Palm oil news. May 2026
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May 30, 2026
Chasing billions: Indonesia’s commodity export crackdown sows confusion
New export rules promise billions in recovered revenue, but analysts warn the ensuing chaos could cost more than the gains
Indonesia lost nearly US$1 trillion in resource wealth over a 34-year period due to deceptive trade practices, President Prabowo Subianto declared in parliament on May 20.
That same day, a set of new export controls was unveiled. Foreign-exchange earnings would be locked in Indonesian banks for a prescribed time limit and producers of coal, palm oil and ferroalloys would be required to route sales through a new state-owned enterprise.
But barely had the ink dried on the new rules when talk of future exemptions began.
Countries that had free-trade agreements with Indonesia, such as the United States, might eventually be spared the most stringent requirements, officials signalled. Nickel pig iron, which accounts for the lion’s share of Indonesia’s nickel exports, was left off the list entirely. Some palm oil derivatives too.
Chief Economic Affairs Minister Airlangga Hartarto sought to clarify the rules on May 21, explaining that exporters from countries with reciprocal trade or bilateral agreements with Indonesia would be allowed to deposit just 30 per cent of their foreign-exchange proceeds in a non-state-owned bank for a minimum of three months.
Most other non-oil-and-gas exporters, by contrast, must retain 100 per cent of their earnings in special accounts specifically within state-owned banks for 12 months. The upstream oil and gas sector, meanwhile, has been completely exempted from the Danantara centralised marketing framework – though it remains subject to the lighter 30 per cent retention rule for three months. Confused?
Energy and Mineral Resources Minister Bahlil Lahadalia assured the market that existing contracts would not be disrupted, though companies would need to “synchronise their data and communicate” with the new state-owned entity to be known as Danantara Sumberdaya Indonesia, or DSI – an arm of the sovereign wealth fund Danantara.
By January 1, 2027 at the latest, DSI is expected to fully control export-related transactions, from sales to delivery, according to industry briefing documents.
To lead DSI, Danantara tapped Luke Thomas Mahony, an Australian with a background in trading and minerals and a prior directorship at Vale Indonesia.
Market confusion
For the companies, investors and industry players that Jakarta was ostensibly trying to reassure, the patchwork of rules and piecemeal exemptions has had the opposite effect.
“These exceptions raise many questions,” said Wijayanto Samirin, an economist at Paramadina University in Jakarta. “Why are some countries excluded? This certainly raises questions about fairness.”
Centralising exports could, in theory, add 60 trillion rupiah (US$3.36 billion) a year to state coffers, Wijayanto said, but he warned that “the costs caused by this uncertainty are extraordinary and investors will not see this positively”.
The market’s response was swift. Prices of Indonesian palm oil fell 10 per cent in a daily auction immediately after the announcement, according to American financial intelligence and analytics firm S&P Global.
“Palm oil buyers’ attention may now shift to Malaysia until more is known about how the export mechanism in Indonesia will be implemented,” said Paramalingam Supramaniam, director at Malaysia-based commodity brokerage firm Pelindung Bestari, in remarks to the US firm.
Officials have also launched investigations into several companies over alleged under-invoicing and transfer pricing that Prabowo referred to in his parliamentary speech.
Prabowo said the practice had caused US$908 billion in state losses between 1991 and 2024 and had led to low salaries for teachers, civil servants and inadequate state revenues.
Finance Minister Purbaya Yudhi Sadewa told reporters on Tuesday that 10 “major” crude palm oil producers were under scrutiny, including Singapore-based Wilmar International and Musim Mas Group. He accused the 10 companies of selling their crude palm oil to Singapore-based trading companies on paper only, while in reality shipping it directly to the US with mark-ups of up to 50 per cent.
Purbaya said his ministry had reviewed 20 crude palm oil exporters in total, with the remaining 10 found to have reported “small” under-invoicing. “We’re focusing on the big companies. If the big companies do that, the small ones probably do the same,” he said.
‘Indecisive’ stance
Aside from the rules themselves, economists say another concern surrounds the institution being handed responsibility to enforce them.
Dipo Satria Ramli, an economist at the Centre of Reform on Economics Indonesia, called DSI’s placement under Danantara a “red flag”, pointing to US credit rating agency Moody’s warning in February that the sovereign wealth fund’s establishment “raised risks to policy credibility and potential contingent liability for the government”.
Both Moody’s and Fitch Ratings have since cited Danantara as a reason for revising their outlook on Indonesia’s sovereign credit rating from “stable” to “negative”.
The government’s “indecisive” stance on the new rules could harm the investment climate “at a bad time when the economy and foreign direct investment are weakening”, he said. SCMP
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Danantara Sumber Indonesia won't profit from CPO export policy says Indonesia
Jakarta (ANTARA) - Deputy Minister of Agriculture Sudaryono stressed that PT Danantara Sumberdaya Indonesia (DSI) does not benefit financially from implementing the crude palm oil (CPO) export policy through the centralized service system.
"We are not making any profit," he remarked when met on Friday.
He conveyed this statement in regard to the government's policy regulating the integrated export of coal, crude palm oil (CPO), and ferroalloy through PT DSI.
Sudaryono stated that PT DSI will function as a management and supervisory entity in the export of national strategic commodities to ensure a more orderly trading mechanism.
He said that this clarification is expected to ease concerns from downstream palm oil businesses, especially refinery operators and exporters involved in export activities.
"We hope that after this, there will be no more concerns, especially for downstream palm oil business players, such as refineries and exporters," he remarked.
The government has set a three-month transition period from June 1 to August 31, 2026, before the export management policy by PT DSI is fully implemented.
During this transition period, the government will introduce a series of regulatory steps to gradually transfer palm oil export management from companies to mechanisms supervised by PT DSI.
Starting January 1, 2027, the government aims to fully implement nationwide management of palm oil, coal, and iron commodity exports through PT DSI.
Meanwhile, Chief Investment Officer (CIO) of Danantara Indonesia, Pandu Sjahrir, stated that PT DSI will operate a profit-oriented business through the management of natural resource exports, in line with the business orientation of the Danantara Investment Management Agency (BPI).
Initially, DSI will function as an agent or intermediary before expanding into other roles in line with the growth of its human resources capacity.
The company will operate in two phases. In the first phase, from June 1 to December 31, 2026, DSI will serve as an appraiser and intermediary between buyers and sellers of selected export commodities.
In the second phase, targeted to begin in January 2027, DSI will purchase commodities from domestic exporters before selling them to international markets. Antara News
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Chasing billions: Indonesia’s commodity export crackdown sows confusion
New export rules promise billions in recovered revenue, but analysts warn the ensuing chaos could cost more than the gains
Indonesia lost nearly US$1 trillion in resource wealth over a 34-year period due to deceptive trade practices, President Prabowo Subianto declared in parliament on May 20.
That same day, a set of new export controls was unveiled. Foreign-exchange earnings would be locked in Indonesian banks for a prescribed time limit and producers of coal, palm oil and ferroalloys would be required to route sales through a new state-owned enterprise.
But barely had the ink dried on the new rules when talk of future exemptions began.
Countries that had free-trade agreements with Indonesia, such as the United States, might eventually be spared the most stringent requirements, officials signalled. Nickel pig iron, which accounts for the lion’s share of Indonesia’s nickel exports, was left off the list entirely. Some palm oil derivatives too.
Chief Economic Affairs Minister Airlangga Hartarto sought to clarify the rules on May 21, explaining that exporters from countries with reciprocal trade or bilateral agreements with Indonesia would be allowed to deposit just 30 per cent of their foreign-exchange proceeds in a non-state-owned bank for a minimum of three months.
Most other non-oil-and-gas exporters, by contrast, must retain 100 per cent of their earnings in special accounts specifically within state-owned banks for 12 months. The upstream oil and gas sector, meanwhile, has been completely exempted from the Danantara centralised marketing framework – though it remains subject to the lighter 30 per cent retention rule for three months. Confused?
Energy and Mineral Resources Minister Bahlil Lahadalia assured the market that existing contracts would not be disrupted, though companies would need to “synchronise their data and communicate” with the new state-owned entity to be known as Danantara Sumberdaya Indonesia, or DSI – an arm of the sovereign wealth fund Danantara.
By January 1, 2027 at the latest, DSI is expected to fully control export-related transactions, from sales to delivery, according to industry briefing documents.
To lead DSI, Danantara tapped Luke Thomas Mahony, an Australian with a background in trading and minerals and a prior directorship at Vale Indonesia.
Market confusion
For the companies, investors and industry players that Jakarta was ostensibly trying to reassure, the patchwork of rules and piecemeal exemptions has had the opposite effect.
“These exceptions raise many questions,” said Wijayanto Samirin, an economist at Paramadina University in Jakarta. “Why are some countries excluded? This certainly raises questions about fairness.”
Centralising exports could, in theory, add 60 trillion rupiah (US$3.36 billion) a year to state coffers, Wijayanto said, but he warned that “the costs caused by this uncertainty are extraordinary and investors will not see this positively”.
The market’s response was swift. Prices of Indonesian palm oil fell 10 per cent in a daily auction immediately after the announcement, according to American financial intelligence and analytics firm S&P Global.
“Palm oil buyers’ attention may now shift to Malaysia until more is known about how the export mechanism in Indonesia will be implemented,” said Paramalingam Supramaniam, director at Malaysia-based commodity brokerage firm Pelindung Bestari, in remarks to the US firm.
Officials have also launched investigations into several companies over alleged under-invoicing and transfer pricing that Prabowo referred to in his parliamentary speech.
Prabowo said the practice had caused US$908 billion in state losses between 1991 and 2024 and had led to low salaries for teachers, civil servants and inadequate state revenues.
Finance Minister Purbaya Yudhi Sadewa told reporters on Tuesday that 10 “major” crude palm oil producers were under scrutiny, including Singapore-based Wilmar International and Musim Mas Group. He accused the 10 companies of selling their crude palm oil to Singapore-based trading companies on paper only, while in reality shipping it directly to the US with mark-ups of up to 50 per cent.
Purbaya said his ministry had reviewed 20 crude palm oil exporters in total, with the remaining 10 found to have reported “small” under-invoicing. “We’re focusing on the big companies. If the big companies do that, the small ones probably do the same,” he said.
‘Indecisive’ stance
Aside from the rules themselves, economists say another concern surrounds the institution being handed responsibility to enforce them.
Dipo Satria Ramli, an economist at the Centre of Reform on Economics Indonesia, called DSI’s placement under Danantara a “red flag”, pointing to US credit rating agency Moody’s warning in February that the sovereign wealth fund’s establishment “raised risks to policy credibility and potential contingent liability for the government”.
Both Moody’s and Fitch Ratings have since cited Danantara as a reason for revising their outlook on Indonesia’s sovereign credit rating from “stable” to “negative”.
The government’s “indecisive” stance on the new rules could harm the investment climate “at a bad time when the economy and foreign direct investment are weakening”, he said. SCMP
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Danantara Sumber Indonesia won't profit from CPO export policy says Indonesia
Jakarta (ANTARA) - Deputy Minister of Agriculture Sudaryono stressed that PT Danantara Sumberdaya Indonesia (DSI) does not benefit financially from implementing the crude palm oil (CPO) export policy through the centralized service system.
"We are not making any profit," he remarked when met on Friday.
He conveyed this statement in regard to the government's policy regulating the integrated export of coal, crude palm oil (CPO), and ferroalloy through PT DSI.
Sudaryono stated that PT DSI will function as a management and supervisory entity in the export of national strategic commodities to ensure a more orderly trading mechanism.
He said that this clarification is expected to ease concerns from downstream palm oil businesses, especially refinery operators and exporters involved in export activities.
"We hope that after this, there will be no more concerns, especially for downstream palm oil business players, such as refineries and exporters," he remarked.
The government has set a three-month transition period from June 1 to August 31, 2026, before the export management policy by PT DSI is fully implemented.
During this transition period, the government will introduce a series of regulatory steps to gradually transfer palm oil export management from companies to mechanisms supervised by PT DSI.
Starting January 1, 2027, the government aims to fully implement nationwide management of palm oil, coal, and iron commodity exports through PT DSI.
Meanwhile, Chief Investment Officer (CIO) of Danantara Indonesia, Pandu Sjahrir, stated that PT DSI will operate a profit-oriented business through the management of natural resource exports, in line with the business orientation of the Danantara Investment Management Agency (BPI).
Initially, DSI will function as an agent or intermediary before expanding into other roles in line with the growth of its human resources capacity.
The company will operate in two phases. In the first phase, from June 1 to December 31, 2026, DSI will serve as an appraiser and intermediary between buyers and sellers of selected export commodities.
In the second phase, targeted to begin in January 2027, DSI will purchase commodities from domestic exporters before selling them to international markets. Antara News
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May 29, 2026
Indonesia government meets with palm oil farmers to address concerns about falling prices
JAKARTA, May 29 (Reuters) - The Indonesian government met with palm oil farmer groups on Friday to address concerns about a steep decline in the prices of fresh fruit bunches (FFB), which farmers say was caused by uncertainties about a new plan to funnel all palm oil exports through a state agency.
Palm farmers complained earlier this week that after the policy to centralise exports was announced, many FFB collection points shut down, causing prices at the farmers level to collapse.
Deputy Agriculture Minister Sudaryono told reporters after meeting palm oil groups on Friday that the central government is asking local authorities to ensure that FFB pricing complies with the rules.
"We ask regional heads to actively monitor the purchase price of fresh fruit bunches (FFB) and ensure that palm oil mills in their regions purchase FFB in accordance (with the regulations)," he said.
He said during the transition period, the export business will continue as usual for refiners, and will not be disrupted.
PT Danantara Sumberdaya Indonesia, the state company through which all palm oil shipments will be channeled, will also conduct export business with transparency and accountability, Sudaryono said.
Reporting by Fransiska Nangoy, Stanley Widianto; Editing by David Stanway
Our Standards: The Thomson Reuters Trust Principles.
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Agriculture Ministry warns palm oil mills buying below benchmark price
JAKARTA — The Ministry of Agriculture has threatened to impose sanctions on palm oil mills purchasing Fresh Fruit Bunches (FFB) below benchmark prices.
The warning follows findings by the ministry that 139 companies had been proven to purchase FFB at prices below official regional benchmarks.
Deputy Agriculture Minister Sudaryono said 16 palm oil mills had raised their purchase prices after the government held a coordination meeting with palm oil industry players.
However, he said many companies had yet to adjust their prices in line with regional regulations.
“We have identified 139 palm oil mills carrying out purchases below the prices set in their respective regions,” Sudaryono said at a press conference following the Coordination Meeting on Fresh Fruit Bunch Price Stabilisation in Jakarta on Friday (29/5).
Sudaryono added that falling FFB prices at the farmer level were not aligned with global market conditions, as palm oil prices and global demand had not declined and were instead tending to rise.
“There has been no change downstream, while upstream there has been turbulence in the form of low-priced FFB purchases,” he said.
As a result, Sudaryono said the government is urging governors, regents, mayors and related agencies to implement the Agriculture Minister Regulation governing the pricing framework for FFB sales.
He noted that only a number of provinces had actively set FFB prices involving local governments, palm oil mills and relevant associations.
Regional governments have also been asked to monitor FFB purchase prices by palm oil mills and identify companies buying below regulations, including affiliated businesses.
“If there are violations of activities regulated under the ministerial regulation, there will of course be administrative sanctions and even licence revocations,” Sudaryono added.
The Agriculture Ministry will also coordinate with the Food Task Force if indications of legal violations are found in palm oil trading practices that contribute to lower FFB prices at the farmer level. (KR/ZH)
https://www.idnfinancials.com/news/64242/agriculture-ministry-warns-palm-oil-mills-buying-below-benchmark-price#:~:text=%E2%80%9CWe%20have%20identified,level.%20(KR/ZH)
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Indonesia's Palm Oil Firms Await New Export Regulation Details
TEMPO.CO, Jakarta - Three companies in Indonesia’s palm oil industry said they are still waiting for implementing regulations following the government’s issuance of a new policy on natural resource export governance, which appoints PT Danantara Sumberdaya Indonesia (DSI) as the sole exporter of palm oil, coal, and ferroalloy commodities.
“The company is still waiting for the issuance of the Government Regulation on the Governance of Natural Resource Exports and its implementing regulations, so we cannot yet determine the impact of the policy or formulate mitigation strategies,” Corporate Secretary of PT Salim Ivomas Pratama Tbk. (SIMP), Meyke Ayuningrum, said in a disclosure to the Indonesia Stock Exchange (IDX) on Tuesday, May 26, 2026.
Similar statements were also issued by PT PP London Sumatra Indonesia Tbk. (LSPP) and PT Sinar Mas Agro Resources and Technology Tbk. (SMAR) through disclosures to the IDX. The three companies, which export processed palm oil products, said they were still awaiting details of the new regulation.
SMAR Deputy Chief Executive Officer Gianto Widjaja said the company would first study the policy comprehensively before taking further steps. After the implementing regulations are issued, management will prepare the necessary adjustments.
“And maintain the company’s long-term sustainability,” Gianto said.
President Prabowo Subianto previously introduced the single-door export policy through a state-controlled export body during a plenary session at the parliament complex in Jakarta on May 20, 2026. PT DSI was later established as a state-owned enterprise tasked with handling exports of the three commodities.
“In other words, the proceeds from each export sale will be distributed by the state-owned enterprise appointed by the government to the business actors managing the operations. This can be seen as a marketing facility,” Prabowo said.
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Palm Oil and Coal Sectors Fear Fallout From Indonesia’s New Export Regime
Jayanty Nada Shofa & Ria Fortuna Wijaya Jakarta Globe
Jakarta. Businesses and economists are warning that the government’s planned one-gate export system could disrupt trade flows for the country’s major commodity sectors, despite official assurances that the policy will improve transparency and oversight.
President Prabowo Subianto has decided to centralize exports of strategic commodities under a single state-controlled entity, the newly established Danantara Sumberdaya Indonesia (DSI). The policy will initially cover palm oil, coal, and ferroalloys.
Under the transition phase scheduled to begin next week, exporters will only be required to report sales to DSI. By early 2027, the agency -- led by Australian businessman Luke Thomas Mahony -- is expected to gradually assume control over the entire export chain, including payments and shipping arrangements.
The announcement has surprised industry players, particularly in the palm oil sector, where Indonesia accounts for roughly 60% of global supply. Palm oil farmers’ association POPSI said the existing supply chain was already excessively long, with smallholders bearing the brunt of declining prices for fresh fruit bunches (FFBs), the raw material used in palm oil production.
“DSI’s presence will only lengthen the supply chain and increase pressure on FFB prices,” POPSI chairman Mansuetus Darto said.
Darto argued that DSI should focus on regulation and oversight rather than becoming the sole controller of exports. He instead proposed a digital monitoring platform that would allow the government to combat under-invoicing without adding layers of bureaucracy.
Farmers are also concerned about the government’s proposal to release payments only after international transactions are completed, while simultaneously requiring exporters to keep their foreign-exchange earnings onshore for at least one year. Industry groups warn that the policy could squeeze working capital and delay payments to farmers.
Rumor-Based Policy?
The Indonesian Coal Suppliers Association (Aspebindo) said the private sector had received little information about the policy’s technical details. Aspebindo chairman Anggawira criticized the government’s justification for the initiative, particularly claims that under-invoicing practices had cost the country $908 billion over the past three decades.
“If such practices exist, they should first be proven. These figures sound excessively bombastic,” Anggawira said.
“Companies that have operated properly should be invited to discuss the best possible format. Until now, we still have no clear information about the technical implementation.”
University of Indonesia economist Rizki Nauli Siregar said policymakers risked targeting the wrong problem.
“If the issue is under-invoicing, then address under-invoicing directly. If the issue is transfer pricing, then we should understand why companies resort to transfer pricing,” she said. “We are asking exporters to run, but then shooting them in the leg.”
Rizki questioned whether DSI could realistically replace the international trade networks that exporters had spent years building. She noted that Indonesian exporters face significantly higher overseas selling costs than competitors in neighboring Malaysia.
According to Rizki, the cost of exporting Indonesian palm oil can reach 36% of export value, compared with around 6% in Malaysia.
“The key question now is whether the current DSI model can continue supporting business dynamism,” she said.
Inevitable Cost
Senior economist Aviliani urged the government to focus enforcement efforts only on companies proven to have engaged in under-invoicing, rather than imposing sweeping measures across entire industries.
Disruptions to major export commodities could weaken Indonesia’s foreign-exchange earnings, she warned, particularly as the country lacks alternative sectors capable of generating export revenues on a similar scale.
“If everything has to go through a single channel, additional costs will inevitably emerge,” Aviliani said.
Coal and palm oil have been among the main drivers of Indonesia’s exports, helping the country maintain a trade surplus for 71 consecutive months since May 2020.
Official data showed coal exports fell nearly 12% year-on-year to $5.5 billion in the first quarter of 2026, while palm oil exports reached $9.6 billion during the same period, according to industry association Gapki.
Despite the approaching trial period, key details of the policy remain unresolved.
Deputy Agriculture Minister Sudaryono said DSI would not charge transaction fees or seek profits from export activities. However, Danantara chief investment officer Pandu Sjahrir later said discussions were still ongoing regarding how the agency would generate revenue, while noting that investment funds “typically pursue profit.”
Danantara has pledged to honor existing long-term contracts.
“At the beginning, DSI will act as a business agent. Its role will gradually expand as we strengthen the capabilities of its human capital,” Pandu said, adding that the agency planned to recruit expatriate professionals for the export body.
“The idea of centralizing exports into a single function is not unique. It has worked elsewhere. The challenge lies in the execution, not the concept itself.”
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SGX-listed palm oil players under pressure as Indonesia’s commodity export overhaul stokes fears
Companies face heightened regulatory risks and the scale of policy roll-out poses execution hurdles: analysts
Benicia Tan Business Times SG
Published Fri, May 29, 2026 · 07:00 AM
[SINGAPORE] Shares of Singapore Exchange (SGX)-listed palm oil players have come under pressure after Indonesia unveiled plans to centralise exports of key natural resources through a state-owned enterprise.
The move has raised fresh concerns over policy risks for plantation firms with exposure to the country.
Even as analysts remain constructive on crude palm oil (CPO) prices amid tightening global supply, they warned that Indonesia’s latest move could weigh on valuations and cloud the outlook for regional planters.
Industry observers noted that Jakarta’s efforts to tighten control over strategic commodity flows are aimed at increasing state revenue and curbing under-invoicing.
Indonesia is the world’s largest exporter of coal, palm oil and ferronickel, and President Prabowo Subianto is pushing for tighter state control over those flows.
Nirgunan Tiruchelvam, head of consumer and Internet at Aletheia Capital, said the policy reflects an ambition to establish regional price-setting authority.
“Indonesia aims to shift pricing leverage away from major importing nations like China, India and Japan,” he said, comparing the strategy with market management mechanisms used by Opec.
He added that Jakarta’s latest move is a bid to retain a larger share of the CPO processing value chain within the domestic economy.
Between May 20 – when the announcement was made – and May 28, the shares of SGX-listed palm oil players with operations in Indonesia retreated. Bumitama Agri : P8Z +1.97% led the pack with a 12.1 per cent decline.
Uneven impact
The impact of Jakarta’s latest move is expected to vary among SGX-listed planters, depending on their level of export exposure.
“The regulations may erode Indonesian exporters’ bargaining power and margins, although a meaningful tightening in supply could see higher global palm oil prices partially offsetting earnings pressure,” said OCBC analysts Ada Lim and Chu Peng.
“More broadly, the pace and unpredictability of regulatory changes in Indonesia raise concerns, pointing to an elevated regulatory risk environment.”
The analysts noted that domestic players such as Bumitama Agri, which sources 100 per cent of its revenue from Indonesia, face limited direct impact from the policy.
However, they flagged a tail risk that the policy could indirectly affect domestic pricing.
If producers are required to sell to the state-owned enterprise below market prices, domestic end-consumers may also seek lower purchase prices from plantations, noted the analysts.
“It is not clear if the policy will eventually extend to downstream derivative products; if downstream products are in scope, then this provides end-customers with an even greater incentive to lower purchase prices to offset potential margin compression,” they said.
Golden Agri-Resources : E5H +1.85%’ greater exposure to upstream palm oil operations and sensitivity to CPO price movement makes it “more sensitive to changes in export dynamics”, with tighter controls “likely to put added pressure on its margins”, said Chu and Lim.
Separately, Indonesian authorities are investigating 10 CPO exporters, including Wilmar International : F34 +5.9%, for allegedly engaging in under-invoicing and transfer-pricing practices.
“The development comes at a sensitive time, with reputational risks likely to weigh on investor sentiment,” said the OCBC analysts.
But they noted that Wilmar’s integrated business model and scale “could provide some cushion relative to smaller peers”.
Amanda Foo, an analyst at Macquarie Equity Research, similarly noted that while the Indonesian government’s exact plans for implementation remain unclear, “the risk of potential interventions… warrants a higher risk premium for Indonesia-exposed planters”.
