up biodiesel production. Indonesia has already increased its biodiesel mandate from 35% to 40% and aims to reach 50% by 2026. Additionally, a 3% palm oil blend in jet fuel is being considered for 2026.
By the end of April 2025, Indonesia had consumed 4.44 million kiloliters of biodiesel and plans to distribute 15.6 million kiloliters by year-end—up from 13 million in 2024. The nation supplies nearly 60% of global palm oil, producing over 30 million tons annually. The sector contributes 4.5% to the country’s GDP and employs about 3 million people, making it central to the national economy.
However, declining yields from aging trees threaten future output. To counter this, Indonesia plans to release one million African weevils—imported from Tanzania—into select plantations to enhance pollination and fruit development.
President Prabowo Subianto has controversially claimed that oil palm plantations should not be labeled as deforestation, citing that oil palms are trees. Critics, however, argue this ignores scientific evidence linking palm oil cultivation to deforestation, biodiversity loss, and rising carbon emissions. Experts recommend increasing productivity on existing farmland instead of expanding into ecologically sensitive areas.
Nigeria Charts a Bold Course for Palm Oil Revival
Despite being the fifth-largest global producer, Nigeria still imports nearly half of the two million metric tons of palm oil it consumes annually.
In a bid to regain its position in the global market, Nigeria has launched an ambitious national plan through the Oil Palm Growers Association of Nigeria (OPGAN). The strategy aims to replant 1.5 million hectares of oil palm over the next five years under the Oil Palm Development Strategy (2024–2029). The goal: elevate Nigeria’s ranking from fifth to third in global palm oil production.
Edo State, Nigeria’s palm oil powerhouse, hosts key industry players like Presco and Okomu Oil—both listed on the Nigerian Stock Exchange. In 2024, despite tough economic conditions, both companies reported record-breaking post-tax profits, signaling strong investor confidence and industry potential.
The new strategy focuses on revitalizing the sector through sustainable practices, modern technology, better planning, inclusive growth, and increased investment. It also marks the first time a comprehensive, industry-driven national roadmap is being created to address the challenges of Nigeria’s palm oil subsector.
Credit: Nairametrics
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