Potential interventions could include tighter export monitoring, domestic market obligation-style mechanisms and temporary price controls, she added.
Taking these risks into account, Macquarie lowered its price target on Bumitama Agri by 14 per cent to S$1.98 from S$2.30.
It also cut its price target on First Resources by 14 per cent to S$3.35 from S$3.90, and reduced Wilmar’s price target by 3 per cent to S$3.90 from S$4.
Meanwhile, the research house maintained its “outperform” rating on Bumitama Agri and First Resources given their “strong upstream leverage and operational quality”.
Foo, however, noted that their “concentrated Indonesia exposure leaves valuations more vulnerable to potential policy interventions”.
Macquarie rated Wilmar as “neutral” due to its “comparatively lower direct leverage to higher CPO prices and greater exposure to evolving regulatory risks across multiple jurisdictions”.
Resource nationalism gaining traction globally
OCBC’s analysts noted that resource nationalism has been gaining traction globally, partly in response to geopolitics.
For example, the Democratic Republic of the Congo banned cobalt exports in February 2025 to stem an oversupply-driven price slump.
China also reduced its rare earth mineral export quotas by 40 per cent in 2020 on the premise that market prices were undervalued, and further expanded controls in 2025 by requiring government approval for exports.
In these cases, export policies were used to restrict supply, causing a sharp and sustained price surge.
“Indonesia’s policy is framed as an anti-fraud measure rather than volume restriction, making the direct price impact less certain,” said the OCBC analysts.
The scale of Indonesia’s policy is broader, targeting multiple commodities at once, which amplifies investor uncertainty and could complicate ground-level execution, they added.
Lakshmanan R, senior director and head of South and South-east Asia corporates research at CreditSights, also drew comparisons with Opec.
He noted similarities in “centralised pricing power and supply control, state capturing more value from within the chain, and strategic use of exports for achieving macro goals”.
However, there is a key structural difference: “Opec has a few concentrated players, so it is easy to execute. But in Indonesia these commodity sectors are fragmented with several private players, so the implementation, coordination and supply chain will be much harder.”
Hurdles to implementation
Industry observers noted that the scale and timeline of the policy present implementation challenges.
Oriano Lizza, a sales trader at CMC Markets, said: “Jakarta is betting it can repeat the nickel playbook.”
He noted that the value of Indonesia’s nickel export earnings have grown 10 times since 2013, stabilising above US$30 billion in 2022 after an export ban on nickel was implemented in 2020.
But he said that the analogy breaks down on three fronts.
First, this policy covers CPO, coal and ferroalloys simultaneously funnelling US$65 billion in annual export value through a single, untested state-owned enterprise.
Second, the plan calls for a three-month transition to full centralisation by September 2026. In contrast, the nickel ban followed years of gradual signalling, he said.
Lastly, he flagged the context in which this policy is being rolled out. The Indonesian rupiah hit an all-time low of 17,706 rupiah to US$1 on the day of the announcement, while the Jakarta Composite Index was down more than 26 per cent in the year to date.
“Indonesia is attempting a nickel-style transformation across three commodity classes, but without the industrial policy scaffolding that made nickel work,” he said.
Aletheia Capital’s Tiruchelvam said that it will be “very difficult” for these measures to completely change how palm oil prices are set. Because the palm oil market is structurally moving towards a shortage, prices are likely to see a strong rally regardless, he added.
“It’s difficult to say at this point. What they need to spell out is the exact nature of this (state-owned enterprise), how long and what the mandate is, because at this point we are just relying on broad statements, so we need more clarity.”
He said that while there are precedents of countries setting up similar organisations, there are very few instances of a player of this scale – which dominates palm oil, ferronickel and coal – suddenly creating a common board for exports.
“Each commodity has its own nuance, its own set of intermediaries, and it’s very difficult for them to change the way commodities are traded purely by creating this agency that’s going to centralise things,” he added.
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Singapore-listed Wilmar shares dive most in 6 years on Indonesia probe
SINGAPORE - Wilmar International’s Singapore-listed shares fell the most in almost six years after the Indonesian government named the palm oil titan as one of the companies being probed for suspected export abuses.
The stock slid as much as 10.5 per cent on May 28, the biggest intraday drop since 2020, before paring losses to stand 4 per cent lower at $3.38 at the midday trading break. A hefty 11.85 million shares had changed hands.
Wilmar, the world’s biggest palm oil refiner with plantations in Indonesia, and Musim Mas Group, are among 10 palm producers being investigated for suspected under-invoicing and transfer pricing of exports, Finance Minister Purbaya Yudhi Sadewa told reporters in Jakarta on May 26. Those practices were among the reasons President Prabowo Subianto gave last week when he said the government would take greater control of the country’s key commodity exports.
In a filing with the Singapore Exchange during the midday trading break on May 28, Wilmar said it has “not received official notification of the probe but is working with the relevant authorities to understand their concerns”.
The company will update the market accordingly if and when it receives official notification, it added.
The fresh probe spells more challenges for Wilmar in Indonesia. The company in 2025 had to relinquish a 11.8 trillion rupiah deposit – valued at the time at S$927 million – to the Attorney-General’s Office as part of a separate probe related to palm oil exports. Wilmar said it is preparing to release a statement later on May 28 to address the matter. The Straits Times
Indonesia government meets with palm oil farmers to address concerns about falling prices
JAKARTA, May 29 (Reuters) - The Indonesian government met with palm oil farmer groups on Friday to address concerns about a steep decline in the prices of fresh fruit bunches (FFB), which farmers say was caused by uncertainties about a new plan to funnel all palm oil exports through a state agency.
Palm farmers complained earlier this week that after the policy to centralise exports was announced, many FFB collection points shut down, causing prices at the farmers level to collapse.
Deputy Agriculture Minister Sudaryono told reporters after meeting palm oil groups on Friday that the central government is asking local authorities to ensure that FFB pricing complies with the rules.
"We ask regional heads to actively monitor the purchase price of fresh fruit bunches (FFB) and ensure that palm oil mills in their regions purchase FFB in accordance (with the regulations)," he said.
He said during the transition period, the export business will continue as usual for refiners, and will not be disrupted.
PT Danantara Sumberdaya Indonesia, the state company through which all palm oil shipments will be channeled, will also conduct export business with transparency and accountability, Sudaryono said.
Reporting by Fransiska Nangoy, Stanley Widianto; Editing by David Stanway
Our Standards: The Thomson Reuters Trust Principles.
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Agriculture Ministry warns palm oil mills buying below benchmark price
JAKARTA — The Ministry of Agriculture has threatened to impose sanctions on palm oil mills purchasing Fresh Fruit Bunches (FFB) below benchmark prices.
The warning follows findings by the ministry that 139 companies had been proven to purchase FFB at prices below official regional benchmarks.
Deputy Agriculture Minister Sudaryono said 16 palm oil mills had raised their purchase prices after the government held a coordination meeting with palm oil industry players.
However, he said many companies had yet to adjust their prices in line with regional regulations.
“We have identified 139 palm oil mills carrying out purchases below the prices set in their respective regions,” Sudaryono said at a press conference following the Coordination Meeting on Fresh Fruit Bunch Price Stabilisation in Jakarta on Friday (29/5).
Sudaryono added that falling FFB prices at the farmer level were not aligned with global market conditions, as palm oil prices and global demand had not declined and were instead tending to rise.
“There has been no change downstream, while upstream there has been turbulence in the form of low-priced FFB purchases,” he said.
As a result, Sudaryono said the government is urging governors, regents, mayors and related agencies to implement the Agriculture Minister Regulation governing the pricing framework for FFB sales.
He noted that only a number of provinces had actively set FFB prices involving local governments, palm oil mills and relevant associations.
Regional governments have also been asked to monitor FFB purchase prices by palm oil mills and identify companies buying below regulations, including affiliated businesses.
“If there are violations of activities regulated under the ministerial regulation, there will of course be administrative sanctions and even licence revocations,” Sudaryono added.
The Agriculture Ministry will also coordinate with the Food Task Force if indications of legal violations are found in palm oil trading practices that contribute to lower FFB prices at the farmer level. (KR/ZH)
https://www.idnfinancials.com/news/64242/agriculture-ministry-warns-palm-oil-mills-buying-below-benchmark-price#:~:text=%E2%80%9CWe%20have%20identified,level.%20(KR/ZH)
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Indonesia's Palm Oil Firms Await New Export Regulation Details
TEMPO.CO, Jakarta - Three companies in Indonesia’s palm oil industry said they are still waiting for implementing regulations following the government’s issuance of a new policy on natural resource export governance, which appoints PT Danantara Sumberdaya Indonesia (DSI) as the sole exporter of palm oil, coal, and ferroalloy commodities.
“The company is still waiting for the issuance of the Government Regulation on the Governance of Natural Resource Exports and its implementing regulations, so we cannot yet determine the impact of the policy or formulate mitigation strategies,” Corporate Secretary of PT Salim Ivomas Pratama Tbk. (SIMP), Meyke Ayuningrum, said in a disclosure to the Indonesia Stock Exchange (IDX) on Tuesday, May 26, 2026.
Similar statements were also issued by PT PP London Sumatra Indonesia Tbk. (LSPP) and PT Sinar Mas Agro Resources and Technology Tbk. (SMAR) through disclosures to the IDX. The three companies, which export processed palm oil products, said they were still awaiting details of the new regulation.
SMAR Deputy Chief Executive Officer Gianto Widjaja said the company would first study the policy comprehensively before taking further steps. After the implementing regulations are issued, management will prepare the necessary adjustments.
“And maintain the company’s long-term sustainability,” Gianto said.
President Prabowo Subianto previously introduced the single-door export policy through a state-controlled export body during a plenary session at the parliament complex in Jakarta on May 20, 2026. PT DSI was later established as a state-owned enterprise tasked with handling exports of the three commodities.
“In other words, the proceeds from each export sale will be distributed by the state-owned enterprise appointed by the government to the business actors managing the operations. This can be seen as a marketing facility,” Prabowo said.
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Palm Oil and Coal Sectors Fear Fallout From Indonesia’s New Export Regime
Jayanty Nada Shofa & Ria Fortuna Wijaya Jakarta Globe
Jakarta. Businesses and economists are warning that the government’s planned one-gate export system could disrupt trade flows for the country’s major commodity sectors, despite official assurances that the policy will improve transparency and oversight.
President Prabowo Subianto has decided to centralize exports of strategic commodities under a single state-controlled entity, the newly established Danantara Sumberdaya Indonesia (DSI). The policy will initially cover palm oil, coal, and ferroalloys.
Under the transition phase scheduled to begin next week, exporters will only be required to report sales to DSI. By early 2027, the agency -- led by Australian businessman Luke Thomas Mahony -- is expected to gradually assume control over the entire export chain, including payments and shipping arrangements.
The announcement has surprised industry players, particularly in the palm oil sector, where Indonesia accounts for roughly 60% of global supply. Palm oil farmers’ association POPSI said the existing supply chain was already excessively long, with smallholders bearing the brunt of declining prices for fresh fruit bunches (FFBs), the raw material used in palm oil production.
“DSI’s presence will only lengthen the supply chain and increase pressure on FFB prices,” POPSI chairman Mansuetus Darto said.
Darto argued that DSI should focus on regulation and oversight rather than becoming the sole controller of exports. He instead proposed a digital monitoring platform that would allow the government to combat under-invoicing without adding layers of bureaucracy.
Farmers are also concerned about the government’s proposal to release payments only after international transactions are completed, while simultaneously requiring exporters to keep their foreign-exchange earnings onshore for at least one year. Industry groups warn that the policy could squeeze working capital and delay payments to farmers.
Rumor-Based Policy?
The Indonesian Coal Suppliers Association (Aspebindo) said the private sector had received little information about the policy’s technical details. Aspebindo chairman Anggawira criticized the government’s justification for the initiative, particularly claims that under-invoicing practices had cost the country $908 billion over the past three decades.
“If such practices exist, they should first be proven. These figures sound excessively bombastic,” Anggawira said.
“Companies that have operated properly should be invited to discuss the best possible format. Until now, we still have no clear information about the technical implementation.”
University of Indonesia economist Rizki Nauli Siregar said policymakers risked targeting the wrong problem.
“If the issue is under-invoicing, then address under-invoicing directly. If the issue is transfer pricing, then we should understand why companies resort to transfer pricing,” she said. “We are asking exporters to run, but then shooting them in the leg.”
Rizki questioned whether DSI could realistically replace the international trade networks that exporters had spent years building. She noted that Indonesian exporters face significantly higher overseas selling costs than competitors in neighboring Malaysia.
According to Rizki, the cost of exporting Indonesian palm oil can reach 36% of export value, compared with around 6% in Malaysia.
“The key question now is whether the current DSI model can continue supporting business dynamism,” she said.
Inevitable Cost
Senior economist Aviliani urged the government to focus enforcement efforts only on companies proven to have engaged in under-invoicing, rather than imposing sweeping measures across entire industries.
Disruptions to major export commodities could weaken Indonesia’s foreign-exchange earnings, she warned, particularly as the country lacks alternative sectors capable of generating export revenues on a similar scale.
“If everything has to go through a single channel, additional costs will inevitably emerge,” Aviliani said.
Coal and palm oil have been among the main drivers of Indonesia’s exports, helping the country maintain a trade surplus for 71 consecutive months since May 2020.
Official data showed coal exports fell nearly 12% year-on-year to $5.5 billion in the first quarter of 2026, while palm oil exports reached $9.6 billion during the same period, according to industry association Gapki.
Despite the approaching trial period, key details of the policy remain unresolved.
Deputy Agriculture Minister Sudaryono said DSI would not charge transaction fees or seek profits from export activities. However, Danantara chief investment officer Pandu Sjahrir later said discussions were still ongoing regarding how the agency would generate revenue, while noting that investment funds “typically pursue profit.”
Danantara has pledged to honor existing long-term contracts.
“At the beginning, DSI will act as a business agent. Its role will gradually expand as we strengthen the capabilities of its human capital,” Pandu said, adding that the agency planned to recruit expatriate professionals for the export body.
“The idea of centralizing exports into a single function is not unique. It has worked elsewhere. The challenge lies in the execution, not the concept itself.”
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SGX-listed palm oil players under pressure as Indonesia’s commodity export overhaul stokes fears
Companies face heightened regulatory risks and the scale of policy roll-out poses execution hurdles: analysts
Benicia Tan Business Times SG
Published Fri, May 29, 2026 · 07:00 AM
[SINGAPORE] Shares of Singapore Exchange (SGX)-listed palm oil players have come under pressure after Indonesia unveiled plans to centralise exports of key natural resources through a state-owned enterprise.
The move has raised fresh concerns over policy risks for plantation firms with exposure to the country.
Even as analysts remain constructive on crude palm oil (CPO) prices amid tightening global supply, they warned that Indonesia’s latest move could weigh on valuations and cloud the outlook for regional planters.
Industry observers noted that Jakarta’s efforts to tighten control over strategic commodity flows are aimed at increasing state revenue and curbing under-invoicing.
Indonesia is the world’s largest exporter of coal, palm oil and ferronickel, and President Prabowo Subianto is pushing for tighter state control over those flows.
Nirgunan Tiruchelvam, head of consumer and Internet at Aletheia Capital, said the policy reflects an ambition to establish regional price-setting authority.
“Indonesia aims to shift pricing leverage away from major importing nations like China, India and Japan,” he said, comparing the strategy with market management mechanisms used by Opec.
He added that Jakarta’s latest move is a bid to retain a larger share of the CPO processing value chain within the domestic economy.
Between May 20 – when the announcement was made – and May 28, the shares of SGX-listed palm oil players with operations in Indonesia retreated. Bumitama Agri : P8Z +1.97% led the pack with a 12.1 per cent decline.
Uneven impact
The impact of Jakarta’s latest move is expected to vary among SGX-listed planters, depending on their level of export exposure.
“The regulations may erode Indonesian exporters’ bargaining power and margins, although a meaningful tightening in supply could see higher global palm oil prices partially offsetting earnings pressure,” said OCBC analysts Ada Lim and Chu Peng.
“More broadly, the pace and unpredictability of regulatory changes in Indonesia raise concerns, pointing to an elevated regulatory risk environment.”
The analysts noted that domestic players such as Bumitama Agri, which sources 100 per cent of its revenue from Indonesia, face limited direct impact from the policy.
However, they flagged a tail risk that the policy could indirectly affect domestic pricing.
If producers are required to sell to the state-owned enterprise below market prices, domestic end-consumers may also seek lower purchase prices from plantations, noted the analysts.
“It is not clear if the policy will eventually extend to downstream derivative products; if downstream products are in scope, then this provides end-customers with an even greater incentive to lower purchase prices to offset potential margin compression,” they said.
Golden Agri-Resources : E5H +1.85%’ greater exposure to upstream palm oil operations and sensitivity to CPO price movement makes it “more sensitive to changes in export dynamics”, with tighter controls “likely to put added pressure on its margins”, said Chu and Lim.
Separately, Indonesian authorities are investigating 10 CPO exporters, including Wilmar International : F34 +5.9%, for allegedly engaging in under-invoicing and transfer-pricing practices.
“The development comes at a sensitive time, with reputational risks likely to weigh on investor sentiment,” said the OCBC analysts.
But they noted that Wilmar’s integrated business model and scale “could provide some cushion relative to smaller peers”.
Amanda Foo, an analyst at Macquarie Equity Research, similarly noted that while the Indonesian government’s exact plans for implementation remain unclear, “the risk of potential interventions… warrants a higher risk premium for Indonesia-exposed planters”.
Potential interventions could include tighter export monitoring, domestic market obligation-style mechanisms and temporary price controls, she added.
Taking these risks into account, Macquarie lowered its price target on Bumitama Agri by 14 per cent to S$1.98 from S$2.30.
It also cut its price target on First Resources by 14 per cent to S$3.35 from S$3.90, and reduced Wilmar’s price target by 3 per cent to S$3.90 from S$4.
Meanwhile, the research house maintained its “outperform” rating on Bumitama Agri and First Resources given their “strong upstream leverage and operational quality”.
Foo, however, noted that their “concentrated Indonesia exposure leaves valuations more vulnerable to potential policy interventions”.
Macquarie rated Wilmar as “neutral” due to its “comparatively lower direct leverage to higher CPO prices and greater exposure to evolving regulatory risks across multiple jurisdictions”.
Resource nationalism gaining traction globally
OCBC’s analysts noted that resource nationalism has been gaining traction globally, partly in response to geopolitics.
For example, the Democratic Republic of the Congo banned cobalt exports in February 2025 to stem an oversupply-driven price slump.
China also reduced its rare earth mineral export quotas by 40 per cent in 2020 on the premise that market prices were undervalued, and further expanded controls in 2025 by requiring government approval for exports.
In these cases, export policies were used to restrict supply, causing a sharp and sustained price surge.
“Indonesia’s policy is framed as an anti-fraud measure rather than volume restriction, making the direct price impact less certain,” said the OCBC analysts.
The scale of Indonesia’s policy is broader, targeting multiple commodities at once, which amplifies investor uncertainty and could complicate ground-level execution, they added.
Lakshmanan R, senior director and head of South and South-east Asia corporates research at CreditSights, also drew comparisons with Opec.
He noted similarities in “centralised pricing power and supply control, state capturing more value from within the chain, and strategic use of exports for achieving macro goals”.
However, there is a key structural difference: “Opec has a few concentrated players, so it is easy to execute. But in Indonesia these commodity sectors are fragmented with several private players, so the implementation, coordination and supply chain will be much harder.”
Hurdles to implementation
Industry observers noted that the scale and timeline of the policy present implementation challenges.
Oriano Lizza, a sales trader at CMC Markets, said: “Jakarta is betting it can repeat the nickel playbook.”
He noted that the value of Indonesia’s nickel export earnings have grown 10 times since 2013, stabilising above US$30 billion in 2022 after an export ban on nickel was implemented in 2020.
But he said that the analogy breaks down on three fronts.
First, this policy covers CPO, coal and ferroalloys simultaneously funnelling US$65 billion in annual export value through a single, untested state-owned enterprise.
Second, the plan calls for a three-month transition to full centralisation by September 2026. In contrast, the nickel ban followed years of gradual signalling, he said.
Lastly, he flagged the context in which this policy is being rolled out. The Indonesian rupiah hit an all-time low of 17,706 rupiah to US$1 on the day of the announcement, while the Jakarta Composite Index was down more than 26 per cent in the year to date.
“Indonesia is attempting a nickel-style transformation across three commodity classes, but without the industrial policy scaffolding that made nickel work,” he said.
Aletheia Capital’s Tiruchelvam said that it will be “very difficult” for these measures to completely change how palm oil prices are set. Because the palm oil market is structurally moving towards a shortage, prices are likely to see a strong rally regardless, he added.
“It’s difficult to say at this point. What they need to spell out is the exact nature of this (state-owned enterprise), how long and what the mandate is, because at this point we are just relying on broad statements, so we need more clarity.”
He said that while there are precedents of countries setting up similar organisations, there are very few instances of a player of this scale – which dominates palm oil, ferronickel and coal – suddenly creating a common board for exports.
“Each commodity has its own nuance, its own set of intermediaries, and it’s very difficult for them to change the way commodities are traded purely by creating this agency that’s going to centralise things,” he added.
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Singapore-listed Wilmar shares dive most in 6 years on Indonesia probe
SINGAPORE - Wilmar International’s Singapore-listed shares fell the most in almost six years after the Indonesian government named the palm oil titan as one of the companies being probed for suspected export abuses.
The stock slid as much as 10.5 per cent on May 28, the biggest intraday drop since 2020, before paring losses to stand 4 per cent lower at $3.38 at the midday trading break. A hefty 11.85 million shares had changed hands.
Wilmar, the world’s biggest palm oil refiner with plantations in Indonesia, and Musim Mas Group, are among 10 palm producers being investigated for suspected under-invoicing and transfer pricing of exports, Finance Minister Purbaya Yudhi Sadewa told reporters in Jakarta on May 26. Those practices were among the reasons President Prabowo Subianto gave last week when he said the government would take greater control of the country’s key commodity exports.
In a filing with the Singapore Exchange during the midday trading break on May 28, Wilmar said it has “not received official notification of the probe but is working with the relevant authorities to understand their concerns”.
The company will update the market accordingly if and when it receives official notification, it added.
The fresh probe spells more challenges for Wilmar in Indonesia. The company in 2025 had to relinquish a 11.8 trillion rupiah deposit – valued at the time at S$927 million – to the Attorney-General’s Office as part of a separate probe related to palm oil exports. Wilmar said it is preparing to release a statement later on May 28 to address the matter. The Straits Times
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May 28, 2026
Indonesia’s commodity clout in numbers
Elisa Valenta/ Business TimesSG
The export revamp by South-east Asia’s largest economy might shake up the industry’s global supply chain
[JAKARTA] Indonesia’s plan to centralise exports of key commodities under a state-controlled entity is shining a spotlight on just how deeply the world depends on the country’s coal, palm oil and minerals.
From power plants in China and India to cooking oil across South Asia, Indonesian commodities sit at the heart of global supply chains.
Now, President Prabowo Subianto is pushing for tighter state control over those flows, arguing that Indonesia has lost billions of dollars through under-invoicing and offshore trading structures – a move that has shocked investors and global commodity traders.
The policy will initially target coal, crude palm oil (CPO) and ferroalloys, sectors worth tens of billions of dollars annually and long characterised by complex trading ecosystems involving producers, traders, refiners and offshore intermediaries.
Here is what the policy means in numbers, sectors and market exposure.
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Palm oil titan Wilmar dives most in six years on Indonesia probe
Anuradha Raghu / Bloomberg
(May 28): Wilmar International Ltd fell the most in almost six years after the Indonesian government named the palm oil titan as one of the companies being probed for suspected export abuses.
Shares traded in Singapore slid as much as 11% on Thursday, the biggest intraday drop since 2020, before paring losses to trade at $3.38 a piece by 12.36pm local time.
Wilmar, the world’s biggest palm oil refiner with plantations in Indonesia, and Musim Mas Group, are among 10 palm producers being investigated for suspected under-invoicing and transfer pricing of exports, Finance Minister Purbaya Yudhi Sadewa told reporters in Jakarta on Tuesday. Those practices were among the reasons President Prabowo Subianto gave last week when he said the government would take greater control of the country’s key commodity exports.
The fresh probe spells more challenges for Wilmar in Indonesia. The company last year had to relinquish a 12 trillion rupiah deposit — valued at the time at US$729 million — to the Attorney General’s Office as part of a separate probe related to palm oil exports.
Wilmar said in a statement it has not received official notification regarding the investigation, but is “working with the relevant authorities to understand their concerns” and will update the market if it receives the official notice.
Prabowo’s announcement has rattled investors and whipsawed the palm market, with industry participants desperate for more clarity on how the new export framework would work. Indonesian state-linked crude palm oil tenders, which serve as a benchmark for domestic prices and export offers, have ground to a halt since the announcement, while several processors have avoided buying fruit from small farmers while they wait for more clarity.
See also: Oil palm fruit left to rot as Indonesia export revamp hits farmers
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Wilmar Shares Plunge On Indonesia Export Probe
Shares of Wilmar International Ltd tumbled as much as 11% on May 28, marking the steepest intraday decline in almost six years, after Indonesian authorities named the palm oil giant among companies being investigated for suspected export abuses, Bloomberg reported.
The Singapore-listed stock later pared some losses to trade at S$3.45 by 9:45am local time, while trading volume surged to nine times the 20-day average for the period.
Indonesia’s Finance Minister Purbaya Yudhi Sadewa said Wilmar and Musim Mas Group were among 10 palm oil producers being probed for alleged under-invoicing and transfer pricing involving exports. The investigation comes as President Prabowo Subianto pushes for tighter state control over the country’s key commodity exports.
The latest probe adds to Wilmar’s regulatory challenges in Indonesia. Last year, the company forfeited a 12 trillion rupiah deposit to the Attorney General’s Office in connection with a separate palm oil export investigation.
Wilmar said it would issue a statement later regarding the matter.
Prabowo’s plans for a new export framework have unsettled investors and disrupted the palm oil market, with uncertainty over implementation causing state-linked crude palm oil tenders to stall. Several processors have also reportedly delayed purchases from smallholders while awaiting clearer policy direction. https://www.businesstoday.com.my/2026/05/28/wilmar-shares-plunge-on-indonesia-export-probe/
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Indonesia’s commodity clout in numbers
Elisa Valenta/ Business TimesSG
The export revamp by South-east Asia’s largest economy might shake up the industry’s global supply chain
[JAKARTA] Indonesia’s plan to centralise exports of key commodities under a state-controlled entity is shining a spotlight on just how deeply the world depends on the country’s coal, palm oil and minerals.
From power plants in China and India to cooking oil across South Asia, Indonesian commodities sit at the heart of global supply chains.
Now, President Prabowo Subianto is pushing for tighter state control over those flows, arguing that Indonesia has lost billions of dollars through under-invoicing and offshore trading structures – a move that has shocked investors and global commodity traders.
The policy will initially target coal, crude palm oil (CPO) and ferroalloys, sectors worth tens of billions of dollars annually and long characterised by complex trading ecosystems involving producers, traders, refiners and offshore intermediaries.
Here is what the policy means in numbers, sectors and market exposure.
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Palm oil titan Wilmar dives most in six years on Indonesia probe
Anuradha Raghu / Bloomberg
(May 28): Wilmar International Ltd fell the most in almost six years after the Indonesian government named the palm oil titan as one of the companies being probed for suspected export abuses.
Shares traded in Singapore slid as much as 11% on Thursday, the biggest intraday drop since 2020, before paring losses to trade at $3.38 a piece by 12.36pm local time.
Wilmar, the world’s biggest palm oil refiner with plantations in Indonesia, and Musim Mas Group, are among 10 palm producers being investigated for suspected under-invoicing and transfer pricing of exports, Finance Minister Purbaya Yudhi Sadewa told reporters in Jakarta on Tuesday. Those practices were among the reasons President Prabowo Subianto gave last week when he said the government would take greater control of the country’s key commodity exports.
The fresh probe spells more challenges for Wilmar in Indonesia. The company last year had to relinquish a 12 trillion rupiah deposit — valued at the time at US$729 million — to the Attorney General’s Office as part of a separate probe related to palm oil exports.
Wilmar said in a statement it has not received official notification regarding the investigation, but is “working with the relevant authorities to understand their concerns” and will update the market if it receives the official notice.
Prabowo’s announcement has rattled investors and whipsawed the palm market, with industry participants desperate for more clarity on how the new export framework would work. Indonesian state-linked crude palm oil tenders, which serve as a benchmark for domestic prices and export offers, have ground to a halt since the announcement, while several processors have avoided buying fruit from small farmers while they wait for more clarity.
See also: Oil palm fruit left to rot as Indonesia export revamp hits farmers
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Wilmar Shares Plunge On Indonesia Export Probe
Shares of Wilmar International Ltd tumbled as much as 11% on May 28, marking the steepest intraday decline in almost six years, after Indonesian authorities named the palm oil giant among companies being investigated for suspected export abuses, Bloomberg reported.
The Singapore-listed stock later pared some losses to trade at S$3.45 by 9:45am local time, while trading volume surged to nine times the 20-day average for the period.
Indonesia’s Finance Minister Purbaya Yudhi Sadewa said Wilmar and Musim Mas Group were among 10 palm oil producers being probed for alleged under-invoicing and transfer pricing involving exports. The investigation comes as President Prabowo Subianto pushes for tighter state control over the country’s key commodity exports.
The latest probe adds to Wilmar’s regulatory challenges in Indonesia. Last year, the company forfeited a 12 trillion rupiah deposit to the Attorney General’s Office in connection with a separate palm oil export investigation.
Wilmar said it would issue a statement later regarding the matter.
Prabowo’s plans for a new export framework have unsettled investors and disrupted the palm oil market, with uncertainty over implementation causing state-linked crude palm oil tenders to stall. Several processors have also reportedly delayed purchases from smallholders while awaiting clearer policy direction. https://www.businesstoday.com.my/2026/05/28/wilmar-shares-plunge-on-indonesia-export-probe/
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May 27, 2026
Indonesia probes Musim Mas, Wilmar for 'under-invoicing' of exports, finance minister says
By Reuters
JAKARTA, May 26 (Reuters) - Indonesia's finance minister said on Tuesday that Wilmar International Limited and the Musim Mas Group are among the palm oil companies now being probed for suspected "under-invoicing" of exports.
Here are the details:
Reporting by Dewi Kurniawati; Editing by David Stanway
https://www.reuters.com/world/asia-pacific/indonesia-probes-musim-mas-wilmar-under-invoicing-exports-finance-minister-says-2026-05-26/
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Prabowo’s Crackdown on Palm Oil Export ‘Leakages’ Hits Musim Mas, Wilmar Units, Raising Investor Questions
Key Takeaways
●Indonesia’s government confirmed subsidiaries linked to Musim Mas and Wilmar are under investigation for alleged export under-invoicing.
●President Prabowo Subianto claims Indonesia lost as much as $900 billion over 34 years from trade manipulation and export leakages.
●The administration plans to centralize strategic commodity exports under a new Danantara-controlled entity to tighten oversight.
●Investors support stronger governance but are increasingly concerned about regulatory unpredictability and communication risks.
JAKARTA, Investortrust.id — Indonesia has named subsidiaries tied to palm oil giants Musim Mas and Wilmar as part of a widening criminal investigation into alleged export under-invoicing, marking the clearest sign yet that President Prabowo Subianto is escalating his campaign against what he calls decades of “leakages” in the country’s natural resource trade.
Finance Minister Purbaya Yudhi Sadewa said Tuesday that the Attorney General’s Office is investigating units linked to both groups over alleged manipulation of export invoices tied to crude palm oil, or CPO.
“Those two are correct. Both of them,” Purbaya said in Jakarta on Tuesday when asked whether subsidiaries of Musim Mas and Wilmar International were among the firms under investigation.
The probe is part of a broader investigation into 10 companies suspected of using under-invoicing and transfer pricing schemes involving affiliated trading firms in Singapore.
The crackdown strikes at the heart of Indonesia’s commodity-export model, where coal, palm oil, nickel and other resource shipments generate hundreds of billions of dollars annually.
For global investors, the case signals two competing narratives unfolding simultaneously in Southeast Asia’s largest economy.
On one side, Prabowo’s administration is attempting the most aggressive overhaul in years of commodity export governance, targeting alleged tax leakage, transfer pricing and offshore profit shifting that officials say deprived the country of massive revenues.
On the other, the public naming of major corporate groups before formal legal conclusions are reached is raising concerns among investors over regulatory certainty, due process, and the broader investment climate.
The market sensitivity is particularly acute because both Musim Mas and Wilmar are deeply embedded in global edible oils, food manufacturing and biofuel supply chains.
Purbaya alleged that exporters shipped commodities to affiliated trading companies in Singapore at artificially depressed prices before the goods were resold at significantly higher market values.
“We saw export prices from here to Singapore at only half the actual value,” he said. “There was under-invoicing, smuggling — around 50%.” https://investortrust.id/market/104531/prabowos-crackdown-on-palm-oil-export-leakages-hits-musim-mas-wilmar-units-raising-investor-questions?page=english-edition
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Indonesia's CPO Exports Plunge Across Nine Major Markets
TEMPO.CO, Jakarta - The Indonesian Palm Oil Association (Gapki) reported a monthly decline in Indonesia’s crude palm oil (CPO) production, domestic consumption, and exports in March 2026.
In a written statement issued on Monday, May 25, 2026, Gapki said CPO production in March reached 4.403 million tons, down 12.22 percent from 5.015 million tons recorded in February.
The association also reported a decline in processed palm kernel oil (PKO) production. PKO output fell 12.35 percent month-on-month to 418,000 tons in March 2026.
Total domestic consumption of palm oil products also weakened, declining 8.25 percent to 2.115 million tons in March from 2.305 million tons in February.
According to Gapki, the sharpest decline came from food consumption, which dropped 9.03 percent to 897,000 tons in March.
Biodiesel consumption also fell by 7.71 percent to 1.056 million tons, while oleochemical consumption decreased 7.43 percent to 162,000 tons.
Despite the monthly slowdown, Gapki said cumulative domestic consumption through March 2026 still posted annual growth of 7.47 percent, reaching 6.524 million tons.
Exports of palm oil products also saw a significant decline in March. Gapki recorded a 34.25 percent drop in total exports to 2.168 million tons, compared with 3.297 million tons in February 2026.
Exports of crude palm oil products fell the most sharply, plunging 75.61 percent in March. Total CPO export volume stood at 96,000 tons, down from 295,000 tons in February.
Processed PKO exports also declined by 33.57 percent to 1.506 million tons in March.
Oleochemicals were the only palm oil derivative products to post export growth. Oleochemical exports rose 1.42 percent month-on-month to 468,000 tons. On an annual basis, oleochemical exports increased 11.91 percent to 8.546 million tons.
Based on destination markets, Gapki reported export declines to nine major regions and countries.
Exports to China fell by 314,000 tons in March, while shipments to India declined by 291,000 tons. Exports to Pakistan dropped by 113,000 tons, followed by Bangladesh with a decline of 90,000 tons. https://en.tempo.co/read/2105673/indonesias-cpo-exports-plunge-across-nine-major-markets
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Indonesia probes Musim Mas, Wilmar for 'under-invoicing' of exports, finance minister says
By Reuters
JAKARTA, May 26 (Reuters) - Indonesia's finance minister said on Tuesday that Wilmar International Limited and the Musim Mas Group are among the palm oil companies now being probed for suspected "under-invoicing" of exports.
Here are the details:
- Finance Minister Purbaya Yudhi Sadewa, replying to questions by reporters, said the two companies are among palm oil companies under investigation for under-invoicing.
- Wilmar International and Musim Mas Group did not immediately respond to a request for comment.
- Singapore-based Wilmar is one of the world's largest oil palm plantation owners with a total planted area of 234,334 hectares (579051.92 acres) by the end of 2025, of which about 66% is located in Indonesia, according to its website.
- Musim Mas Group, also based in Singapore, is a major integrated palm oil company operating in 14 countries, with primary operations in Indonesia, according to its website.
- Indonesia, the world's largest palm oil producer and exporter, unveiled a sweeping plan last week to centralise exports of key commodities such as palm oil and coal, aiming to boost government revenue through tighter control over the sale and pricing of its abundant natural resources.
- "Under-invoicing" involves the invoicing of goods below their market price, often to hide profits and avoid taxes.
- President Prabowo Subianto said tackling the practice was one of the key goals of the new plan, claiming that selling commodities on the cheap had lost the country $908 billion since 1992.
- Indonesian palm oil fresh fruit bunch (FFB) prices have collapsed at the farmers' level following the announcement.
Reporting by Dewi Kurniawati; Editing by David Stanway
https://www.reuters.com/world/asia-pacific/indonesia-probes-musim-mas-wilmar-under-invoicing-exports-finance-minister-says-2026-05-26/
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Prabowo’s Crackdown on Palm Oil Export ‘Leakages’ Hits Musim Mas, Wilmar Units, Raising Investor Questions
Key Takeaways
●Indonesia’s government confirmed subsidiaries linked to Musim Mas and Wilmar are under investigation for alleged export under-invoicing.
●President Prabowo Subianto claims Indonesia lost as much as $900 billion over 34 years from trade manipulation and export leakages.
●The administration plans to centralize strategic commodity exports under a new Danantara-controlled entity to tighten oversight.
●Investors support stronger governance but are increasingly concerned about regulatory unpredictability and communication risks.
JAKARTA, Investortrust.id — Indonesia has named subsidiaries tied to palm oil giants Musim Mas and Wilmar as part of a widening criminal investigation into alleged export under-invoicing, marking the clearest sign yet that President Prabowo Subianto is escalating his campaign against what he calls decades of “leakages” in the country’s natural resource trade.
Finance Minister Purbaya Yudhi Sadewa said Tuesday that the Attorney General’s Office is investigating units linked to both groups over alleged manipulation of export invoices tied to crude palm oil, or CPO.
“Those two are correct. Both of them,” Purbaya said in Jakarta on Tuesday when asked whether subsidiaries of Musim Mas and Wilmar International were among the firms under investigation.
The probe is part of a broader investigation into 10 companies suspected of using under-invoicing and transfer pricing schemes involving affiliated trading firms in Singapore.
The crackdown strikes at the heart of Indonesia’s commodity-export model, where coal, palm oil, nickel and other resource shipments generate hundreds of billions of dollars annually.
For global investors, the case signals two competing narratives unfolding simultaneously in Southeast Asia’s largest economy.
On one side, Prabowo’s administration is attempting the most aggressive overhaul in years of commodity export governance, targeting alleged tax leakage, transfer pricing and offshore profit shifting that officials say deprived the country of massive revenues.
On the other, the public naming of major corporate groups before formal legal conclusions are reached is raising concerns among investors over regulatory certainty, due process, and the broader investment climate.
The market sensitivity is particularly acute because both Musim Mas and Wilmar are deeply embedded in global edible oils, food manufacturing and biofuel supply chains.
Purbaya alleged that exporters shipped commodities to affiliated trading companies in Singapore at artificially depressed prices before the goods were resold at significantly higher market values.
“We saw export prices from here to Singapore at only half the actual value,” he said. “There was under-invoicing, smuggling — around 50%.” https://investortrust.id/market/104531/prabowos-crackdown-on-palm-oil-export-leakages-hits-musim-mas-wilmar-units-raising-investor-questions?page=english-edition
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Indonesia's CPO Exports Plunge Across Nine Major Markets
TEMPO.CO, Jakarta - The Indonesian Palm Oil Association (Gapki) reported a monthly decline in Indonesia’s crude palm oil (CPO) production, domestic consumption, and exports in March 2026.
In a written statement issued on Monday, May 25, 2026, Gapki said CPO production in March reached 4.403 million tons, down 12.22 percent from 5.015 million tons recorded in February.
The association also reported a decline in processed palm kernel oil (PKO) production. PKO output fell 12.35 percent month-on-month to 418,000 tons in March 2026.
Total domestic consumption of palm oil products also weakened, declining 8.25 percent to 2.115 million tons in March from 2.305 million tons in February.
According to Gapki, the sharpest decline came from food consumption, which dropped 9.03 percent to 897,000 tons in March.
Biodiesel consumption also fell by 7.71 percent to 1.056 million tons, while oleochemical consumption decreased 7.43 percent to 162,000 tons.
Despite the monthly slowdown, Gapki said cumulative domestic consumption through March 2026 still posted annual growth of 7.47 percent, reaching 6.524 million tons.
Exports of palm oil products also saw a significant decline in March. Gapki recorded a 34.25 percent drop in total exports to 2.168 million tons, compared with 3.297 million tons in February 2026.
Exports of crude palm oil products fell the most sharply, plunging 75.61 percent in March. Total CPO export volume stood at 96,000 tons, down from 295,000 tons in February.
Processed PKO exports also declined by 33.57 percent to 1.506 million tons in March.
Oleochemicals were the only palm oil derivative products to post export growth. Oleochemical exports rose 1.42 percent month-on-month to 468,000 tons. On an annual basis, oleochemical exports increased 11.91 percent to 8.546 million tons.
Based on destination markets, Gapki reported export declines to nine major regions and countries.
Exports to China fell by 314,000 tons in March, while shipments to India declined by 291,000 tons. Exports to Pakistan dropped by 113,000 tons, followed by Bangladesh with a decline of 90,000 tons. https://en.tempo.co/read/2105673/indonesias-cpo-exports-plunge-across-nine-major-markets
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May 26, 2026
Indonesia palm oil prices plunge at farmers' level on Prabowo's export plan
JAKARTA: Indonesian palm oil fresh fruit bunch (FFB) prices have collapsed at the farmers' level following the announcement of a new plan to channel commodity exports through a central government-run firm, a palm oil farmer association told Reuters on Monday (May 25).President Prabowo Subianto's scheme, designed to assert more control over Indonesia's lucrative commodity export business, could potentially disrupt supply chains and reduce smallholders' income, the industry has warned.
* "Prices at the farmers' level have collapsed," Gulat Manurung, head of the palm oil farmer association known as Apkasindo, told Reuters in a statement.
* Since the announcement, many collection points have shut down, transportation has been halted and fruits have begun piling up, hitting smallholder farmers the hardest, another palm oil farmer organisation, POPSI, said on Sunday.
* Policy uncertainty has threatened the industry, causing traders and mills to hold back due to unclear export mechanisms, creating potential income losses for the smallholders, POPSI said.
* Supriyadi, a farmer from Mamuju, West Sulawesi, said the price of FFB, which was previously at around 2,800 rupiah (US$0.16) per kilogram, has now plummeted to around 1,000 rupiah (US$0.06), according to a Saturday statement from another farmers union, SPKS.
* "The situation worsened after a number of companies began to withold purchases and temporarily halt sales," said Sabarudin, the head of SPKS, adding that the rapid price drop was a negative market response to the planned single-buyer export trading system.
* SPKS said that many farmers were even considering reducing or even stopping the use of fertiliser due to concerns that palm oil prices will continue to fall and production costs can no longer be covered.
* A unit of Indonesian sovereign wealth fund, called Danantara Sumber Daya Indonesia will become the sole exporter of palm oil as the government seeks tighter control over tax revenues and foreign exchange earnings from commodity sales. - Reuters https://www.thestar.com.my/aseanplus/aseanplus-news/2026/05/25/indonesia-palm-oil-prices-plunge-at-farmers039-level-on-prabowo039s-export-plan#goog_rewarded
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Indonesian Palm Oil Farmers Hit by Price Slump After Export Centralization Policy
Jakarta. Indonesian palm oil farmers are facing steep income losses after the government introduced a policy requiring palm oil exports to be routed through the newly established state-owned trading entity Danantara Sumberdaya Indonesia (DSI), triggering a sharp decline in fresh fruit bunch prices across major producing regions.
According to data from the Indonesian Oil Palm Farmers Union and the Indonesian Palm Oil Farmers Organizations Association, prices for fresh palm fruit bunches in key production areas such as West Sulawesi, West Kalimantan, and North Sumatra have fallen to around Rp 1,000-Rp 1,500 per kilogram, down from approximately Rp 2,800 ($0.15) per kg previously.
Indonesian Oil Palm Farmers Union chairman Sabarudin said the market reacted negatively to the government’s proposed single-gate export system, prompting exporters and palm oil processors to reduce or temporarily halt purchases from farmers.
“The situation worsened after several companies began suspending purchases and temporarily stopping sales,” Sabarudin said in a statement on Monday.
He urged the government to intervene immediately to stabilize the market, warning that farmers are suffering significant financial losses. According to him, the centralized export policy risks creating a monopsony market structure that could further suppress farmgate prices for fresh fruit bunches.
Sabarudin said the impact could extend beyond declining farmer incomes and threaten the long-term sustainability of smallholder plantations. Many farmers, he added, are now considering reducing or even stopping fertilizer use because of fears that falling prices will no longer cover production costs.
Around 40% of Indonesia’s palm oil supply comes from smallholder plantations, which are highly dependent on stable prices.Indonesia travel guides
If the situation persists, productivity among smallholder plantations could decline and eventually disrupt Indonesia’s overall palm oil supply, he said.
“Farmers are traumatized by what happened in 2015 when fresh fruit bunch prices fell below Rp 1,000 per kilogram. At that time, many farmers switched to other crops because they could no longer survive,” Sabarudin said.
He also argued that the policy contradicts the government’s ambition to expand the B50 biodiesel program, which requires substantial palm oil feedstock. Reduced fertilization and declining smallholder participation could eventually undermine the domestic supply needed for the biodiesel initiative.
Not Too Late to Cancel the Plan
Indonesian Palm Oil Farmers Organizations Association chairman Mansuetus Darto echoed those concerns, saying uncertainty surrounding the policy has caused traders, refiners, exporters, and other market participants to hold back from transactions.
According to Mansuetus, the lack of clarity has fueled market panic, speculation, and weaker trading activity, directly pressuring crude palm oil (CPO) prices. https://jakartaglobe.id/business/indonesian-palm-oil-farmers-hit-by-price-slump-after-export-centralization-policy#goog_rewarded
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Indonesia’s Palm Oil Export Controls Set to Reshape Global Food Supply Chains and Commodity Markets
Indonesia has unveiled a sweeping new policy to centralize the export of key natural resources, including palm oil, coal, and ferroalloys, through a state-owned enterprise, a move set to profoundly impact global food chains and commodity markets. Announced by President Prabowo Subianto on May 20, 2026, the new regulation mandates that future sales of these strategic commodities will be channeled via a designated state-backed agency, PT Danantara Sumber Daya Indonesia. The transition is scheduled to commence in June 2026, with full implementation targeted for September 2026.
The primary motivation behind these stringent export controls is multifaceted, aiming to significantly bolster state revenue and address pressing economic challenges. President Subianto cited an estimated loss of $908 billion between 1991 and 2024 due to illicit practices such as under-invoicing, tax evasion, transfer pricing, and capital flight of export earnings. By tightening oversight, the government intends to optimize tax collection and maximize foreign exchange inflows, which are crucial for stabilizing the devaluing rupiah and managing inflation amidst global volatility. Furthermore, the policy aligns with a broader nationalistic agenda to assert greater state control over Indonesia's abundant natural resources and fund ambitious domestic programs, including a nationwide free school meals initiative.
The consequences and impacts of this policy are expected to be substantial across economic, geopolitical, and industry-specific spheres. Economically, the announcement immediately triggered a sharp decline in the stocks of major Indonesian commodity producers, such as First Resources Ltd and Golden Agri-Resources Ltd, and caused the Jakarta Composite Index to fall. Investors are expressing concerns over potential margin pressure, reduced trading flexibility, and increased policy unpredictability, which could deter foreign investment in the plantation and mining sectors.
From an industry-specific perspective, particularly for the global food sector, the impact on palm oil is significant. As Indonesia accounts for over half of global palm oil shipments, centralizing its exports through a single state entity is expected to disrupt global supply, potentially driving up international palm oil prices and those of rival edible oils. Industry participants warn that this move could fundamentally reshape Indonesia's palm oil trading structure, concentrating pricing power within the state-linked entity and potentially undermining the existing market-based trading ecosystem. The Indonesian Palm Oil Association (Gapki) and small-scale growers have voiced concerns that the policy could jeopardize established trade relationships with overseas buyers, reduce transparency, introduce greater political influence into commercial trade flows, and diminish farmers' bargaining power. Conversely, rival producer Malaysia could potentially benefit as international buyers seek more stable policies and diversified supply sources.
Geopolitically, this policy represents a significant assertion of Indonesia's resource nationalism, granting it greater bargaining power in negotiations with global superpowers seeking access to its vast resources. The disruption to global commodity markets, given Indonesia's position as the world's largest exporter of thermal coal and palm oil, could be considerable. China, as Indonesia's largest trading partner and a major importer of these commodities, is expected to feel the brunt of this policy pivot and may accelerate its search for alternative supply sources. Other key importers, including the US, European Union, India, Japan, South Korea, and neighboring Southeast Asian nations, will also be affected by these tighter controls. https://www.chemanalyst.com/NewsAndDeals/NewsDetails/indonesias-palm-oil-export-controls-set-to-reshape-global-food-42400
Indonesia palm oil prices plunge at farmers' level on Prabowo's export plan
JAKARTA: Indonesian palm oil fresh fruit bunch (FFB) prices have collapsed at the farmers' level following the announcement of a new plan to channel commodity exports through a central government-run firm, a palm oil farmer association told Reuters on Monday (May 25).President Prabowo Subianto's scheme, designed to assert more control over Indonesia's lucrative commodity export business, could potentially disrupt supply chains and reduce smallholders' income, the industry has warned.
* "Prices at the farmers' level have collapsed," Gulat Manurung, head of the palm oil farmer association known as Apkasindo, told Reuters in a statement.
* Since the announcement, many collection points have shut down, transportation has been halted and fruits have begun piling up, hitting smallholder farmers the hardest, another palm oil farmer organisation, POPSI, said on Sunday.
* Policy uncertainty has threatened the industry, causing traders and mills to hold back due to unclear export mechanisms, creating potential income losses for the smallholders, POPSI said.
* Supriyadi, a farmer from Mamuju, West Sulawesi, said the price of FFB, which was previously at around 2,800 rupiah (US$0.16) per kilogram, has now plummeted to around 1,000 rupiah (US$0.06), according to a Saturday statement from another farmers union, SPKS.
* "The situation worsened after a number of companies began to withold purchases and temporarily halt sales," said Sabarudin, the head of SPKS, adding that the rapid price drop was a negative market response to the planned single-buyer export trading system.
* SPKS said that many farmers were even considering reducing or even stopping the use of fertiliser due to concerns that palm oil prices will continue to fall and production costs can no longer be covered.
* A unit of Indonesian sovereign wealth fund, called Danantara Sumber Daya Indonesia will become the sole exporter of palm oil as the government seeks tighter control over tax revenues and foreign exchange earnings from commodity sales. - Reuters https://www.thestar.com.my/aseanplus/aseanplus-news/2026/05/25/indonesia-palm-oil-prices-plunge-at-farmers039-level-on-prabowo039s-export-plan#goog_rewarded
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Indonesian Palm Oil Farmers Hit by Price Slump After Export Centralization Policy
Jakarta. Indonesian palm oil farmers are facing steep income losses after the government introduced a policy requiring palm oil exports to be routed through the newly established state-owned trading entity Danantara Sumberdaya Indonesia (DSI), triggering a sharp decline in fresh fruit bunch prices across major producing regions.
According to data from the Indonesian Oil Palm Farmers Union and the Indonesian Palm Oil Farmers Organizations Association, prices for fresh palm fruit bunches in key production areas such as West Sulawesi, West Kalimantan, and North Sumatra have fallen to around Rp 1,000-Rp 1,500 per kilogram, down from approximately Rp 2,800 ($0.15) per kg previously.
Indonesian Oil Palm Farmers Union chairman Sabarudin said the market reacted negatively to the government’s proposed single-gate export system, prompting exporters and palm oil processors to reduce or temporarily halt purchases from farmers.
“The situation worsened after several companies began suspending purchases and temporarily stopping sales,” Sabarudin said in a statement on Monday.
He urged the government to intervene immediately to stabilize the market, warning that farmers are suffering significant financial losses. According to him, the centralized export policy risks creating a monopsony market structure that could further suppress farmgate prices for fresh fruit bunches.
Sabarudin said the impact could extend beyond declining farmer incomes and threaten the long-term sustainability of smallholder plantations. Many farmers, he added, are now considering reducing or even stopping fertilizer use because of fears that falling prices will no longer cover production costs.
Around 40% of Indonesia’s palm oil supply comes from smallholder plantations, which are highly dependent on stable prices.Indonesia travel guides
If the situation persists, productivity among smallholder plantations could decline and eventually disrupt Indonesia’s overall palm oil supply, he said.
“Farmers are traumatized by what happened in 2015 when fresh fruit bunch prices fell below Rp 1,000 per kilogram. At that time, many farmers switched to other crops because they could no longer survive,” Sabarudin said.
He also argued that the policy contradicts the government’s ambition to expand the B50 biodiesel program, which requires substantial palm oil feedstock. Reduced fertilization and declining smallholder participation could eventually undermine the domestic supply needed for the biodiesel initiative.
Not Too Late to Cancel the Plan
Indonesian Palm Oil Farmers Organizations Association chairman Mansuetus Darto echoed those concerns, saying uncertainty surrounding the policy has caused traders, refiners, exporters, and other market participants to hold back from transactions.
According to Mansuetus, the lack of clarity has fueled market panic, speculation, and weaker trading activity, directly pressuring crude palm oil (CPO) prices. https://jakartaglobe.id/business/indonesian-palm-oil-farmers-hit-by-price-slump-after-export-centralization-policy#goog_rewarded
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Indonesia’s Palm Oil Export Controls Set to Reshape Global Food Supply Chains and Commodity Markets
Indonesia has unveiled a sweeping new policy to centralize the export of key natural resources, including palm oil, coal, and ferroalloys, through a state-owned enterprise, a move set to profoundly impact global food chains and commodity markets. Announced by President Prabowo Subianto on May 20, 2026, the new regulation mandates that future sales of these strategic commodities will be channeled via a designated state-backed agency, PT Danantara Sumber Daya Indonesia. The transition is scheduled to commence in June 2026, with full implementation targeted for September 2026.
The primary motivation behind these stringent export controls is multifaceted, aiming to significantly bolster state revenue and address pressing economic challenges. President Subianto cited an estimated loss of $908 billion between 1991 and 2024 due to illicit practices such as under-invoicing, tax evasion, transfer pricing, and capital flight of export earnings. By tightening oversight, the government intends to optimize tax collection and maximize foreign exchange inflows, which are crucial for stabilizing the devaluing rupiah and managing inflation amidst global volatility. Furthermore, the policy aligns with a broader nationalistic agenda to assert greater state control over Indonesia's abundant natural resources and fund ambitious domestic programs, including a nationwide free school meals initiative.
The consequences and impacts of this policy are expected to be substantial across economic, geopolitical, and industry-specific spheres. Economically, the announcement immediately triggered a sharp decline in the stocks of major Indonesian commodity producers, such as First Resources Ltd and Golden Agri-Resources Ltd, and caused the Jakarta Composite Index to fall. Investors are expressing concerns over potential margin pressure, reduced trading flexibility, and increased policy unpredictability, which could deter foreign investment in the plantation and mining sectors.
From an industry-specific perspective, particularly for the global food sector, the impact on palm oil is significant. As Indonesia accounts for over half of global palm oil shipments, centralizing its exports through a single state entity is expected to disrupt global supply, potentially driving up international palm oil prices and those of rival edible oils. Industry participants warn that this move could fundamentally reshape Indonesia's palm oil trading structure, concentrating pricing power within the state-linked entity and potentially undermining the existing market-based trading ecosystem. The Indonesian Palm Oil Association (Gapki) and small-scale growers have voiced concerns that the policy could jeopardize established trade relationships with overseas buyers, reduce transparency, introduce greater political influence into commercial trade flows, and diminish farmers' bargaining power. Conversely, rival producer Malaysia could potentially benefit as international buyers seek more stable policies and diversified supply sources.
Geopolitically, this policy represents a significant assertion of Indonesia's resource nationalism, granting it greater bargaining power in negotiations with global superpowers seeking access to its vast resources. The disruption to global commodity markets, given Indonesia's position as the world's largest exporter of thermal coal and palm oil, could be considerable. China, as Indonesia's largest trading partner and a major importer of these commodities, is expected to feel the brunt of this policy pivot and may accelerate its search for alternative supply sources. Other key importers, including the US, European Union, India, Japan, South Korea, and neighboring Southeast Asian nations, will also be affected by these tighter controls. https://www.chemanalyst.com/NewsAndDeals/NewsDetails/indonesias-palm-oil-export-controls-set-to-reshape-global-food-42400
May 25, 2026
Indonesia eyes commodity export policy detail roll-out in coming weeks
(May 25): Global markets and major trading partners can expect updates on Indonesia’s new commodity export policy within weeks as the government works on the legal and structural roll-out of its new centralised export agency, according to a Trade Ministry official.
Vice Minister of Trade Dyah Roro Esti Widya Putri said the new government entity — called Danantara Sumberdaya Indonesia — is moving from concept to execution. She was speaking in a Bloomberg TV interview on Saturday at the sidelines of an Asia-Pacific Economic Cooperation meeting in Suzhou, China.
“This is very new, it’s still under progress” in terms of legislation and the setting up of the entity, Roro said. “We are going to see how this progresses over the next few weeks to come.”
President Prabowo Subianto last week announced the government would take direct control of exports of some of Indonesia’s most important commodities. Officials have said Danantara Sumberdaya will start by taking over export management of palm oil, thermal coal and some nickel products, markets that Indonesia dominates.
Prabowo cited a need for better oversight of shipments, estimating the resource-rich nation loses up to US$150 billion (RM592.42 billion) annually from “leaks” caused by practices such as under-invoicing. Total state revenue in Southeast Asia’s largest economy last year was just under US$160 billion.
While key details are still being worked out, there’s set to be an initial transition period where exporters will be required to report their sales of these strategic commodities to Danantara Sumberdaya from June 1. The entity is expected to take control of export contracts, shipping and payments at a later date once new teams and systems are in place. https://theedgemalaysia.com/node/804796
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Indonesia’s New Trade Regime and Rate Hike Deliver Double Blow to Markets
Jakarta. Indonesia’s decision to centralize exports of key natural resource commodities under a new state-controlled entity, combined with Bank Indonesia’s surprise 50-basis-point benchmark interest-rate increase, is being viewed by business groups as a double blow to investors, companies, and consumers.
Earlier this week, President Prabowo Subianto announced that exports of palm oil, coal, and ferroalloys would eventually be routed through the newly established state-owned company Danantara Sumber Daya Indonesia to prevent export invoice manipulation that allegedly reduces foreign-exchange earnings and state revenues.
“Single-gate exports for natural resources are a highly counterproductive policy and could trigger negative sentiment among investors and markets, especially when public trust in the government is already declining,” said Jahja Soenarjo, chairman and chief executive of Business Forum Indonesia.
“International confidence in Indonesia is also not improving, particularly if natural resource exports become controlled by a government institution,” he added.
Jahja said he understood the government’s intention to secure export earnings, but warned that the policy should not come at the expense of businesses and private-sector confidence.
“The country may indeed need more revenue, but businesses and the private sector should not become the ones forced to bear the burden,” he said.
“Our recommendation is that the policy should be reviewed, especially if there are political objectives behind it. Otherwise, confidence in the government could deteriorate further,” he added.
At the same time, the higher BI rate is expected to increase borrowing costs across key sectors, including housing and automotive financing.
“This will affect consumer lending and cause people to cut back spending, which could eventually slow the economy,” Jahja said.
He also warned that a higher interest-rate environment would encourage investors to move funds into safer bank deposits rather than volatile equity markets.
Negative Market Reaction
Josua Pardede, chief economist at Permata Bank, said the government’s rationale for establishing Danantara Sumber Daya Indonesia could be understood from a policy perspective. https://jakartaglobe.id/business/indonesias-new-trade-regime-and-rate-hike-deliver-double-blow-to-markets
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ICW Doubts Indonesia's New Export Rule Will Curb Corruption
TEMPO.CO, Jakarta - The Indonesia Corruption Watch (ICW) doubts the government's policy to transfer natural resource exports to a state-owned enterprise could cut down on corruption practices. "We doubt that the government regulation on natural resource export was geared towards the spirit of corruption eradication," said ICW researcher Yassar Aulia on Sunday, May 24, 2026.
President Prabowo Subianto has recently issued a government regulation on the governance of export commodities of natural resources. To implement this policy, the government has established PT Danantara SDI.
The regulation will enter into force in June 2026, for three strategic commodities, namely palm oil, coal, and ferroalloys.
Yassar's concerns emerged amid the worry that PT DSDI would be legally immune, making it difficult to investigate corruption practices within the company. "Monopoly without a guarantee that PT DSDI will not enjoy legal impunity to be audited and effectively monitored, will only shift the potential for corruption to more influential actors," he said.
Corruption practices in exports are far from novel, according to Yassar, as the Attorney General's Office has probed several corruption cases linked to exports. The most recent is the export of crude palm oil (CPO) disguised as palm oil mill effluent (POME) in the 2022-2024 period.
Authorities identified 11 suspects in the case, with 4 state officials and seven business actors. Investigations for the case are underway, where the suspects were allegedly disguising CPO exports as POME for lower export tax and evading government policies during the cooking oil shortage.
Another corruption case regarding palm oil export involved Wilmar Group, Musim Mas Group, and Permata Hijau Group. Initially, the panel of judges acquitted the three corporations, but it was later overturned by the Supreme Court.
According to Yassar, the corruption eradication and prevention ecosystem during the Prabowo administration is out of shape, and the new regulation will only trigger "further public distrust" against the government for its desire to control state revenue to "fund the president's priority programs without checks and balances." https://en.tempo.co/read/2105182/icw-doubts-indonesias-new-export-rule-will-curb-corruption#goog_rewarded
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Indonesia eyes commodity export policy detail roll-out in coming weeks
(May 25): Global markets and major trading partners can expect updates on Indonesia’s new commodity export policy within weeks as the government works on the legal and structural roll-out of its new centralised export agency, according to a Trade Ministry official.
Vice Minister of Trade Dyah Roro Esti Widya Putri said the new government entity — called Danantara Sumberdaya Indonesia — is moving from concept to execution. She was speaking in a Bloomberg TV interview on Saturday at the sidelines of an Asia-Pacific Economic Cooperation meeting in Suzhou, China.
“This is very new, it’s still under progress” in terms of legislation and the setting up of the entity, Roro said. “We are going to see how this progresses over the next few weeks to come.”
President Prabowo Subianto last week announced the government would take direct control of exports of some of Indonesia’s most important commodities. Officials have said Danantara Sumberdaya will start by taking over export management of palm oil, thermal coal and some nickel products, markets that Indonesia dominates.
Prabowo cited a need for better oversight of shipments, estimating the resource-rich nation loses up to US$150 billion (RM592.42 billion) annually from “leaks” caused by practices such as under-invoicing. Total state revenue in Southeast Asia’s largest economy last year was just under US$160 billion.
While key details are still being worked out, there’s set to be an initial transition period where exporters will be required to report their sales of these strategic commodities to Danantara Sumberdaya from June 1. The entity is expected to take control of export contracts, shipping and payments at a later date once new teams and systems are in place. https://theedgemalaysia.com/node/804796
---------
Indonesia’s New Trade Regime and Rate Hike Deliver Double Blow to Markets
Jakarta. Indonesia’s decision to centralize exports of key natural resource commodities under a new state-controlled entity, combined with Bank Indonesia’s surprise 50-basis-point benchmark interest-rate increase, is being viewed by business groups as a double blow to investors, companies, and consumers.
Earlier this week, President Prabowo Subianto announced that exports of palm oil, coal, and ferroalloys would eventually be routed through the newly established state-owned company Danantara Sumber Daya Indonesia to prevent export invoice manipulation that allegedly reduces foreign-exchange earnings and state revenues.
“Single-gate exports for natural resources are a highly counterproductive policy and could trigger negative sentiment among investors and markets, especially when public trust in the government is already declining,” said Jahja Soenarjo, chairman and chief executive of Business Forum Indonesia.
“International confidence in Indonesia is also not improving, particularly if natural resource exports become controlled by a government institution,” he added.
Jahja said he understood the government’s intention to secure export earnings, but warned that the policy should not come at the expense of businesses and private-sector confidence.
“The country may indeed need more revenue, but businesses and the private sector should not become the ones forced to bear the burden,” he said.
“Our recommendation is that the policy should be reviewed, especially if there are political objectives behind it. Otherwise, confidence in the government could deteriorate further,” he added.
At the same time, the higher BI rate is expected to increase borrowing costs across key sectors, including housing and automotive financing.
“This will affect consumer lending and cause people to cut back spending, which could eventually slow the economy,” Jahja said.
He also warned that a higher interest-rate environment would encourage investors to move funds into safer bank deposits rather than volatile equity markets.
Negative Market Reaction
Josua Pardede, chief economist at Permata Bank, said the government’s rationale for establishing Danantara Sumber Daya Indonesia could be understood from a policy perspective. https://jakartaglobe.id/business/indonesias-new-trade-regime-and-rate-hike-deliver-double-blow-to-markets
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ICW Doubts Indonesia's New Export Rule Will Curb Corruption
TEMPO.CO, Jakarta - The Indonesia Corruption Watch (ICW) doubts the government's policy to transfer natural resource exports to a state-owned enterprise could cut down on corruption practices. "We doubt that the government regulation on natural resource export was geared towards the spirit of corruption eradication," said ICW researcher Yassar Aulia on Sunday, May 24, 2026.
President Prabowo Subianto has recently issued a government regulation on the governance of export commodities of natural resources. To implement this policy, the government has established PT Danantara SDI.
The regulation will enter into force in June 2026, for three strategic commodities, namely palm oil, coal, and ferroalloys.
Yassar's concerns emerged amid the worry that PT DSDI would be legally immune, making it difficult to investigate corruption practices within the company. "Monopoly without a guarantee that PT DSDI will not enjoy legal impunity to be audited and effectively monitored, will only shift the potential for corruption to more influential actors," he said.
Corruption practices in exports are far from novel, according to Yassar, as the Attorney General's Office has probed several corruption cases linked to exports. The most recent is the export of crude palm oil (CPO) disguised as palm oil mill effluent (POME) in the 2022-2024 period.
Authorities identified 11 suspects in the case, with 4 state officials and seven business actors. Investigations for the case are underway, where the suspects were allegedly disguising CPO exports as POME for lower export tax and evading government policies during the cooking oil shortage.
Another corruption case regarding palm oil export involved Wilmar Group, Musim Mas Group, and Permata Hijau Group. Initially, the panel of judges acquitted the three corporations, but it was later overturned by the Supreme Court.
According to Yassar, the corruption eradication and prevention ecosystem during the Prabowo administration is out of shape, and the new regulation will only trigger "further public distrust" against the government for its desire to control state revenue to "fund the president's priority programs without checks and balances." https://en.tempo.co/read/2105182/icw-doubts-indonesias-new-export-rule-will-curb-corruption#goog_rewarded
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May 24, 2026
Indonesia export shift rattles Malaysian planters
MALAYSIAN plantation groups with operations in Indonesia have a new problem to contend with.
Indonesia is reportedly considering centralising strategic exports such as palm oil, thermal coal and ferroalloys through a single government-appointed state entity supervised by the country’s sovereign wealth fund Danantara.
The entity, reportedly named PT Danantara Sumberdaya Indonesia, is set to begin operations as early as June.
The policy trajectory out of Jakarta suggests the move is not an isolated decision by President Prabowo Subianto’s government.
His push for greater control over commodity exports is seen as part of a broader pattern: stronger state control, revenue capture, resource nationalism, rupiah defence and tighter scrutiny of plantation legality.
The move has been justified on concerns over under-invoicing and under-reporting of exports, which are said to have caused hundreds of billions of dollars in losses to Indonesia.
Prabowo has also criticised the fact that commodity prices are largely set outside Indonesia.
These may be valid concerns. However, as MUFG notes, the near-term risk for capital flows is that while centralised export receipts could in theory improve foreign-exchange (forex) repatriation over time, the policy raises immediate questions around governance and investor predictability.
For Malaysian planters, the move adds another layer of complexity, alongside Indonesia’s higher palm oil export levies, biodiesel funding requirements, domestic policy obligations and a wider crackdown on plantation land legality, including scrutiny over concessions, forest-area status and possible fines.
They now also face uncertainties around buyer selection, shipment timing, pricing negotiations and contract structuring.
Cashflows could be affected, requiring planters to rethink dividend repatriation, group debt servicing, working capital and forex hedging if export proceeds must remain in Indonesian state banks.
The silver lining is that any resulting complications could prompt buyers to seek greater policy stability and increase reliance on Malaysian palm oil, refiners and trading platforms – supported by Bursa Malaysia Derivatives’ role as a global price discovery centre for palm oil. The StarMY
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Malaysian palm oil groups worried Indonesian export revamp could cause short-term disruption
The new mechanism could affect the efficiency and speed of exports
[KUALA LUMPUR] The Malaysian palm oil industry is concerned that Indonesia’s plan to centralise exports of key commodities, including palm oil, could temporarily disrupt export flows and weigh on market sentiment during the transition period, officials said on Thursday (May 21).
Indonesia, the world’s largest palm oil producer and exporter, on Wednesday said it would create a sole exporter of its main commodities, starting with palm oil, coal and ferroalloys, to tighten control over tax revenues and foreign exchange earnings.
“In terms of supply, the policy is not expected to directly affect palm oil production. However, as with any transition in export administration, the market may require time to adjust to new procedures,” the Malaysian Palm Oil Board (MPOB) said in a statement to Reuters on Thursday. https://www.businesstimes.com.sg/pulse/article/9084910
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Malaysia’s palm oil paradox
In Brief
Tightening land constraints intersected with international regulatory scrutiny and market incentives in Malaysia to curtail domestic land expansion for palm oil plantations, shifting instead to intensification. Yet its domestic curtailment was accompanied by the outward expansion of plantation companies into Indonesia, with significant social and environmental consequences. Rather than resolving the industry’s harms, Malaysia appears to have simply displaced them across borders.
For decades, palm oil expansion followed a simple logic — more production requires more land. Malaysia challenges that assumption, having increased production without significantly expanding into forests. But rather than resolving the industry’s social and environmental harms, it may have simply transferred them across borders.
As the world’s second-largest palm oil producer, Malaysia generated approximately 19.3 million tonnes of crude palm oil in 2024 using just around 5.6 million hectares. This represents 40 per cent of Indonesia’s output — the world’s largest producer — in roughly a third of its planted area. This means that Malaysia has substantially higher per-hectare productivity, reflecting the country’s structural shift towards intensification.
The energy crisis caused by the US–Israel war on Iran has prompted various countries to strengthen domestic energy security through palm-based biodiesel, including Indonesia, Malaysia and Thailand. This is expected to increase palm oil demand and production, foregrounding issues around governance and environmental impacts
While Malaysia and Indonesia have faced similar mounting anti-deforestation pressures, these are mediated by distinct political and institutional contexts, producing markedly different land-use outcomes across the two countries. In Indonesia, domestic socioeconomic and bureaucratic factors constrained domestic policy responses to regulatory pressure, so land-use change has continued to occur mainly in primary rainforest and peatlands.
Malaysia’s trajectory has been different. Much of its earlier expansion took place on already-cleared land, including former rubber plantations and secondary forests, reducing the immediate environmental costs of growth. Given the country’s land constraints, Malaysia has pursued an intensification strategy, increasing output from existing land rather than bringing new land into production — using technology, mechanisation, artificial intelligence and replanting programs to sustain productivity. So while Indonesia’s palm oil land use expanded dramatically from the early 2000s, Malaysia’s planted area grew slowly before largely stagnating from 2014.
Along with land scarcity, a key factor behind this trajectory is a political commitment made in 1992 following intense international criticism and boycotts of Malaysian timber over unsustainable deforestation rates. Kuala Lumpur pledged to maintain at least 50 per cent of its land mass under forest or tree cover. Yet this commitment has not had equal impact across the country.
While land constraints became increasingly binding in Peninsular Malaysia by the early 2000s, expansion continued more extensively in the Borneo states of Sabah and Sarawak, where oil palm development has been associated with significant deforestation. This suggests that political commitments alone cannot explain Malaysia’s shift — rather, it was the combination of policy signals and tightening land constraints in key production areas that has made large-scale forest conversion increasingly difficult to sustain.
Malaysia’s domestic restraint comes with an important qualification. While Malaysian companies have curtailed expansion within their own borders, they have not stopped expanding altogether. Malaysia is the largest investor in Indonesia’s palm oil plantation sector, with investments totalling Rp 49 trillion (US$2.7 billion) in 2024 and making up 30 per cent of Indonesia’s palm oil investment.
Malaysia’s domestic curtailment was coupled with a deliberate corporate strategy of establishing plantations in Indonesia — two structurally linked processes. Tightening land constraints at home actively redirected capital outward to jurisdictions where land-use is less constrained. Malaysian-linked capital is deeply involved in Indonesian palm oil companies’ clearing of rainforests, which reached 30,000 hectares in 2023 alone, bringing the total area used for oil palm plantations in Indonesia to at least 13 million hectares.
While palm oil development can generate economic benefits, it also comes with substantial costs. Malaysian-linked expansion in Indonesia has been associated with land burning, operations in forest and peat areas and persistent land conflicts. Subsidiaries of Malaysia-based company Kuala Lumpur Kepong Berhad reportedly operated on around 3000 hectares of forestland in Central Kalimantan, prompting state reclamation measures in 2025. The Consortium for Agrarian Reform recorded 74 plantation-related conflicts in 2021 affecting over 23,000 households — over 50 per cent involving palm oil plantations. These patterns suggest that cross-border expansion redistributes environmental and social pressures rather than resolving them.
Malaysia is often seen as a relative success story in reducing deforestation within its own borders. Yet this interpretation becomes less straightforward when viewed through a transnational lens. It is ironic that a country that has contained its domestic expansion is simultaneously one of the...https://eastasiaforum.org/2026/05/23/malaysias-palm-oil-paradox/
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Beyond area expansion: Why oil palm productivity will decide India’s edible oil future
The future of oil palm in India will ultimately belong not to those who expand the fastest — but to those who build productivity, trust and sustainability patiently over time
India’s ambitious push toward oil palm cultivation has entered a decisive phase. The recent entry of several companies into oil palm plantation development across Andhra Pradesh, Telangana, the North-East and other states reflects both strategic intent and national urgency. At a time when India continues to remain heavily dependent on imported edible oils, especially palm oil, the sector carries enormous significance for the country’s long-term food and economic security.
Yet, despite policy momentum and substantial incentives under the National Mission on Edible Oils–Oil Palm (NMEO-OP), one uncomfortable reality continues to persist: expansion in acreage alone will not ensure success. The real challenge before India today is productivity, sustainability and farmer confidence.
Oil palm in India cannot be approached merely as another agricultural expansion programme or a conventional FMCG-linked sourcing business. It is a highly specialised, long-gestation, smallholder-driven agri-enterprise that demands sustained engagement, technical expertise, patient capital and deep farmer relationships over decades. The Indian model is fundamentally different from the estate-based plantation systems of Indonesia or Malaysia. Here, success depends almost entirely on the confidence, continuity and economic participation of lakhs of small and marginal farmers.https://www.thehindubusinessline.com/economy/agri-business/beyond-area-expansion-why-oil-palm-productivity-will-decide-indias-edible-oil-future/article71011956.ece/amp/
Indonesia export shift rattles Malaysian planters
MALAYSIAN plantation groups with operations in Indonesia have a new problem to contend with.
Indonesia is reportedly considering centralising strategic exports such as palm oil, thermal coal and ferroalloys through a single government-appointed state entity supervised by the country’s sovereign wealth fund Danantara.
The entity, reportedly named PT Danantara Sumberdaya Indonesia, is set to begin operations as early as June.
The policy trajectory out of Jakarta suggests the move is not an isolated decision by President Prabowo Subianto’s government.
His push for greater control over commodity exports is seen as part of a broader pattern: stronger state control, revenue capture, resource nationalism, rupiah defence and tighter scrutiny of plantation legality.
The move has been justified on concerns over under-invoicing and under-reporting of exports, which are said to have caused hundreds of billions of dollars in losses to Indonesia.
Prabowo has also criticised the fact that commodity prices are largely set outside Indonesia.
These may be valid concerns. However, as MUFG notes, the near-term risk for capital flows is that while centralised export receipts could in theory improve foreign-exchange (forex) repatriation over time, the policy raises immediate questions around governance and investor predictability.
For Malaysian planters, the move adds another layer of complexity, alongside Indonesia’s higher palm oil export levies, biodiesel funding requirements, domestic policy obligations and a wider crackdown on plantation land legality, including scrutiny over concessions, forest-area status and possible fines.
They now also face uncertainties around buyer selection, shipment timing, pricing negotiations and contract structuring.
Cashflows could be affected, requiring planters to rethink dividend repatriation, group debt servicing, working capital and forex hedging if export proceeds must remain in Indonesian state banks.
The silver lining is that any resulting complications could prompt buyers to seek greater policy stability and increase reliance on Malaysian palm oil, refiners and trading platforms – supported by Bursa Malaysia Derivatives’ role as a global price discovery centre for palm oil. The StarMY
---------
Malaysian palm oil groups worried Indonesian export revamp could cause short-term disruption
The new mechanism could affect the efficiency and speed of exports
[KUALA LUMPUR] The Malaysian palm oil industry is concerned that Indonesia’s plan to centralise exports of key commodities, including palm oil, could temporarily disrupt export flows and weigh on market sentiment during the transition period, officials said on Thursday (May 21).
Indonesia, the world’s largest palm oil producer and exporter, on Wednesday said it would create a sole exporter of its main commodities, starting with palm oil, coal and ferroalloys, to tighten control over tax revenues and foreign exchange earnings.
“In terms of supply, the policy is not expected to directly affect palm oil production. However, as with any transition in export administration, the market may require time to adjust to new procedures,” the Malaysian Palm Oil Board (MPOB) said in a statement to Reuters on Thursday. https://www.businesstimes.com.sg/pulse/article/9084910
--------
Malaysia’s palm oil paradox
In Brief
Tightening land constraints intersected with international regulatory scrutiny and market incentives in Malaysia to curtail domestic land expansion for palm oil plantations, shifting instead to intensification. Yet its domestic curtailment was accompanied by the outward expansion of plantation companies into Indonesia, with significant social and environmental consequences. Rather than resolving the industry’s harms, Malaysia appears to have simply displaced them across borders.
For decades, palm oil expansion followed a simple logic — more production requires more land. Malaysia challenges that assumption, having increased production without significantly expanding into forests. But rather than resolving the industry’s social and environmental harms, it may have simply transferred them across borders.
As the world’s second-largest palm oil producer, Malaysia generated approximately 19.3 million tonnes of crude palm oil in 2024 using just around 5.6 million hectares. This represents 40 per cent of Indonesia’s output — the world’s largest producer — in roughly a third of its planted area. This means that Malaysia has substantially higher per-hectare productivity, reflecting the country’s structural shift towards intensification.
The energy crisis caused by the US–Israel war on Iran has prompted various countries to strengthen domestic energy security through palm-based biodiesel, including Indonesia, Malaysia and Thailand. This is expected to increase palm oil demand and production, foregrounding issues around governance and environmental impacts
While Malaysia and Indonesia have faced similar mounting anti-deforestation pressures, these are mediated by distinct political and institutional contexts, producing markedly different land-use outcomes across the two countries. In Indonesia, domestic socioeconomic and bureaucratic factors constrained domestic policy responses to regulatory pressure, so land-use change has continued to occur mainly in primary rainforest and peatlands.
Malaysia’s trajectory has been different. Much of its earlier expansion took place on already-cleared land, including former rubber plantations and secondary forests, reducing the immediate environmental costs of growth. Given the country’s land constraints, Malaysia has pursued an intensification strategy, increasing output from existing land rather than bringing new land into production — using technology, mechanisation, artificial intelligence and replanting programs to sustain productivity. So while Indonesia’s palm oil land use expanded dramatically from the early 2000s, Malaysia’s planted area grew slowly before largely stagnating from 2014.
Along with land scarcity, a key factor behind this trajectory is a political commitment made in 1992 following intense international criticism and boycotts of Malaysian timber over unsustainable deforestation rates. Kuala Lumpur pledged to maintain at least 50 per cent of its land mass under forest or tree cover. Yet this commitment has not had equal impact across the country.
While land constraints became increasingly binding in Peninsular Malaysia by the early 2000s, expansion continued more extensively in the Borneo states of Sabah and Sarawak, where oil palm development has been associated with significant deforestation. This suggests that political commitments alone cannot explain Malaysia’s shift — rather, it was the combination of policy signals and tightening land constraints in key production areas that has made large-scale forest conversion increasingly difficult to sustain.
Malaysia’s domestic restraint comes with an important qualification. While Malaysian companies have curtailed expansion within their own borders, they have not stopped expanding altogether. Malaysia is the largest investor in Indonesia’s palm oil plantation sector, with investments totalling Rp 49 trillion (US$2.7 billion) in 2024 and making up 30 per cent of Indonesia’s palm oil investment.
Malaysia’s domestic curtailment was coupled with a deliberate corporate strategy of establishing plantations in Indonesia — two structurally linked processes. Tightening land constraints at home actively redirected capital outward to jurisdictions where land-use is less constrained. Malaysian-linked capital is deeply involved in Indonesian palm oil companies’ clearing of rainforests, which reached 30,000 hectares in 2023 alone, bringing the total area used for oil palm plantations in Indonesia to at least 13 million hectares.
While palm oil development can generate economic benefits, it also comes with substantial costs. Malaysian-linked expansion in Indonesia has been associated with land burning, operations in forest and peat areas and persistent land conflicts. Subsidiaries of Malaysia-based company Kuala Lumpur Kepong Berhad reportedly operated on around 3000 hectares of forestland in Central Kalimantan, prompting state reclamation measures in 2025. The Consortium for Agrarian Reform recorded 74 plantation-related conflicts in 2021 affecting over 23,000 households — over 50 per cent involving palm oil plantations. These patterns suggest that cross-border expansion redistributes environmental and social pressures rather than resolving them.
Malaysia is often seen as a relative success story in reducing deforestation within its own borders. Yet this interpretation becomes less straightforward when viewed through a transnational lens. It is ironic that a country that has contained its domestic expansion is simultaneously one of the...https://eastasiaforum.org/2026/05/23/malaysias-palm-oil-paradox/
--------
Beyond area expansion: Why oil palm productivity will decide India’s edible oil future
The future of oil palm in India will ultimately belong not to those who expand the fastest — but to those who build productivity, trust and sustainability patiently over time
India’s ambitious push toward oil palm cultivation has entered a decisive phase. The recent entry of several companies into oil palm plantation development across Andhra Pradesh, Telangana, the North-East and other states reflects both strategic intent and national urgency. At a time when India continues to remain heavily dependent on imported edible oils, especially palm oil, the sector carries enormous significance for the country’s long-term food and economic security.
Yet, despite policy momentum and substantial incentives under the National Mission on Edible Oils–Oil Palm (NMEO-OP), one uncomfortable reality continues to persist: expansion in acreage alone will not ensure success. The real challenge before India today is productivity, sustainability and farmer confidence.
Oil palm in India cannot be approached merely as another agricultural expansion programme or a conventional FMCG-linked sourcing business. It is a highly specialised, long-gestation, smallholder-driven agri-enterprise that demands sustained engagement, technical expertise, patient capital and deep farmer relationships over decades. The Indian model is fundamentally different from the estate-based plantation systems of Indonesia or Malaysia. Here, success depends almost entirely on the confidence, continuity and economic participation of lakhs of small and marginal farmers.https://www.thehindubusinessline.com/economy/agri-business/beyond-area-expansion-why-oil-palm-productivity-will-decide-indias-edible-oil-future/article71011956.ece/amp/
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May 23, 2026
Analysis: Indonesia plans to beat global trading giants at their own game
(May 23): For years, Indonesia’s raw materials have been ferried from remote mines and plantations to global markets by armies of traders who handle negotiations, loans and even cranes and river barges.
Now the government is taking over, hoping to save billions of dollars it says are otherwise lost in transit.
Under the surprise plan, the country will take control of exports of the country’s major commodities. It is a sweeping move reminiscent of the country’s authoritarian past — radical even for President Prabowo Subianto, a former general who has sought to harness the country’s raw materials and centralise economic management since he took power in 2024.
The policy, Prabowo said this week, is intended to eventually increase transparency and curb tax evasion. In the short term, it has rattled already nervous investors, and left traders, producers and even some government officials scrambling to understand how it can even begin to be implemented.
Only the broad strokes of the plan have so far been made public, including a decision to begin with coal and palm oil, two commodities in which Indonesia has unparalleled clout as a top exporter. Details are yet to be decided. What is already evident, according to many of those involved, is that the mission is daunting.
Commodity producers spread across the Indonesian archipelago connect with foreign buyers through a network of hundreds of agents, traders and trading houses, from multinational giants like Trafigura Group to small, local firms. The links — financial, personal and logistical — have been forged over decades, and will have to be replicated in just months.
“It’s going to be a real uphill battle,” said Kevin O’Rourke, a political analyst and principal at Jakarta-based consultancy Reformasi Information Services. “There is a whole ecosystem of human relations. It’s not something that can be subjected to this type of disruptive action on such a short time scale.”
The new entity, Danantara Sumberdaya Indonesia, will sit under sovereign wealth fund Danantara — an outfit that was itself set up just over a year ago and reports to Prabowo.
Pandu Sjahrir, Danantara’s chief investment officer, has sought to reassure investors that it will be market-friendly. It will be an operator not a regulator, he said on Friday, staffed with the best talent recruited from the industry, and meeting high governance standards. Its new chief executive officer will be a former director of PT Vale Indonesia.
Prabowo has been more blunt. Indonesia, as leading producer, should have more control over the price at which it sells its raw materials, he said in his address to lawmakers on Wednesday, and cannot afford to leak an annual sum he estimates at US$150 billion (RM595.18 billion).
Indonesia’s natural resources industry is perilous even for the most experienced and deep-pocketed firms. Asset and company ownership is frequently opaque, the government has battled corruption for years and — as the past week has demonstrated — policy changes can be abrupt and unexpected. Over the years, multinational miners have largely abandoned the country, leaving local firms to take over prized assets.
That’s left room for commodity traders, whose more nimble business model has allowed them to buy and sell raw materials while, in many cases, avoiding the entanglement of owning assets. Bloomberg/ The Edge
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Indonesia delays full state takeover of coal, palm oil exports to 2027
Indonesia would carry out the full implementation of its state-owned export monopoly for coal from Jan 1, 2027, extending a transition period that will now run in phases from Jun 1, Trade Minister Budi Santoso said on May 21. The revised timeline marks a retreat from the original plan for full state control starting Sep 1, 2026 under PT Danantara Sumberdaya Indonesia (PT DSI). During the transition, existing exporters can continue operations but must submit documentation to the state entity, with a hybrid arrangement to follow. SXcoal
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Indonesia Investigated Major Palm Oil Exporters Before Launching New Trade Regime
Jakarta. President Prabowo Subianto decided to impose a centralized export system for natural resource commodities after receiving multiple reports of invoice manipulation and trade-data irregularities in crude palm oil exports that allegedly harmed state revenues, Finance Minister Purbaya Yudhi Sadewa said recently.
“They lowered the declared prices compared with the actual selling prices overseas, and sometimes even reduced the reported shipment volumes. In a sense, part of these exports amounted to smuggling,” Purbaya said in a YouTube video released on Friday.
According to Purbaya, the practices reduced state revenues from export taxes, income taxes, and foreign-exchange earnings entering Indonesia.
He said Prabowo instructed him to investigate the issue, prompting a review of export patterns among 10 of Indonesia’s largest crude palm oil exporters.
He said Prabowo instructed him to investigate the issue, prompting a review of export patterns among 10 of Indonesia’s largest crude palm oil exporters.
The investigation found that many shipments were not exported directly from Indonesia to their final destination markets.
Instead, some crude palm oil exports bound for the United States were first routed through intermediary trading companies in Singapore.
“It turns out they usually export from Jakarta to the United States indirectly, through intermediary traders in Singapore,” Purbaya said.
He claimed the prices recorded for shipments from Indonesia to Singapore were significantly lower than the prices recorded for exports from Singapore to the United States.
“The price from Indonesia to Singapore was only about half of the price from Singapore to the United States,” Purbaya said.
As a result, Indonesia’s recorded export revenues and foreign-exchange inflows did not reflect the true value of the transactions, he said.
Purbaya said those findings ultimately led Prabowo to establish Danantara Sumber Daya Indonesia as the sole gateway for exports of strategic natural resources, including crude palm oil, coal, and ferroalloys.
The government argues the centralized system will strengthen supervision over commodity exports, reduce under-invoicing practices, and prevent state revenue leakages that Prabowo estimates could reach as much as $150 billion annually. Jakarta Globe
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Prabowo Highlights Palm Oil Export Leakages, Warns of Under-Invoicing Practices
PALMOILMAGAZINE, JAKARTA – Indonesian President Prabowo Subianto has raised concerns over significant foreign exchange leakages from the country’s natural resource exports, including palm oil, due to practices such as under-invoicing, transfer pricing, and inaccurate export volume reporting.
Speaking during the 19th Plenary Session of the House of Representatives on the 2027 Macroeconomic Framework (KEM) and Fiscal Policy Guidelines (PPKF) on Wednesday (20/5/2026), Prabowo said Indonesia has consistently recorded trade surpluses for decades, yet much of the wealth generated has not fully benefited the domestic economy. Palm oil magazine
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Canada’s Clean Fuel Regulations present opportunities for home-grown biofuel: Senator Lewis
Canada’s Clean Fuel Regulations (CFR), which took effect July 1, 2023, require producers and importers of gasoline and diesel to reduce the life cycle carbon intensity of gasoline and diesel used in Canada. The regulations established a credit market; one way to create credits was to supply low-carbon intensity fuels (for example: biodiesel, other renewable diesels and ethanol).
These regulations present an excellent opportunity for refiners of low-carbon intensity fuels as well as domestic grain and oilseed producers, but the United States is the main supplier of ethanol and biodiesel in the Canadian market; in fact, Canada is the number one export market for American biofuel producers. In 2024, 73% of the Clean Fuel Regulations credits generated came from imported fuels, the majority of which came from the U.S.
Biodiesel made from Canadian-grown plants, for example, competes with that made with used cooking oil (UCO), which is given a lower carbon intensity score under the CFR. This is problematic because, as noted by The Western Producer, “There are suspicions that some of the imported UCO-based biofuel is mislabeled palm oil biofuel, which has sustainability concerns due to the deforestation associated with palm plantations.” In 2025, both the U.S. and the European Union tightened regulations about used cooking oil. As a result, an ever-increasing supply of potentially fraudulent UCO is available for the Canadian marketplace.
Low-carbon intensity fuel made with ethanol also faces challenges. Ethanol is a liquid alcohol made by fermenting sugar or converted starch contained in agricultural or forest products; in Canada, ethanol is made mostly from corn and wheat. Canadian ethanol, however, competes against imports from the U.S.
As detailed in a November 2025 article by Matthew Frank in The Carillon, the American ethanol industry has several advantages over the Canadian ethanol industry. Then-U.S. president Joe Biden’s 2022 Inflation Reduction Act offered tax credits and grants for American ethanol and biofuel producers, allowing them to scale up production. Then, in 2025, President Donald Trump’s One Big Beautiful Bill Act extended existing tax credits and removed land use emissions penalties for ethanol production. Robert Parsons, an instructor at the University of Manitoba, told The Carillon that those tax credits add up to roughly 34 cents per litre for American biofuels, whether the fuel stays in the U.S. or is exported.
Meanwhile, Canadian ethanol producers have to pay the industrial carbon tax on emissions. Domestic producers compete with American producers to sell their products to Canadian consumers, but it isn’t a level playing field. They simply can’t turn the same profit as their American counterparts. Canadian businesses struggle while subsidized American product floods the Canadian market.
It’s worth reiterating that the CFR exist because biofuels help reduce greenhouse gas emissions. As Natural Resources Canada notes on its ethanol webpage: “Ethanol reduces greenhouse gas emissions because the grain or other biomass used to make the ethanol absorbs carbon dioxide as it grows. Although the conversion of the biomass to ethanol and the burning of the ethanol produce emissions, the net effect can be a large reduction in GHG emissions compared with fossil fuels such as gasoline.”
Biofuels also encourage regional economic growth and job creation. In the U.S., more than 40% of the corn crop and 40% of the soybean crop go into plant-based fuels.
In September 2025, in recognition of the challenges facing the domestic biofuel sector, Prime Minister Mark Carney announced that the federal government would make targeted amendments to the CFR. A backgrounder published by the Prime Minister’s Office said: “many Canadian [biofuel] facilities are idling or shutting down. The loss of this sector would deepen Canada’s reliance on imports from the United States and dampen demand for domestic agricultural feedstocks like canola.”
If Canada can get the new CFR right, it can be a win-win situation. Grain and oilseed producers will expand an important domestic market, and Canadian consumers of gasoline and diesel fuel will be able to reduce their environmental impact with every fill of the tank. Sencanada
Analysis: Indonesia plans to beat global trading giants at their own game
(May 23): For years, Indonesia’s raw materials have been ferried from remote mines and plantations to global markets by armies of traders who handle negotiations, loans and even cranes and river barges.
Now the government is taking over, hoping to save billions of dollars it says are otherwise lost in transit.
Under the surprise plan, the country will take control of exports of the country’s major commodities. It is a sweeping move reminiscent of the country’s authoritarian past — radical even for President Prabowo Subianto, a former general who has sought to harness the country’s raw materials and centralise economic management since he took power in 2024.
The policy, Prabowo said this week, is intended to eventually increase transparency and curb tax evasion. In the short term, it has rattled already nervous investors, and left traders, producers and even some government officials scrambling to understand how it can even begin to be implemented.
Only the broad strokes of the plan have so far been made public, including a decision to begin with coal and palm oil, two commodities in which Indonesia has unparalleled clout as a top exporter. Details are yet to be decided. What is already evident, according to many of those involved, is that the mission is daunting.
Commodity producers spread across the Indonesian archipelago connect with foreign buyers through a network of hundreds of agents, traders and trading houses, from multinational giants like Trafigura Group to small, local firms. The links — financial, personal and logistical — have been forged over decades, and will have to be replicated in just months.
“It’s going to be a real uphill battle,” said Kevin O’Rourke, a political analyst and principal at Jakarta-based consultancy Reformasi Information Services. “There is a whole ecosystem of human relations. It’s not something that can be subjected to this type of disruptive action on such a short time scale.”
The new entity, Danantara Sumberdaya Indonesia, will sit under sovereign wealth fund Danantara — an outfit that was itself set up just over a year ago and reports to Prabowo.
Pandu Sjahrir, Danantara’s chief investment officer, has sought to reassure investors that it will be market-friendly. It will be an operator not a regulator, he said on Friday, staffed with the best talent recruited from the industry, and meeting high governance standards. Its new chief executive officer will be a former director of PT Vale Indonesia.
Prabowo has been more blunt. Indonesia, as leading producer, should have more control over the price at which it sells its raw materials, he said in his address to lawmakers on Wednesday, and cannot afford to leak an annual sum he estimates at US$150 billion (RM595.18 billion).
Indonesia’s natural resources industry is perilous even for the most experienced and deep-pocketed firms. Asset and company ownership is frequently opaque, the government has battled corruption for years and — as the past week has demonstrated — policy changes can be abrupt and unexpected. Over the years, multinational miners have largely abandoned the country, leaving local firms to take over prized assets.
That’s left room for commodity traders, whose more nimble business model has allowed them to buy and sell raw materials while, in many cases, avoiding the entanglement of owning assets. Bloomberg/ The Edge
--------
Indonesia delays full state takeover of coal, palm oil exports to 2027
Indonesia would carry out the full implementation of its state-owned export monopoly for coal from Jan 1, 2027, extending a transition period that will now run in phases from Jun 1, Trade Minister Budi Santoso said on May 21. The revised timeline marks a retreat from the original plan for full state control starting Sep 1, 2026 under PT Danantara Sumberdaya Indonesia (PT DSI). During the transition, existing exporters can continue operations but must submit documentation to the state entity, with a hybrid arrangement to follow. SXcoal
--------
Indonesia Investigated Major Palm Oil Exporters Before Launching New Trade Regime
Jakarta. President Prabowo Subianto decided to impose a centralized export system for natural resource commodities after receiving multiple reports of invoice manipulation and trade-data irregularities in crude palm oil exports that allegedly harmed state revenues, Finance Minister Purbaya Yudhi Sadewa said recently.
“They lowered the declared prices compared with the actual selling prices overseas, and sometimes even reduced the reported shipment volumes. In a sense, part of these exports amounted to smuggling,” Purbaya said in a YouTube video released on Friday.
According to Purbaya, the practices reduced state revenues from export taxes, income taxes, and foreign-exchange earnings entering Indonesia.
He said Prabowo instructed him to investigate the issue, prompting a review of export patterns among 10 of Indonesia’s largest crude palm oil exporters.
He said Prabowo instructed him to investigate the issue, prompting a review of export patterns among 10 of Indonesia’s largest crude palm oil exporters.
The investigation found that many shipments were not exported directly from Indonesia to their final destination markets.
Instead, some crude palm oil exports bound for the United States were first routed through intermediary trading companies in Singapore.
“It turns out they usually export from Jakarta to the United States indirectly, through intermediary traders in Singapore,” Purbaya said.
He claimed the prices recorded for shipments from Indonesia to Singapore were significantly lower than the prices recorded for exports from Singapore to the United States.
“The price from Indonesia to Singapore was only about half of the price from Singapore to the United States,” Purbaya said.
As a result, Indonesia’s recorded export revenues and foreign-exchange inflows did not reflect the true value of the transactions, he said.
Purbaya said those findings ultimately led Prabowo to establish Danantara Sumber Daya Indonesia as the sole gateway for exports of strategic natural resources, including crude palm oil, coal, and ferroalloys.
The government argues the centralized system will strengthen supervision over commodity exports, reduce under-invoicing practices, and prevent state revenue leakages that Prabowo estimates could reach as much as $150 billion annually. Jakarta Globe
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Prabowo Highlights Palm Oil Export Leakages, Warns of Under-Invoicing Practices
PALMOILMAGAZINE, JAKARTA – Indonesian President Prabowo Subianto has raised concerns over significant foreign exchange leakages from the country’s natural resource exports, including palm oil, due to practices such as under-invoicing, transfer pricing, and inaccurate export volume reporting.
Speaking during the 19th Plenary Session of the House of Representatives on the 2027 Macroeconomic Framework (KEM) and Fiscal Policy Guidelines (PPKF) on Wednesday (20/5/2026), Prabowo said Indonesia has consistently recorded trade surpluses for decades, yet much of the wealth generated has not fully benefited the domestic economy. Palm oil magazine
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Canada’s Clean Fuel Regulations present opportunities for home-grown biofuel: Senator Lewis
Canada’s Clean Fuel Regulations (CFR), which took effect July 1, 2023, require producers and importers of gasoline and diesel to reduce the life cycle carbon intensity of gasoline and diesel used in Canada. The regulations established a credit market; one way to create credits was to supply low-carbon intensity fuels (for example: biodiesel, other renewable diesels and ethanol).
These regulations present an excellent opportunity for refiners of low-carbon intensity fuels as well as domestic grain and oilseed producers, but the United States is the main supplier of ethanol and biodiesel in the Canadian market; in fact, Canada is the number one export market for American biofuel producers. In 2024, 73% of the Clean Fuel Regulations credits generated came from imported fuels, the majority of which came from the U.S.
Biodiesel made from Canadian-grown plants, for example, competes with that made with used cooking oil (UCO), which is given a lower carbon intensity score under the CFR. This is problematic because, as noted by The Western Producer, “There are suspicions that some of the imported UCO-based biofuel is mislabeled palm oil biofuel, which has sustainability concerns due to the deforestation associated with palm plantations.” In 2025, both the U.S. and the European Union tightened regulations about used cooking oil. As a result, an ever-increasing supply of potentially fraudulent UCO is available for the Canadian marketplace.
Low-carbon intensity fuel made with ethanol also faces challenges. Ethanol is a liquid alcohol made by fermenting sugar or converted starch contained in agricultural or forest products; in Canada, ethanol is made mostly from corn and wheat. Canadian ethanol, however, competes against imports from the U.S.
As detailed in a November 2025 article by Matthew Frank in The Carillon, the American ethanol industry has several advantages over the Canadian ethanol industry. Then-U.S. president Joe Biden’s 2022 Inflation Reduction Act offered tax credits and grants for American ethanol and biofuel producers, allowing them to scale up production. Then, in 2025, President Donald Trump’s One Big Beautiful Bill Act extended existing tax credits and removed land use emissions penalties for ethanol production. Robert Parsons, an instructor at the University of Manitoba, told The Carillon that those tax credits add up to roughly 34 cents per litre for American biofuels, whether the fuel stays in the U.S. or is exported.
Meanwhile, Canadian ethanol producers have to pay the industrial carbon tax on emissions. Domestic producers compete with American producers to sell their products to Canadian consumers, but it isn’t a level playing field. They simply can’t turn the same profit as their American counterparts. Canadian businesses struggle while subsidized American product floods the Canadian market.
It’s worth reiterating that the CFR exist because biofuels help reduce greenhouse gas emissions. As Natural Resources Canada notes on its ethanol webpage: “Ethanol reduces greenhouse gas emissions because the grain or other biomass used to make the ethanol absorbs carbon dioxide as it grows. Although the conversion of the biomass to ethanol and the burning of the ethanol produce emissions, the net effect can be a large reduction in GHG emissions compared with fossil fuels such as gasoline.”
Biofuels also encourage regional economic growth and job creation. In the U.S., more than 40% of the corn crop and 40% of the soybean crop go into plant-based fuels.
In September 2025, in recognition of the challenges facing the domestic biofuel sector, Prime Minister Mark Carney announced that the federal government would make targeted amendments to the CFR. A backgrounder published by the Prime Minister’s Office said: “many Canadian [biofuel] facilities are idling or shutting down. The loss of this sector would deepen Canada’s reliance on imports from the United States and dampen demand for domestic agricultural feedstocks like canola.”
If Canada can get the new CFR right, it can be a win-win situation. Grain and oilseed producers will expand an important domestic market, and Canadian consumers of gasoline and diesel fuel will be able to reduce their environmental impact with every fill of the tank. Sencanada
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May 22, 2026
Danantara Indonesia will honour commodity export contracts, but will review prices
By Bernadette Christina/ Reuters
Summary
JAKARTA, May 21 (Reuters) - Indonesian sovereign wealth fund Danantara will honour existing export contracts but will review them to make sure prices are not below market levels, its chief executive said on Thursday as the fund prepared to take control of the country's top commodity shipments.
A unit of the fund will become the sole exporter of palm oil, coal and ferroalloys from as early as September, President Prabowo Subianto announced on Wednesday, as his government sought tighter control over tax revenues and foreign exchange earnings from commodities.
Danantara CEO Rosan Roeslani said that when the sovereign wealth fund has visibility on pricing, it may renegotiate prices that were set below global benchmarks.
"We will respect all existing contracts. But what we see is that even though they are long-term contracts, the pricing is not determined at that time, but when the contract is running. Later, if we see a contract below prices at world market index, of course we will review it," Rosan told reporters.
"If we see an indication of under-invoicing, of course we will re-evaluate such a contract," he said.
There is a three-month transition period from June 1, which could be extended to six months, during which exporters must report the volume, value and price points of their goods to the unit, Danantara Sumber Daya Indonesia.
Indonesia is the world's biggest exporter of palm oil, thermal coal and nickel, and last year its exports of the three commodities amounted to $65 billion.
S&P, MOODY'S WARN OF RISKS
Prabowo's plan aims to tackle concerns about under-invoicing and how exporters account for transfer pricing, but it has unsettled financial markets this week.
On Thursday, Jakarta's main stock index (.JKSE), opens new tab fell to its lowest level in more than a year, while the rupiah currency slid 0.4% to trade near a record low set on Wednesday.
Rating agency S&P Global Ratings warned that the plan could hit Indonesia's exports, squeezing government revenues and the country's balance of payments.
"These factors create greater downside uncertainty to our ratings on Indonesia," it said in a statement, adding that investment could be affected if the changes lowered business confidence and investment sentiment.
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Indonesia to exempt nickel pig iron and some palm oil derivatives from centralised export policy
By Reuters
JAKARTA, May 22 (Reuters) - Indonesia will exempt nickel pig iron, which makes up the majority of its nickel exports, and some refined palm oil products from its planned centralisation of commodity exports, a senior government minister said.
Under a policy announced this week, exports of coal, palm oil and ferroalloys must go through a state company, with a transition phase expected to start from June 1. The resource-rich nation is the world's top exporter of thermal coal, palm oil and nickel products.
Nickel pig iron (NPI), a low purity nickel metal, will be exempted from the policy, while ferronickel was included due to its iron content, chief economic minister Airlangga Hartarto told reporters late on Thursday after a meeting with some industry groups.
Ferronickel has a higher content of nickel than NPI, but both products fall under the same code used in global trade tracking. Indonesia's exports under this category totalled $16.4 billion last year, statistics bureau data showed. The industry says NPI accounts for the vast majority of nickel metal exports.
The secretary general of APNI, a nickel miners' group, welcomed the exemption, noting that only a few smelters in the country produced ferronickel.
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Indonesian palm oil sinks as commodity overhaul sows confusion
By Anuradha Raghu & Eko Listiyorini / Bloomberg
(May 21): Indonesian palm oil prices tumbled after President Prabowo Subianto unveiled plans to impose state control over exports of several key commodities, including the edible oil.
The Southeast Asian nation produces more than half of the world’s palm oil and the plan would require all exports to go through a government-created company. The move is aimed at curbing under-invoicing and giving authorities a greater say on price, but also risks alienating buyers.
The slump reflects confusion in the market. Bidders have pulled back from tenders on fears the restrictions may slow down shipments and swell stockpiles, while some sellers have slashed prices to quickly clear supplies before the rules take effect, according to traders.
Daily bids for crude palm oil at Dumai port were as low as 11,777 rupiah (US$0.67 or RM2.64) a kilogram on Wednesday after the policy was announced, about 23% less than a day earlier, said the traders, asking not to be named as they are not authorised to speak to the media.
That translated to a decline of about US$50 (RM198.13) a tonne from prices tendered the day earlier, and is the biggest daily drop in several weeks, they said, Bids on Thursday were even lower at around 8,000 rupiah, the traders said.
“Tender offer prices for Indonesian crude palm oil fell sharply as buyers turned cautious,” said Warren Tay, a trader at Kuala Lumpur-based Eco Palm International Sdn. Indonesian agencies, however, will likely quickly intervene to help the local palm market return to normal, he said.
The Indonesian daily prices refer to physical crude palm oil offered by state-linked plantation groups through the local tender system, where refiners, traders and exporters submit bid for spot cargoes. The price is closely watched as a real-time indicator of domestic supply and demand in Indonesia.
For now, the sharp tumble in Indonesian prices has made its palm cheaper than neighbouring Malaysia. However, in the longer term there’s a risk that exports may not be managed properly, which could spur overseas buyers to switch to rival suppliers in Malaysia, Thailand and Latin America.
Export prices for Indonesian crude palm oil traded at a discount of about US$97.50 per tonne to Malaysian futures on Wednesday, the widest gap since February, according to Marcello Cultrera, a palm trader and chief executive officer of agriculture software company Apricus 8 Sdn Bhd in Malaysia. If the steep discount persists, it could trigger a surge in Indonesian exports, he said.
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Malaysia should drive palm oil biofuel use more aggressively, says scientist
Augustine Ong laments Malaysia’s cautious approach to commercialisation despite helping pioneer the technology over four decades ago.
KUALA LUMPUR: With rising global demand and fossil fuel prices, Malaysia can take the lead in aggressively promoting proven “green” palm oil biofuels as an alternative source of energy, says scientist Augustine Ong.
The senior fellow at the Academy of Sciences Malaysia said the country could offer to transfer palm oil biodiesel technology to other nations to counter the volatile crude oil cost arising from the Strait of Hormuz crisis.
Ong lamented the nation’s generally cautious approach to wider palm oil biodiesel adoption since he conceptualised the conversion process of palm oil into biodiesel 45 years ago.
“We made the discovery in 1981, yet are still hesitantly debating its extensive viable use against fossil petrochemical fuels. Even automotive giant Mercedes-Benz has endorsed its safe and efficient use for engines.
“We extensively undertook field trials for over three years with the Toong Fong stage buses (in Kuala Lumpur), but we have failed to commercialise the technology more aggressively in the transport industry.
“Malaysia possesses the technical capability to commercialise 100% palm biodiesel, pushing forward next-generation biofuel innovations,” Ong said at the three-day International Invention, Innovation and Technology Exhibition 2026 at the Kuala Lumpur Convention Centre, which ended on May 20.
The government had previously mandated a B10 biodiesel blend for motorists, comprising 10% palm biodiesel and 90% petroleum diesel. Malaysia has 34 biodiesel blending depots, most originally designed to support B10 production.
Effective June 1, Malaysia will begin rolling out B15 biodiesel, produced at 19 licensed plants, to reduce dependence on imported fossil fuels, strengthen energy resilience and ease pressure from rising diesel prices.
Since 1981, Ong has advocated for the use of palm oil as a biodiesel, helping lay the groundwork for Malaysia’s current national biodiesel mandates.
As a lipid chemist, he authored hundreds of papers, obtained 15 patents and helped dispel anti-palm oil narratives in the 1980s by proving its health benefits and nutritional value.
Significant untapped economic potential
Ong spoke on the untapped economic potential and industrial and commercial applications of palm oil beyond its traditional uses, claiming it could reap “trillions” in revenue for the country.
He said there is demand for using palm oil to produce oleochemicals, which are used in various industries like cosmetics, pharmaceuticals, cleaning products, biodegradable plastics, surfactants and lubricants.
“As a sustainable fuel conforming with environmental standards, palm oil can attract green investments and improve Malaysia’s global market competitiveness, especially with the favourable global pricing of palm oil,” he said.
Ong said the oil palm industry also generates large amounts of biomass waste, including palm kernel cake, fronds and trunks, which can be used for animal feed, organic fertilisers, and bioenergy production, among others.
“Further investment in technologies that convert waste into valuable products can unlock new revenue streams and create a circular economy within the palm oil sector,” he said. Free Malaysia Today
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FOE Japan: A Survey for Biomass Power Generators Certified under the FIT Scheme : Challenges in “traceability” to logging sites.
FoE Japan conducted a survey on the sustainability of biomass fuels among biomass power generators and coal power generators using co-firing with biomass fuels certified under the Feed-in Tariff (FIT) scheme for renewable energy.
The targets of this survey are a total of 150 FIT-certified biomass or coal-fired power generators with a biomass co-firing capacity exceeding 10,000kW. We received responses from 46 generators (a response rate: approximately 31%) during the one-month survey period (January 28 to March 2, 2026). Among the respondents, 31 were dedicated biomass combustion generators and the other 15 were biomass co-fired generators.
Key Takeaways
https://foejapan.org/en/issue/20260521/29728/
Danantara Indonesia will honour commodity export contracts, but will review prices
By Bernadette Christina/ Reuters
Summary
- Danantara may renegotiate contracts priced below global benchmarks, CEO says
- S&P warns of export and revenue risks from changes
- Industry groups raise concerns over contract terms, market access, and regulatory clarity
JAKARTA, May 21 (Reuters) - Indonesian sovereign wealth fund Danantara will honour existing export contracts but will review them to make sure prices are not below market levels, its chief executive said on Thursday as the fund prepared to take control of the country's top commodity shipments.
A unit of the fund will become the sole exporter of palm oil, coal and ferroalloys from as early as September, President Prabowo Subianto announced on Wednesday, as his government sought tighter control over tax revenues and foreign exchange earnings from commodities.
Danantara CEO Rosan Roeslani said that when the sovereign wealth fund has visibility on pricing, it may renegotiate prices that were set below global benchmarks.
"We will respect all existing contracts. But what we see is that even though they are long-term contracts, the pricing is not determined at that time, but when the contract is running. Later, if we see a contract below prices at world market index, of course we will review it," Rosan told reporters.
"If we see an indication of under-invoicing, of course we will re-evaluate such a contract," he said.
There is a three-month transition period from June 1, which could be extended to six months, during which exporters must report the volume, value and price points of their goods to the unit, Danantara Sumber Daya Indonesia.
Indonesia is the world's biggest exporter of palm oil, thermal coal and nickel, and last year its exports of the three commodities amounted to $65 billion.
S&P, MOODY'S WARN OF RISKS
Prabowo's plan aims to tackle concerns about under-invoicing and how exporters account for transfer pricing, but it has unsettled financial markets this week.
On Thursday, Jakarta's main stock index (.JKSE), opens new tab fell to its lowest level in more than a year, while the rupiah currency slid 0.4% to trade near a record low set on Wednesday.
Rating agency S&P Global Ratings warned that the plan could hit Indonesia's exports, squeezing government revenues and the country's balance of payments.
"These factors create greater downside uncertainty to our ratings on Indonesia," it said in a statement, adding that investment could be affected if the changes lowered business confidence and investment sentiment.
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Indonesia to exempt nickel pig iron and some palm oil derivatives from centralised export policy
By Reuters
JAKARTA, May 22 (Reuters) - Indonesia will exempt nickel pig iron, which makes up the majority of its nickel exports, and some refined palm oil products from its planned centralisation of commodity exports, a senior government minister said.
Under a policy announced this week, exports of coal, palm oil and ferroalloys must go through a state company, with a transition phase expected to start from June 1. The resource-rich nation is the world's top exporter of thermal coal, palm oil and nickel products.
Nickel pig iron (NPI), a low purity nickel metal, will be exempted from the policy, while ferronickel was included due to its iron content, chief economic minister Airlangga Hartarto told reporters late on Thursday after a meeting with some industry groups.
Ferronickel has a higher content of nickel than NPI, but both products fall under the same code used in global trade tracking. Indonesia's exports under this category totalled $16.4 billion last year, statistics bureau data showed. The industry says NPI accounts for the vast majority of nickel metal exports.
The secretary general of APNI, a nickel miners' group, welcomed the exemption, noting that only a few smelters in the country produced ferronickel.
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Indonesian palm oil sinks as commodity overhaul sows confusion
By Anuradha Raghu & Eko Listiyorini / Bloomberg
(May 21): Indonesian palm oil prices tumbled after President Prabowo Subianto unveiled plans to impose state control over exports of several key commodities, including the edible oil.
The Southeast Asian nation produces more than half of the world’s palm oil and the plan would require all exports to go through a government-created company. The move is aimed at curbing under-invoicing and giving authorities a greater say on price, but also risks alienating buyers.
The slump reflects confusion in the market. Bidders have pulled back from tenders on fears the restrictions may slow down shipments and swell stockpiles, while some sellers have slashed prices to quickly clear supplies before the rules take effect, according to traders.
Daily bids for crude palm oil at Dumai port were as low as 11,777 rupiah (US$0.67 or RM2.64) a kilogram on Wednesday after the policy was announced, about 23% less than a day earlier, said the traders, asking not to be named as they are not authorised to speak to the media.
That translated to a decline of about US$50 (RM198.13) a tonne from prices tendered the day earlier, and is the biggest daily drop in several weeks, they said, Bids on Thursday were even lower at around 8,000 rupiah, the traders said.
“Tender offer prices for Indonesian crude palm oil fell sharply as buyers turned cautious,” said Warren Tay, a trader at Kuala Lumpur-based Eco Palm International Sdn. Indonesian agencies, however, will likely quickly intervene to help the local palm market return to normal, he said.
The Indonesian daily prices refer to physical crude palm oil offered by state-linked plantation groups through the local tender system, where refiners, traders and exporters submit bid for spot cargoes. The price is closely watched as a real-time indicator of domestic supply and demand in Indonesia.
For now, the sharp tumble in Indonesian prices has made its palm cheaper than neighbouring Malaysia. However, in the longer term there’s a risk that exports may not be managed properly, which could spur overseas buyers to switch to rival suppliers in Malaysia, Thailand and Latin America.
Export prices for Indonesian crude palm oil traded at a discount of about US$97.50 per tonne to Malaysian futures on Wednesday, the widest gap since February, according to Marcello Cultrera, a palm trader and chief executive officer of agriculture software company Apricus 8 Sdn Bhd in Malaysia. If the steep discount persists, it could trigger a surge in Indonesian exports, he said.
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Malaysia should drive palm oil biofuel use more aggressively, says scientist
Augustine Ong laments Malaysia’s cautious approach to commercialisation despite helping pioneer the technology over four decades ago.
KUALA LUMPUR: With rising global demand and fossil fuel prices, Malaysia can take the lead in aggressively promoting proven “green” palm oil biofuels as an alternative source of energy, says scientist Augustine Ong.
The senior fellow at the Academy of Sciences Malaysia said the country could offer to transfer palm oil biodiesel technology to other nations to counter the volatile crude oil cost arising from the Strait of Hormuz crisis.
Ong lamented the nation’s generally cautious approach to wider palm oil biodiesel adoption since he conceptualised the conversion process of palm oil into biodiesel 45 years ago.
“We made the discovery in 1981, yet are still hesitantly debating its extensive viable use against fossil petrochemical fuels. Even automotive giant Mercedes-Benz has endorsed its safe and efficient use for engines.
“We extensively undertook field trials for over three years with the Toong Fong stage buses (in Kuala Lumpur), but we have failed to commercialise the technology more aggressively in the transport industry.
“Malaysia possesses the technical capability to commercialise 100% palm biodiesel, pushing forward next-generation biofuel innovations,” Ong said at the three-day International Invention, Innovation and Technology Exhibition 2026 at the Kuala Lumpur Convention Centre, which ended on May 20.
The government had previously mandated a B10 biodiesel blend for motorists, comprising 10% palm biodiesel and 90% petroleum diesel. Malaysia has 34 biodiesel blending depots, most originally designed to support B10 production.
Effective June 1, Malaysia will begin rolling out B15 biodiesel, produced at 19 licensed plants, to reduce dependence on imported fossil fuels, strengthen energy resilience and ease pressure from rising diesel prices.
Since 1981, Ong has advocated for the use of palm oil as a biodiesel, helping lay the groundwork for Malaysia’s current national biodiesel mandates.
As a lipid chemist, he authored hundreds of papers, obtained 15 patents and helped dispel anti-palm oil narratives in the 1980s by proving its health benefits and nutritional value.
Significant untapped economic potential
Ong spoke on the untapped economic potential and industrial and commercial applications of palm oil beyond its traditional uses, claiming it could reap “trillions” in revenue for the country.
He said there is demand for using palm oil to produce oleochemicals, which are used in various industries like cosmetics, pharmaceuticals, cleaning products, biodegradable plastics, surfactants and lubricants.
“As a sustainable fuel conforming with environmental standards, palm oil can attract green investments and improve Malaysia’s global market competitiveness, especially with the favourable global pricing of palm oil,” he said.
Ong said the oil palm industry also generates large amounts of biomass waste, including palm kernel cake, fronds and trunks, which can be used for animal feed, organic fertilisers, and bioenergy production, among others.
“Further investment in technologies that convert waste into valuable products can unlock new revenue streams and create a circular economy within the palm oil sector,” he said. Free Malaysia Today
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FOE Japan: A Survey for Biomass Power Generators Certified under the FIT Scheme : Challenges in “traceability” to logging sites.
FoE Japan conducted a survey on the sustainability of biomass fuels among biomass power generators and coal power generators using co-firing with biomass fuels certified under the Feed-in Tariff (FIT) scheme for renewable energy.
The targets of this survey are a total of 150 FIT-certified biomass or coal-fired power generators with a biomass co-firing capacity exceeding 10,000kW. We received responses from 46 generators (a response rate: approximately 31%) during the one-month survey period (January 28 to March 2, 2026). Among the respondents, 31 were dedicated biomass combustion generators and the other 15 were biomass co-fired generators.
Key Takeaways
- Many power plants use imported biomass fuels.
- These biomass fuels are mainly wood pellets or PKS (Palm Kernel Shell), and no other imported biomass fuels, such as palm oil or palm trunks, were reported. .
- Top country of origin for wood pellets or wood chips (countries of origin) is Vietnam, followed by Canada and the United States. The most common method to verify sustainability is through forest certification schemes.
- While all respondents stated they can confirm the traceability of wood pellets and wood chips, only a few responses indicated that they can “confirm the specific location of the logging forests”. Given that companies recognize the importance of confirming the traceability, this gap suggests that traceability back to the actual logging sites has not yet been established. It is essential to ensure the traceability back to the logging sites in terms of sustainability. We call for further companies’ efforts and the explicit inclusion of these requirements in the government’s Business Plan Guidelines.
- Regarding places of origin, which is crucial for verifying the sustainability of imported wood pellets and chips, the number of responses: “disclosing the information" slightly increases compared to the last survey, however, it remains limited. Although the FIT guidelines for business plan require companies to disclose the volume of certified fuel used and its certified fuel-specific identification number on their websites, many companies fail to do so.
- Regarding PKS, almost all came from Indonesia or Malaysia. All responses indicated that the method to check the sustainability is “certification system”, reflecting an increase in the number of companies using these systems since the previous survey.
- All responding companies stated that they have made public the name of third-party certification schemes for PKS on their websites. Only a few companies disclose the volume of certified fuel used and its specific identification number on their websites, as required by the guidelines. Furthermore, very few companies disclose places of origin, which is key to verify sustainability. Unlike the previous survey, there are no proactive and voluntary efforts by the companies like “publishing a list of oil extraction mills” or “publishing procurement volume and lists of PKS origin”. This trend may indicate a corporate mindset that simply disclosing the name of the certification system is sufficient.
- Regarding the life-cycle GHG emissions of biomass fuels, approximately 80% of responses indicated that they “calculate” them, a slight increase from the previous survey. Furthermore, about 80% of respondents said they publish their calculation results on their websites – a significant increase from the previous survey.
- None of the companies calculate carbon emissions resulting from deforestation and forest degradation.
https://foejapan.org/en/issue/20260521/29728/
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May 21, 2026
President Prabowo Urges Improvement of Economic System, State Sovereignty Enforcement
By Office of Assistant to Deputy Cabinet Secretary for State Documents & Translation Date 20 Mei 2026
Fundamental change to national economic governance is imperative, President Prabowo Subianto has said.
The President made the statement during the Presentation of the Macroeconomic Framework and Fiscal Policy Principles for the 2027 State Budget Bill at the Plenary Session Room of Nusantara Building, the Parliamentary Complex, Jakarta, on Wednesday (05/20).
The Head of State highlighted the immense potential of Indonesia’s wealth, which he assessed had not yet fully brought prosperity to the people.
According to President Prabowo, Indonesia has strong capital to transform into a developed and prosperous country with its strategic geographical position, vast natural resources, and demographic bonus.
“Ladies and Gentlemen, we actually have very strong capital to achieve this goal and vision. Our geographical position is highly strategic. Tens of percent of global trade passes through our waters,” he said.
President Prabowo also underscored the importance of maintaining state sovereignty, especially in the maritime sector, since illegal fishing by foreign vessels remains rampant in Indonesian waters.
“Every night, tens of thousands of foreign-flagged vessels illegally and unlawfully plunder our marine wealth. We must enforce sovereignty over our own waters,” he stressed.
On that occasion, President Prabowo also highlighted the vast contribution of Indonesia’s strategic commodities to state revenues, adding that Indonesia is the world’s largest exporter of palm oil, coal, and ferroalloy.
“Revenue from palm oil export reached US$23 billion, equal to Rp391 trillion in 2025. Indonesia is also the largest coal exporter in the world. Coal export revenue amounted to US$30 billion, equal to Rp510 trillion in 2025,” he said.
Despite its abundant natural resources, the President stated that Indonesia’s fiscal capacity still lags behind other countries, pointing out a lower state revenue-to-GDP ratio than other G20 countries and neighboring countries in the region.
“We need to take a hard look at ourselves, face reality, and have the courage to ask why we cannot manage our economy so our state revenue can be on par with countries like the Philippines, Mexico,” he said.
The President also highlighted a disconnect between the national economic situation and growth data, noting that despite high economic growth over the past seven years, Indonesia has experienced a shrinking middle class and rising poverty rate.
“Ladies and Gentlemen, let me ask this distinguished assembly, all political parties, community organizations, experts, and professors. How did we achieve such growth with a contracting middle class and rising poverty?”
According to President Prabowo, the situation shows a systemic issue in the management of the national economy while pointing out that the outflow of national wealth has occurred for decades through practices of under-invoicing, transfer pricing, and smuggling, causing a massive loss to the state.
“We must be brave to speak the truth, plain and simple. We must have the courage to state things as they are. We must improve our government institutions,” he said.
Additionally, the President underscored that Indonesia must have sovereignty in determining the prices of oil palm, nickel, gold, and other mining products.
“Our oil palm prices must not be determined by other countries. We must set our own prices,” he said.
For the record, this presentation serves to affirm the Government’s direction in strengthening national sovereignty and the economic system for the greatest benefit of the people. (BPMI of Presidential Secretariat) (DH/MMB)
Read more: https://setkab.go.id/en/president-prabowo-urges-improvement-of-economic-system-state-sovereignty-enforcement/
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Indonesia takes control of 'strategic' commodity exports with new body
Industry frets and stocks fall as government targets palm oil, coal and key minerals
JAKARTA -- Indonesian President Prabowo Subianto on Wednesday announced the formation of a state-owned enterprise that will take over control of exports of key commodities, sparking an outcry in affected industries.
The new entity, Danantara Sumberdaya Indonesia, was officially registered at the Ministry of Law on Tuesday. It is 99% owned by Danantara, the sovereign wealth fund launched by Prabowo in February last year. The president said the regulation setting up the new body is a "strategic measure to strengthen the management of our natural resources commodity exports."
"Sales of all our natural resources, starting from crude palm oil, coal and iron [and steel] -- we will require them to be done through a state enterprise that the government appoints as the sole exporter," Prabowo said in his speech to deliver the 2027 state budget plans to the parliament.
He added that the main goal is to combat practices such as under-invoicing, transfer pricing and the placement of exporters' foreign-exchange earnings overseas. "This policy will optimize our tax revenue," Prabowo said. "We don't want low revenue only because we have no courage to manage our own resources."
A copy of the draft regulation seen by Nikkei Asia specifies coal and palm oil as targeted commodities, as well as "other strategic mineral resources." These may include nickel, bauxite, copper and tin, all of which Indonesia is a major global producer.
Coal, palm oil and nickel are Indonesia's three largest export commodities. Their prices have risen sharply over the past few months, owing to the government's production quota cuts and the Iran war, helping Southeast Asia's largest economy maintain a trade surplus in the first three months of 2026.
The new policy will be implemented in phases starting next month. A presentation slide shared by Prabowo during the parliamentary session suggested that full implementation will begin on Sept. 1, but Rosan Roeslani, CEO of the Danantara fund, told reporters later that it will take full effect in January.
During the transition period, exports of targeted commodities and related transactions will be gradually transferred from individual companies to Danantara Sumberdaya.
"And the state-owned enterprise will conduct transactions and enter into contracts with overseas buyers," the presentation slide said.
Roeslani said Danantara Sumberdaya was formed not to extract margins from export transactions, but to improve transparency in commodity trading. He said exporters will be required to report their transactions comprehensively to verify their compliance with global market prices.
"The prevalence of under-invoicing and overpricing has undoubtedly impacted taxation, royalties and foreign exchange earnings -- even distorting trade in terms of data and reporting overall," he said.
Shares in Indonesian coal, nickel and palm oil producers fell on the news. Coal miners Bumi Resources and Alamtri Resources fell 7% and 4%, respectively; nickel miner Harita Nickel dropped 5%, while Vale Indonesia was down 2%; and palm oil producer Salim Ivomas Pratama lost nearly 3%, while peer London Sumatra was off 2% on Wednesday. The benchmark Jakarta Composite Index was down 0.8%.
"The market reacted negatively because monopsony or a single off-taker setting prices is deemed adverse for open market operations and competitiveness where margins can be optimized," Harry Su, managing director of research at securities company Samuel Sekuritas Indonesia, told Nikkei Asia. "So the concern is lower margins and earnings for commodity producers."
The Indonesian Mining Association (IMA) said the new policy "should be studied thoroughly," taking into consideration the balance between state revenue optimization and the sustainability of the industry. "The implementation must pay attention to business certainty, long-term contracts and a competitive investment climate so that Indonesia's mining industry can maintain trust and continue to grow," said IMA Executive Director Sari Esayanti.
Dedi Dinarto, associate director at strategic advisory FGS Global, said that for investors, "The concern is not simply that Indonesia wants tighter control over strategic commodities, but how that control is exercised."
"Under normal conditions, investors might take more time to assess the policy details," Dinarto said. "But when the rupiah is under pressure, and the equity market is already weak, introducing a new layer of state control mechanism over strategic assets can quickly become a confidence issue."
Eddy Martono, chairman of the Indonesian Palm Oil Association, warned that handing authority over exports to a single entity could harm small and large exporters alike. He questioned Danantara Sumberdaya Indonesia's ability to grasp how exporters often make shipments based on specific orders from various industries. Palm oil is used in products ranging from cooking oil, to biofuels, to soap.
"Exporters usually have their own markets. Indonesia [could] lose these markets if they are not managed properly," Martono said. "Mass layoffs will undoubtedly occur."
The government has been looking for ways to increase state revenue in response to concerns about fiscal deficits and capital outflows that have sent the rupiah tumbling to record lows in the past few weeks.
Economists and businesspeople also have broader concerns about Danantara's management. "Danantara is not very transparent about its financial reports and strategies," said Dipo Satria Ramli, an economist at the Center of Reform on Economics. "Businesspeople will worry that this new state-owned company will act like the Clove Buffer and Marketing Agency (BPPC), which monopolized clove exports during the New Order era [of the former dictator Suharto]."
The regulatory shift is taking place as Prabowo pushes forward with his policy agenda, including higher defense spending, free meals for approximately 80 million children and the development of 80,000 village cooperatives despite rising costs for energy subsidies driven by the Middle East conflict. Nikkei Asia
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Prabowo’s biggest crackdown on tycoons shocked his own officials
In early May, President Prabowo Subianto summoned a handful of his most trusted advisers to his house in south Jakarta to discuss how to find more revenue as surging oil prices stretched Indonesia’s finances.
The small group eventually agreed on a sweeping change that would fundamentally upend one of the most important sectors in the resource-rich Southeast Asian economy: The creation of a new state entity under sovereign wealth fund Danantara to oversee Indonesia’s world-leading exports of palm oil, coal and ferro-alloys, which together amounted to more than $65 billion last year.
Prabowo had long railed against Indonesia’s tycoons, accusing them of harnessing national wealth for personal gain. He believed drastic action was needed to plug leakages that cost Indonesia billions of dollars a year, according to people familiar with the inner workings of the president’s office. They requested anonymity to speak about private discussions, along with about a dozen others in government and industry circles who contributed to this account.
The full extent of the plan was kept under wraps for weeks, held so closely that even top officials at Danantara were in the dark as rumors of the overhaul began spreading on Tuesday throughout the capital, prompting the benchmark stock index to plummet. Danantara executives including CEO Rosan Roeslani urgently sought clarification from Prabowo’s inner circle, which finally came later that day.
Upon finding out, Danantara chief investment officer Pandu Sjahrir immediately started calling industry executives, asking them how it was possible for the one-year-old agency to implement such a brazen strategy. One insider simply replied: “Unworkable.”
Panic also spread through some of Indonesia’s biggest companies. Employees at one of the nation’s top coal firms frantically texted contacts in Prabowo’s government to get confirmation, but received no response. Even on Wednesday, as the president prepared to address parliament, some in the resources sector insisted it was all a hoax.
Yet shortly into Prabowo’s speech, it became evident that the 74-year-old former Special Forces commander was ready for bold action. Railing against colonial powers that seized the nation’s wealth and treated Indonesians as “beneath dogs,” the president said he was increasingly convinced he must enforce a constitutional provision declaring that “the land, water and all natural resources contained within them must be enjoyed by all Indonesians.”
“If we continue on this path, Indonesia will never become prosperous,” Prabowo told the nation’s lawmakers. “We will remain a weak nation, afraid of the dollar exchange rate, afraid of fuel shortages and external shocks, despite our enormous blessings.”
The president then dropped the hammer, confirming that all exports of palm oil, coal, ferro-alloys and potentially other strategic commodities must now be conducted through state-owned enterprises. Citing data showing that Indonesia’s revenue-to-GDP ratio is among the lowest in the world, Prabowo said eliminating practices such as under-invoicing could save the nation $150 billion a year. He also left tycoons with a warning of more measures to come.
“Technology now allows us to monitor illegal activities more effectively, including illegal mining, illegal plantations and hidden wealth,” Prabowo said. “The era of impunity is ending.”
The speech sent shock waves around global markets, with commodity traders scrambling to understand the implications. Indonesian officials clarified later Wednesday that exporters would be required to report their sales to Danantara starting June 1, and three months later the sovereign wealth fund would start handling contracts, shipping and export-payment processes.
Representatives for Danantara and the Government Communications Agency, which handles the president’s communications, didn’t immediately reply to requests for comment.
More broadly, investors are trying to understand where Prabowo is taking Indonesia. While the president has said similar things for months, including at the World Economic Forum in Davos in January, until now it had been mostly rhetoric. His move on Wednesday amounted to arguably the biggest assertion of state control over Indonesia’s economy since the days of former dictator Suharto, who ruled for 32 years and was formerly Prabowo’s father-in-law.
To some in the financial world, that’s not necessarily a bad thing. Stronger government oversight of the resources sector could lead to more money flowing into state coffers, providing funds for infrastructure, healthcare, education and other initiatives to lift living standards in the world’s fourth-most populous nation.
The big question mark is on implementation, an area where Prabowo has struggled. The chaotic rollout on Wednesday only added to wider concerns that have prompted investors to punish Indonesia’s currency and stocks, which are the world’s worst performers this year by a large margin. In cutting its outlook on Indonesia’s credit to negative in March, Fitch Ratings Inc. cited concerns of “consistency and credibility amid growing centralization of policymaking authority.”
“The proof of the policy’s effectiveness will only reveal itself if the government manages to actually increase revenues and reverse the flow of net export duties back to government,” said Brasukra Gumilang Sudjana, country director for Indonesia at Vriens & Partners, a corporate advisory firm.
“Currently the pendulum is swinging towards protectionism,” he added. “But if investors’ perception goes really bad, the government will shift course.”
Since Prabowo took power in late 2024, international investors have been shaken by concerns Prabowo’s administration is embracing a more interventionist economic model that is testing long-held fiscal guardrails and threatens to stifle the private sector. Anxiety deepened after the February 2025 launch of Danantara, which quickly assumed management control of hundreds of billions of dollars in state assets.
Sudden policy moves since then have contributed to a sense of disarray. Top tycoons were pressured into buying “patriot bonds” with below-market yields, long-time Finance Minister Sri Mulyani Indrawati was removed from office and costly flagship programs were rolled out, including a free school meals project. MSCI Inc. in January threatened to downgrade Indonesia to frontier market status, prompting Prabowo to oust key regulators and hurry to meet the index compiler’s repeated demands for greater transparency.
“Investor confidence in Indonesia is being undermined just as the country is seeking large-scale capital inflows to support ambitious growth and development goals in an increasingly challenging economic outlook,” said Laura Schwartz, senior Asia analyst at risk intelligence company Verisk Maplecroft. Wednesday’s news also “contradicts the ‘open for investment’ rhetoric Prabowo and administration representatives regularly seek to portray abroad.”
The creation of an entity to oversee commodity exports has echoes of the recent saga over one of Indonesia’s biggest gold mines. Reports emerged in February that Danantara was considering a takeover of Martabe gold mine, leading to concerns from key investors of Jardine Matheson, a Hong Kong-based conglomerate that controlled the deposit. The move similarly caught Danantara executives by surprise, and the mine’s status remains in limbo.
Now a range of companies are similarly racing to figure out what Prabowo’s latest move means for their operations. Some businesses have started to discuss contingency plans, including scaling back or closing shop in Indonesia entirely if export proceeds are required to flow through Danantara, according to people familiar with the matter. Commodity traders wondered if they would have a job by the end of the year.
Central to those concerns is that payments may face significant delays once they are routed through a third party, the people said. Several also worried about the risks of regulatory pressure by officials once current and past transfer-pricing practices are exposed.
Under-invoicing has long been a widespread problem in Indonesia. The practice involves a company selling to a fully-owned entity overseas at below-market prices, allowing profits from subsequent sales to accrue in lower tax jurisdictions. While Prabowo’s figure of $150 billion in lost revenue is hard to verify, a study by Washington-based research group Global Financial Integrity estimates that Indonesia lost $6.5 billion in tax revenue in 2016 from the practice.
The family member of one major Indonesian tycoon, who asked not to be identified, said they understand why the government wants to tackle the problem, but the current proposal is very harmful to businesses. A better option, they said, would be for the government to require exporters to use letters of credit for transactions, which would address transparency concerns more effectively without requiring the introduction of a centralized entity under Danantara.
“As usual, a lot is riding on implementation,” Barclays PLC economist Brian Tan said. In fluid global macro circumstances, he added, it’s “best when policymakers carefully manage investor sentiment with clear and transparent communication.” Bloomberg/ Japan Times
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Indonesia police name palm oil group Musim Mas as criminal suspects over environmental breaches, government says
By Reuters
JAKARTA, May 20 (Reuters) - Indonesian police in Riau province have named Singapore-based palm oil group Musim Mas as a criminal corporate suspect over alleged environmental violations, they said in a statement published on the provincial government's website.
Indonesia’s New Export Rules May Disrupt Global Palm Oil Trade
Indonesia’s plan to move palm oil exports through a central agency could disrupt global supply of the most widely traded edible oil, consolidate pricing power, and potentially benefit rival producer Malaysia.
President Prabowo Subianto said Wednesday that exports of palm oil, coal and ferroalloys will be required to pass through a state agency as the government moves to strengthen control over natural resources and increase state revenue.
Indonesia accounts for more than half of global palm oil shipments. Its past export-restricting moves to prioritise local sales and boost supplies for biodiesel have lifted prices of palm oil as well as rival edible oils like soyoil and sunflower oil.
The palm oil market was already facing tighter flows from rising biodiesel demand and dry El Nino-related weather. Benchmark Malaysian palm oil futures were recently trading down 0.1%, after having climbed about 2% earlier following Prabowo’s announcement.
Pricing Power
Industry participants said the move could reshape Indonesia’s palm oil trading structure by concentrating pricing power and altering existing market mechanisms.
“A centralised export mechanism could undermine the current market-based trading ecosystem by concentrating pricing power within a state-linked entity,” said M.R. Chandran, the former head of the Malaysian Palm Oil Association.
“This may increase market uncertainty, reduce transparency and introduce greater political influence into commercial trade flows.”
Chandran said Malaysia could benefit as buyers looking for more stable policies and supply diversification may turn more to its palm oil.
Eddy Martono, chairman of the Indonesian Palm Oil Association, said established trade relationships with overseas buyers could be at risk if export flows are centralised without careful management.
Indonesia has millions of small growers who could be at a disadvantage under the new structure, said Mansuetus Darto of POPSI, a group representing small palm oil growers.
“When the number of buyers shrinks and market access is controlled by a single point, farmers’ bargaining power automatically decreases,” Darto said. “In such a situation, farmers will increasingly become price takers.”
Indonesia was already cracking down on illegal oil palm plantations and handed over 4.12 million hectares of estates to state-owned Agrinas Palma Nusantara.
The market is seeking certainty over supplies as El Nino-related weather is expected to trim production in the second half of the year. Indonesia’s move is likely to tighten supply further, said a Mumbai-based dealer with a global trading house, who declined to be named in line with company policy.
(With inputs from Reuters) Strat News Global
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Indonesia’s plan to tighten CPO exports may advantage Malaysia?
JAKARTA – Indonesia’s plan to centralise palm oil exports through a state agency has raised concerns among global industry players over potential supply disruptions and increased volatility in global vegetable oil prices.
As reported by Reuters, President Prabowo Subianto previously announced that the government would require exports of palm oil, coal, and ferronickel to be conducted through a special state body. The policy forms part of a broader strategy to tighten control over natural resources while boosting state revenues.
Indonesia currently accounts for more than half of global palm oil exports. Past export restrictions imposed by Indonesia have consistently driven up global palm oil prices, including soybean oil and sunflower oil as substitute products.
The global palm oil market is already under pressure from rising biodiesel demand and the impact of dry El Niño weather conditions on production. Following the Indonesian government’s announcement, Malaysian palm oil futures briefly jumped around 2% before easing slightly.
“The palm oil market is trying to adjust to rising energy prices triggered by the conflict in the Middle East,” said Aashish Acharya, Vice President of Patanjali Foods. “Indonesia’s move is likely to add another layer of uncertainty and increase volatility in the market.”
Industry players believe export centralisation could alter Indonesia’s palm oil trading structure by concentrating pricing power in state-affiliated entities.
“A centralised export mechanism could weaken the current market-based trading ecosystem by concentrating pricing power within entities linked to the state,” said former head of the Malaysian Palm Oil Association, M.R. Chandran.
“This could increase market uncertainty, reduce transparency, and introduce greater political influence into commercial trade flows.”
According to Chandran, such conditions could instead benefit Malaysia as the world’s second-largest palm oil producer, as global buyers may seek supplies from countries with more stable policies.
Chairman of the Indonesian Palm Oil Association (GAPKI), Eddy Martono, also warned that long-standing trade relationships with international buyers could be disrupted if export centralisation is implemented without careful management.
Similar concerns have been raised by palm oil farmer groups. Mansuetus Darto, a representative of the Palm Oil Farmers Union (POPSI), said millions of smallholders risk losing bargaining power if market access is controlled through a single channel.
“When the number of buyers shrinks and market access is controlled by one party, farmers’ bargaining position automatically declines,” Darto said. “In such a situation, farmers will increasingly become price takers.”
Amid the plan, the government is also continuing to tighten oversight of illegal palm oil plantations and has handed over 4.12 million hectares of land to state-owned company Agrinas Palma Nusantara. (DH/LM) IDN Financials
President Prabowo Urges Improvement of Economic System, State Sovereignty Enforcement
By Office of Assistant to Deputy Cabinet Secretary for State Documents & Translation Date 20 Mei 2026
Fundamental change to national economic governance is imperative, President Prabowo Subianto has said.
The President made the statement during the Presentation of the Macroeconomic Framework and Fiscal Policy Principles for the 2027 State Budget Bill at the Plenary Session Room of Nusantara Building, the Parliamentary Complex, Jakarta, on Wednesday (05/20).
The Head of State highlighted the immense potential of Indonesia’s wealth, which he assessed had not yet fully brought prosperity to the people.
According to President Prabowo, Indonesia has strong capital to transform into a developed and prosperous country with its strategic geographical position, vast natural resources, and demographic bonus.
“Ladies and Gentlemen, we actually have very strong capital to achieve this goal and vision. Our geographical position is highly strategic. Tens of percent of global trade passes through our waters,” he said.
President Prabowo also underscored the importance of maintaining state sovereignty, especially in the maritime sector, since illegal fishing by foreign vessels remains rampant in Indonesian waters.
“Every night, tens of thousands of foreign-flagged vessels illegally and unlawfully plunder our marine wealth. We must enforce sovereignty over our own waters,” he stressed.
On that occasion, President Prabowo also highlighted the vast contribution of Indonesia’s strategic commodities to state revenues, adding that Indonesia is the world’s largest exporter of palm oil, coal, and ferroalloy.
“Revenue from palm oil export reached US$23 billion, equal to Rp391 trillion in 2025. Indonesia is also the largest coal exporter in the world. Coal export revenue amounted to US$30 billion, equal to Rp510 trillion in 2025,” he said.
Despite its abundant natural resources, the President stated that Indonesia’s fiscal capacity still lags behind other countries, pointing out a lower state revenue-to-GDP ratio than other G20 countries and neighboring countries in the region.
“We need to take a hard look at ourselves, face reality, and have the courage to ask why we cannot manage our economy so our state revenue can be on par with countries like the Philippines, Mexico,” he said.
The President also highlighted a disconnect between the national economic situation and growth data, noting that despite high economic growth over the past seven years, Indonesia has experienced a shrinking middle class and rising poverty rate.
“Ladies and Gentlemen, let me ask this distinguished assembly, all political parties, community organizations, experts, and professors. How did we achieve such growth with a contracting middle class and rising poverty?”
According to President Prabowo, the situation shows a systemic issue in the management of the national economy while pointing out that the outflow of national wealth has occurred for decades through practices of under-invoicing, transfer pricing, and smuggling, causing a massive loss to the state.
“We must be brave to speak the truth, plain and simple. We must have the courage to state things as they are. We must improve our government institutions,” he said.
Additionally, the President underscored that Indonesia must have sovereignty in determining the prices of oil palm, nickel, gold, and other mining products.
“Our oil palm prices must not be determined by other countries. We must set our own prices,” he said.
For the record, this presentation serves to affirm the Government’s direction in strengthening national sovereignty and the economic system for the greatest benefit of the people. (BPMI of Presidential Secretariat) (DH/MMB)
Read more: https://setkab.go.id/en/president-prabowo-urges-improvement-of-economic-system-state-sovereignty-enforcement/
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Indonesia takes control of 'strategic' commodity exports with new body
Industry frets and stocks fall as government targets palm oil, coal and key minerals
JAKARTA -- Indonesian President Prabowo Subianto on Wednesday announced the formation of a state-owned enterprise that will take over control of exports of key commodities, sparking an outcry in affected industries.
The new entity, Danantara Sumberdaya Indonesia, was officially registered at the Ministry of Law on Tuesday. It is 99% owned by Danantara, the sovereign wealth fund launched by Prabowo in February last year. The president said the regulation setting up the new body is a "strategic measure to strengthen the management of our natural resources commodity exports."
"Sales of all our natural resources, starting from crude palm oil, coal and iron [and steel] -- we will require them to be done through a state enterprise that the government appoints as the sole exporter," Prabowo said in his speech to deliver the 2027 state budget plans to the parliament.
He added that the main goal is to combat practices such as under-invoicing, transfer pricing and the placement of exporters' foreign-exchange earnings overseas. "This policy will optimize our tax revenue," Prabowo said. "We don't want low revenue only because we have no courage to manage our own resources."
A copy of the draft regulation seen by Nikkei Asia specifies coal and palm oil as targeted commodities, as well as "other strategic mineral resources." These may include nickel, bauxite, copper and tin, all of which Indonesia is a major global producer.
Coal, palm oil and nickel are Indonesia's three largest export commodities. Their prices have risen sharply over the past few months, owing to the government's production quota cuts and the Iran war, helping Southeast Asia's largest economy maintain a trade surplus in the first three months of 2026.
The new policy will be implemented in phases starting next month. A presentation slide shared by Prabowo during the parliamentary session suggested that full implementation will begin on Sept. 1, but Rosan Roeslani, CEO of the Danantara fund, told reporters later that it will take full effect in January.
During the transition period, exports of targeted commodities and related transactions will be gradually transferred from individual companies to Danantara Sumberdaya.
"And the state-owned enterprise will conduct transactions and enter into contracts with overseas buyers," the presentation slide said.
Roeslani said Danantara Sumberdaya was formed not to extract margins from export transactions, but to improve transparency in commodity trading. He said exporters will be required to report their transactions comprehensively to verify their compliance with global market prices.
"The prevalence of under-invoicing and overpricing has undoubtedly impacted taxation, royalties and foreign exchange earnings -- even distorting trade in terms of data and reporting overall," he said.
Shares in Indonesian coal, nickel and palm oil producers fell on the news. Coal miners Bumi Resources and Alamtri Resources fell 7% and 4%, respectively; nickel miner Harita Nickel dropped 5%, while Vale Indonesia was down 2%; and palm oil producer Salim Ivomas Pratama lost nearly 3%, while peer London Sumatra was off 2% on Wednesday. The benchmark Jakarta Composite Index was down 0.8%.
"The market reacted negatively because monopsony or a single off-taker setting prices is deemed adverse for open market operations and competitiveness where margins can be optimized," Harry Su, managing director of research at securities company Samuel Sekuritas Indonesia, told Nikkei Asia. "So the concern is lower margins and earnings for commodity producers."
The Indonesian Mining Association (IMA) said the new policy "should be studied thoroughly," taking into consideration the balance between state revenue optimization and the sustainability of the industry. "The implementation must pay attention to business certainty, long-term contracts and a competitive investment climate so that Indonesia's mining industry can maintain trust and continue to grow," said IMA Executive Director Sari Esayanti.
Dedi Dinarto, associate director at strategic advisory FGS Global, said that for investors, "The concern is not simply that Indonesia wants tighter control over strategic commodities, but how that control is exercised."
"Under normal conditions, investors might take more time to assess the policy details," Dinarto said. "But when the rupiah is under pressure, and the equity market is already weak, introducing a new layer of state control mechanism over strategic assets can quickly become a confidence issue."
Eddy Martono, chairman of the Indonesian Palm Oil Association, warned that handing authority over exports to a single entity could harm small and large exporters alike. He questioned Danantara Sumberdaya Indonesia's ability to grasp how exporters often make shipments based on specific orders from various industries. Palm oil is used in products ranging from cooking oil, to biofuels, to soap.
"Exporters usually have their own markets. Indonesia [could] lose these markets if they are not managed properly," Martono said. "Mass layoffs will undoubtedly occur."
The government has been looking for ways to increase state revenue in response to concerns about fiscal deficits and capital outflows that have sent the rupiah tumbling to record lows in the past few weeks.
Economists and businesspeople also have broader concerns about Danantara's management. "Danantara is not very transparent about its financial reports and strategies," said Dipo Satria Ramli, an economist at the Center of Reform on Economics. "Businesspeople will worry that this new state-owned company will act like the Clove Buffer and Marketing Agency (BPPC), which monopolized clove exports during the New Order era [of the former dictator Suharto]."
The regulatory shift is taking place as Prabowo pushes forward with his policy agenda, including higher defense spending, free meals for approximately 80 million children and the development of 80,000 village cooperatives despite rising costs for energy subsidies driven by the Middle East conflict. Nikkei Asia
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Prabowo’s biggest crackdown on tycoons shocked his own officials
In early May, President Prabowo Subianto summoned a handful of his most trusted advisers to his house in south Jakarta to discuss how to find more revenue as surging oil prices stretched Indonesia’s finances.
The small group eventually agreed on a sweeping change that would fundamentally upend one of the most important sectors in the resource-rich Southeast Asian economy: The creation of a new state entity under sovereign wealth fund Danantara to oversee Indonesia’s world-leading exports of palm oil, coal and ferro-alloys, which together amounted to more than $65 billion last year.
Prabowo had long railed against Indonesia’s tycoons, accusing them of harnessing national wealth for personal gain. He believed drastic action was needed to plug leakages that cost Indonesia billions of dollars a year, according to people familiar with the inner workings of the president’s office. They requested anonymity to speak about private discussions, along with about a dozen others in government and industry circles who contributed to this account.
The full extent of the plan was kept under wraps for weeks, held so closely that even top officials at Danantara were in the dark as rumors of the overhaul began spreading on Tuesday throughout the capital, prompting the benchmark stock index to plummet. Danantara executives including CEO Rosan Roeslani urgently sought clarification from Prabowo’s inner circle, which finally came later that day.
Upon finding out, Danantara chief investment officer Pandu Sjahrir immediately started calling industry executives, asking them how it was possible for the one-year-old agency to implement such a brazen strategy. One insider simply replied: “Unworkable.”
Panic also spread through some of Indonesia’s biggest companies. Employees at one of the nation’s top coal firms frantically texted contacts in Prabowo’s government to get confirmation, but received no response. Even on Wednesday, as the president prepared to address parliament, some in the resources sector insisted it was all a hoax.
Yet shortly into Prabowo’s speech, it became evident that the 74-year-old former Special Forces commander was ready for bold action. Railing against colonial powers that seized the nation’s wealth and treated Indonesians as “beneath dogs,” the president said he was increasingly convinced he must enforce a constitutional provision declaring that “the land, water and all natural resources contained within them must be enjoyed by all Indonesians.”
“If we continue on this path, Indonesia will never become prosperous,” Prabowo told the nation’s lawmakers. “We will remain a weak nation, afraid of the dollar exchange rate, afraid of fuel shortages and external shocks, despite our enormous blessings.”
The president then dropped the hammer, confirming that all exports of palm oil, coal, ferro-alloys and potentially other strategic commodities must now be conducted through state-owned enterprises. Citing data showing that Indonesia’s revenue-to-GDP ratio is among the lowest in the world, Prabowo said eliminating practices such as under-invoicing could save the nation $150 billion a year. He also left tycoons with a warning of more measures to come.
“Technology now allows us to monitor illegal activities more effectively, including illegal mining, illegal plantations and hidden wealth,” Prabowo said. “The era of impunity is ending.”
The speech sent shock waves around global markets, with commodity traders scrambling to understand the implications. Indonesian officials clarified later Wednesday that exporters would be required to report their sales to Danantara starting June 1, and three months later the sovereign wealth fund would start handling contracts, shipping and export-payment processes.
Representatives for Danantara and the Government Communications Agency, which handles the president’s communications, didn’t immediately reply to requests for comment.
More broadly, investors are trying to understand where Prabowo is taking Indonesia. While the president has said similar things for months, including at the World Economic Forum in Davos in January, until now it had been mostly rhetoric. His move on Wednesday amounted to arguably the biggest assertion of state control over Indonesia’s economy since the days of former dictator Suharto, who ruled for 32 years and was formerly Prabowo’s father-in-law.
To some in the financial world, that’s not necessarily a bad thing. Stronger government oversight of the resources sector could lead to more money flowing into state coffers, providing funds for infrastructure, healthcare, education and other initiatives to lift living standards in the world’s fourth-most populous nation.
The big question mark is on implementation, an area where Prabowo has struggled. The chaotic rollout on Wednesday only added to wider concerns that have prompted investors to punish Indonesia’s currency and stocks, which are the world’s worst performers this year by a large margin. In cutting its outlook on Indonesia’s credit to negative in March, Fitch Ratings Inc. cited concerns of “consistency and credibility amid growing centralization of policymaking authority.”
“The proof of the policy’s effectiveness will only reveal itself if the government manages to actually increase revenues and reverse the flow of net export duties back to government,” said Brasukra Gumilang Sudjana, country director for Indonesia at Vriens & Partners, a corporate advisory firm.
“Currently the pendulum is swinging towards protectionism,” he added. “But if investors’ perception goes really bad, the government will shift course.”
Since Prabowo took power in late 2024, international investors have been shaken by concerns Prabowo’s administration is embracing a more interventionist economic model that is testing long-held fiscal guardrails and threatens to stifle the private sector. Anxiety deepened after the February 2025 launch of Danantara, which quickly assumed management control of hundreds of billions of dollars in state assets.
Sudden policy moves since then have contributed to a sense of disarray. Top tycoons were pressured into buying “patriot bonds” with below-market yields, long-time Finance Minister Sri Mulyani Indrawati was removed from office and costly flagship programs were rolled out, including a free school meals project. MSCI Inc. in January threatened to downgrade Indonesia to frontier market status, prompting Prabowo to oust key regulators and hurry to meet the index compiler’s repeated demands for greater transparency.
“Investor confidence in Indonesia is being undermined just as the country is seeking large-scale capital inflows to support ambitious growth and development goals in an increasingly challenging economic outlook,” said Laura Schwartz, senior Asia analyst at risk intelligence company Verisk Maplecroft. Wednesday’s news also “contradicts the ‘open for investment’ rhetoric Prabowo and administration representatives regularly seek to portray abroad.”
The creation of an entity to oversee commodity exports has echoes of the recent saga over one of Indonesia’s biggest gold mines. Reports emerged in February that Danantara was considering a takeover of Martabe gold mine, leading to concerns from key investors of Jardine Matheson, a Hong Kong-based conglomerate that controlled the deposit. The move similarly caught Danantara executives by surprise, and the mine’s status remains in limbo.
Now a range of companies are similarly racing to figure out what Prabowo’s latest move means for their operations. Some businesses have started to discuss contingency plans, including scaling back or closing shop in Indonesia entirely if export proceeds are required to flow through Danantara, according to people familiar with the matter. Commodity traders wondered if they would have a job by the end of the year.
Central to those concerns is that payments may face significant delays once they are routed through a third party, the people said. Several also worried about the risks of regulatory pressure by officials once current and past transfer-pricing practices are exposed.
Under-invoicing has long been a widespread problem in Indonesia. The practice involves a company selling to a fully-owned entity overseas at below-market prices, allowing profits from subsequent sales to accrue in lower tax jurisdictions. While Prabowo’s figure of $150 billion in lost revenue is hard to verify, a study by Washington-based research group Global Financial Integrity estimates that Indonesia lost $6.5 billion in tax revenue in 2016 from the practice.
The family member of one major Indonesian tycoon, who asked not to be identified, said they understand why the government wants to tackle the problem, but the current proposal is very harmful to businesses. A better option, they said, would be for the government to require exporters to use letters of credit for transactions, which would address transparency concerns more effectively without requiring the introduction of a centralized entity under Danantara.
“As usual, a lot is riding on implementation,” Barclays PLC economist Brian Tan said. In fluid global macro circumstances, he added, it’s “best when policymakers carefully manage investor sentiment with clear and transparent communication.” Bloomberg/ Japan Times
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Indonesia police name palm oil group Musim Mas as criminal suspects over environmental breaches, government says
By Reuters
JAKARTA, May 20 (Reuters) - Indonesian police in Riau province have named Singapore-based palm oil group Musim Mas as a criminal corporate suspect over alleged environmental violations, they said in a statement published on the provincial government's website.
- Musim Mas' activities "are strongly suspected to have damaged forests and cleared the buffer zone of the Air Hitam River" in the region of Pelalawan, said Riau police official Ade Kuncoro Ridwan in a statement published on Monday.
- Musim Mas said on Wednesday the company respected the ongoing legal processes. A company official said it had safeguarded the environment around the river.
- Ridwan said the activities of the group first came under suspicion in January 2025, adding that Musim Mas planted palm trees very close to the river, eroding its surrounding soil and causing a landslide.
- The ecological damage is valued at 187.8 billion rupiah ($10.7 million), Ridwan said.
- Police characterised the activities as criminal, which carries a maximum 10-year prison sentence, Ridwan added. Reuters
Indonesia’s New Export Rules May Disrupt Global Palm Oil Trade
Indonesia’s plan to move palm oil exports through a central agency could disrupt global supply of the most widely traded edible oil, consolidate pricing power, and potentially benefit rival producer Malaysia.
President Prabowo Subianto said Wednesday that exports of palm oil, coal and ferroalloys will be required to pass through a state agency as the government moves to strengthen control over natural resources and increase state revenue.
Indonesia accounts for more than half of global palm oil shipments. Its past export-restricting moves to prioritise local sales and boost supplies for biodiesel have lifted prices of palm oil as well as rival edible oils like soyoil and sunflower oil.
The palm oil market was already facing tighter flows from rising biodiesel demand and dry El Nino-related weather. Benchmark Malaysian palm oil futures were recently trading down 0.1%, after having climbed about 2% earlier following Prabowo’s announcement.
Pricing Power
Industry participants said the move could reshape Indonesia’s palm oil trading structure by concentrating pricing power and altering existing market mechanisms.
“A centralised export mechanism could undermine the current market-based trading ecosystem by concentrating pricing power within a state-linked entity,” said M.R. Chandran, the former head of the Malaysian Palm Oil Association.
“This may increase market uncertainty, reduce transparency and introduce greater political influence into commercial trade flows.”
Chandran said Malaysia could benefit as buyers looking for more stable policies and supply diversification may turn more to its palm oil.
Eddy Martono, chairman of the Indonesian Palm Oil Association, said established trade relationships with overseas buyers could be at risk if export flows are centralised without careful management.
Indonesia has millions of small growers who could be at a disadvantage under the new structure, said Mansuetus Darto of POPSI, a group representing small palm oil growers.
“When the number of buyers shrinks and market access is controlled by a single point, farmers’ bargaining power automatically decreases,” Darto said. “In such a situation, farmers will increasingly become price takers.”
Indonesia was already cracking down on illegal oil palm plantations and handed over 4.12 million hectares of estates to state-owned Agrinas Palma Nusantara.
The market is seeking certainty over supplies as El Nino-related weather is expected to trim production in the second half of the year. Indonesia’s move is likely to tighten supply further, said a Mumbai-based dealer with a global trading house, who declined to be named in line with company policy.
(With inputs from Reuters) Strat News Global
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Indonesia’s plan to tighten CPO exports may advantage Malaysia?
JAKARTA – Indonesia’s plan to centralise palm oil exports through a state agency has raised concerns among global industry players over potential supply disruptions and increased volatility in global vegetable oil prices.
As reported by Reuters, President Prabowo Subianto previously announced that the government would require exports of palm oil, coal, and ferronickel to be conducted through a special state body. The policy forms part of a broader strategy to tighten control over natural resources while boosting state revenues.
Indonesia currently accounts for more than half of global palm oil exports. Past export restrictions imposed by Indonesia have consistently driven up global palm oil prices, including soybean oil and sunflower oil as substitute products.
The global palm oil market is already under pressure from rising biodiesel demand and the impact of dry El Niño weather conditions on production. Following the Indonesian government’s announcement, Malaysian palm oil futures briefly jumped around 2% before easing slightly.
“The palm oil market is trying to adjust to rising energy prices triggered by the conflict in the Middle East,” said Aashish Acharya, Vice President of Patanjali Foods. “Indonesia’s move is likely to add another layer of uncertainty and increase volatility in the market.”
Industry players believe export centralisation could alter Indonesia’s palm oil trading structure by concentrating pricing power in state-affiliated entities.
“A centralised export mechanism could weaken the current market-based trading ecosystem by concentrating pricing power within entities linked to the state,” said former head of the Malaysian Palm Oil Association, M.R. Chandran.
“This could increase market uncertainty, reduce transparency, and introduce greater political influence into commercial trade flows.”
According to Chandran, such conditions could instead benefit Malaysia as the world’s second-largest palm oil producer, as global buyers may seek supplies from countries with more stable policies.
Chairman of the Indonesian Palm Oil Association (GAPKI), Eddy Martono, also warned that long-standing trade relationships with international buyers could be disrupted if export centralisation is implemented without careful management.
Similar concerns have been raised by palm oil farmer groups. Mansuetus Darto, a representative of the Palm Oil Farmers Union (POPSI), said millions of smallholders risk losing bargaining power if market access is controlled through a single channel.
“When the number of buyers shrinks and market access is controlled by one party, farmers’ bargaining position automatically declines,” Darto said. “In such a situation, farmers will increasingly become price takers.”
Amid the plan, the government is also continuing to tighten oversight of illegal palm oil plantations and has handed over 4.12 million hectares of land to state-owned company Agrinas Palma Nusantara. (DH/LM) IDN Financials
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May 20, 2026
Indonesia to bring commodity exports under centralised control
Summary
Prabowo said in a fiery speech to parliament that Indonesia had lost as much as $908 billion in revenues in the last 34 years because its commodities were being sold on the cheap, adding that key exports like palm oil, coal and ferroalloy would be sold via a central government-run enterprise.
Indonesia, a global commodities powerhouse, is the world's largest exporter of thermal coal and palm oil.
"Today the Indonesian government that I lead will issue a regulation on management of commodity exports," Prabowo said.
"The issuance of this regulation is a strategic step to strengthen management of commodity exports," he said.
"All sales of our resources, from palm oil, coal must be through a (state-operated enterprise) selected by the government ... as sole exporters," he added.
Prabowo's remarks confirm earlier accounts from two sources familiar with the matter, who said Indonesia was planning the move as part of a drive to strengthen government oversight over its natural resources.
TRANSITION PERIOD
Expanding on Prabowo's announcement, Senior Economic Minister Airlangga Hartarto said in the first stage the commodities affected will be coal, palm oil and ferroalloy, and every three months the government will evaluate which commodities can be added to the plan.
He added that there will be a three-month transition period in which exporters and buyers can continue to do business as usual, but the government-appointed entity would monitor export transactions.
The chief of sovereign wealth fund Danantara Indonesia, Rosan Roeslani, speaking alongside Airlangga, said that this period could be extended to the end of the year.
At the end of the transition period, all exports will have to be done through the state-appointed firm, which will be overseen by Danantara, he said.
In addition, as part of another regulation, starting June 1 all exporters of natural resources from Indonesia must store 100% of their export earnings in Indonesian state-owned banks, Airlangga said. Reuters
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Indonesian Palm Oil Exporters Must Report to Danantara’s Arm Next Month
Jakarta. Indonesia’s palm oil firms will have to report to a new state-run export agency starting in June, as the resource-rich country wages war against under-invoicing.
President Prabowo Subianto wants to impose greater state control over Indonesia's "strategic" commodity exports. The move came after Indonesia lost around $908 billion from 34 years of rampant export under-invoicing. To this end, the sovereign wealth fund Danantara has set up a new "marketing arm" aimed at stepping up export governance.
Palm oil will be subject to this new system as the commodity makes up roughly 8% of Indonesia’s total exports. The same goes for coal and ferroalloy.
The fund’s boss Rosan Roeslani said that the body -- known as Danantara Sumberdaya Indonesia -- would start by making sure that exporters are being truthful in their reports.
“The body will comprehensively check whether the figure mentioned in their [trade documents] aligns with the global market index,” Rosan told the press in Jakarta on Tuesday.Panduan Kota & Daerah
"This is about [improving] the transactions' transparency."
Jakarta will gradually introduce the scheme next month before the system fully goes live in September. During the three-month transition period, companies will handle their transactions with the foreign buyers, while handing over the documentation and paperwork to the new agency.
“Starting in September, Danantara Sumberdaya Indonesia will be in charge of all transaction processes, contracts, shipments, and payments,” senior minister Airlangga Hartarto said.
Indonesia is the world’s largest palm oil supplier. This commodity -- found in half supermarket goods -- has also contributed $23 billion in export earnings throughout 2025.
In a fiery fiscal policy speech, Prabowo slammed the “under-invoicing” as fraud.
“Many exporters deliberately report much lower export values than the actual transaction value through overseas shell companies they themselves control,” Prabowo said in a room full of the country's lawmakers and senior officials earlier that day. Jakarta Globe
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Indonesia firms in palm oil fraud probe supplied fuel majors
Indonesian companies targeted in a palm oil fraud probe supplied European firms including Italian energy giant Eni and Finnish sustainable aviation fuel leader Neste, an investigation by AFP and SourceMaterial has found.
The links raise fresh questions about supply chains in the biofuel sector, experts said, and follow persistent allegations of fraud involving palm oil products used as fuel feedstocks.
There is no suggestion that Eni, Neste or other companies supplied by Indonesian firms implicated in the probe had knowledge of or involvement in fraud.
The Indonesian probe alleges local companies and government officials conspired to pass off palm oil as a waste byproduct called palm oil mill effluent (POME), including by offering bribes.
For the Indonesian government, this is a financial issue -- the higher tax on palm oil means labelling the product as POME allegedly defrauded authorities of millions of dollars in revenue.
For customers, the allegations threaten sustainability pledges. Palm oil has long been associated with deforestation, and both Eni and Neste have officially removed it from their supply chains.
The European Union will ban its use in biofuel from 2030.
Both Eni and Neste received multiple shipments described as POME from Indonesian companies accused of mislabelling palm oil as the waste byproduct.
Experts and campaigners said the alleged fraud illustrated the sector's oversight problems.
"The EU rightly decided to phase out palm oil biofuels in 2019 because of its links to deforestation," said Cian Delaney, biofuels campaigner at environmental NGO Transport and Environment (T&E).
"But disguising palm oil as waste products like POME... has been far too easy for suppliers and traders. Verification and certification of these imports is clearly failing," Delaney said.
Persistent fraud claimsEni said it had no direct contracts with accused companies and received shipments through an accredited supplier who "immediately suspended all operations with the companies involved in the investigation".
The supplier, Enviq, did not respond to requests for comment.
Neste also said it had instructed its supplier to exclude implicated companies from its supply chain after the Indonesian investigation was announced.
It said all deliveries linked to suppliers implicated in the Indonesian investigation had previously been sampled by independent surveyors who confirmed they "met the specifications for palm-derived waste feedstock."
Indonesia has long suspected POME fraud and last year temporarily limited exports after trade data recorded volumes far exceeding estimated available supply.
Then last month, Indonesian authorities arrested 11 people, including customs officials, accused of defrauding the government between 2022 and 2024 by labelling palm oil as POME.
The attorney general's office (AGO) gave only the initials of those arrested and their firms.
AFP and SourceMaterial used trade data, including some supplied by T&E, shareholder agreements, and customs documents obtained through freedom of information requests to ascertain the identities of three of those arrested.
A source in the AGO confirmed the findings.
Among them is "TNY", a shareholder in Green Product International, and director of a company identified only as TEO.
This refers to Tony, who like many Indonesians uses a single name. Tony is director of Tanimas Edible Oil and a shareholder in Green Product International.
Green Product International was the source of multiple shipments of a product labelled as POME to Eni and Neste between 2023 and 2024.
There is no conclusive evidence as to what those shipments contained.
Green Product International did not respond to a request for comment.
AFP and SourceMaterial identified two other companies implicated in the probe, Surya Inti Primakarya, whose director, Van Ricardo, was arrested, and Bumi Mulia Makmur, whose director, Erwin, was arrested.
Both signed off on shipments to Eni between 2022 and 2024.
Calls and messages to both companies seeking comment were not answered.
All three men remain in custody, the AGO said.
'Independent scrutiny'Eni said the company that handled its shipments was certified by International Sustainability and Carbon Certification (ISCC), an EU-certified verifier of the bloc's palm oil product imports.
An ISCC spokesperson said Surya Inti Primakarya is "currently excluded from recertification" and Bumi Mulia Makmur was "previously excluded".
But Green Product International still holds a valid certificate, the ISCC's online registry shows. The spokesperson did not respond when asked whether that accreditation would be reexamined.
Other companies Green Product International supplied indirectly include Swiss trader Kolmar, which declined to provide an on-record statement, as well as Spanish oil major Repsol and American multinational Cargill, neither of which replied to requests for comment.
Allegations of fraud in the POME sector have circulated for years, given high demand for use as a sustainable fuel feedstock, and the higher taxes sometimes levied on palm oil.
Some analyses have suggested the amount of POME being used in the EU and Britain exceeds available global supply, suggesting widespread mislabelling, though some industry groups have disputed those calcuations.
Ireland has ended incentives for POME's use in biofuels, and Germany will follow suit next year.
James Cogan, head of public policy at ClonBio, an Irish biofuel maker that only sources from the EU, said verification is so problematic that buyers and regulators should be suspicious of any shipment marked as POME.
"I would challenge any POME or POME-based biofuels processor to publish their volumes, sources and paperwork, to allow public and independent scrutiny," he said. AFP
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Indonesian markets slump on commodity export control speculation
(May 19): Indonesian markets fell on Tuesday as speculation mounted that the government will centralise commodity exports to control capital flows and shore up a plunging currency. Palm oil futures rose.
The benchmark Jakarta Composite Index fell 3.5% on Tuesday — taking its year-to-date loss to more than 26% as the world’s worst equity performer — with energy and basic material stocks leading the decline. The currency slid 0.3% against the dollar to another record low, while palm oil futures in Malaysia reversed earlier losses to climb as much as 2.2%.
Traders attributed the slump to speculation about the formation of a special agency for strategic commodity exports including coal, crude palm oil and minerals. Such an organisation would raise concerns about greater state control over a critical industry but also potentially help bolster government finances amid a widening fiscal deficit.
The concerns are amplified by the outsized role of commodities in Indonesia’s economy. The country is a major exporter as well as the world’s largest palm oil producer, so any changes to export flows can impact currency stability as well as foreign-exchange reserves.
“The market is reacting negatively because investors are worried this could add another layer of state control and policy uncertainty for commodity exporters,” said Mohit Mirpuri, a partner at SGMC Capital Pte Ltd. “In my view, the broader direction is clear: the government is doing everything it can to defend the rupiah and keep export proceeds onshore.”
Representatives of sovereign wealth fund Danantara Indonesia, the Trade Ministry and the Finance Ministry did not immediately respond to requests for comments.
The stock decline underscores mounting pressure on Indonesian authorities to stabilise markets amid high oil prices risks, with the rupiah weakening by nearly 6% this year. Investor sentiment has also been rattled by an upcoming MSCI Inc decision on a potential downgrade to frontier markets following the recent removal of several large companies from its indices.
Fitch Ratings and Moody’s Ratings have also cut their credit rating outlooks on worries about fiscal risks and policy uncertainty.
Pruksa Iamthongthong, the head of Asia-Pacific equities at Aberdeen Investments, told Bloomberg TV earlier that rising risks warrant a cautious approach to local stocks despite cheap valuations.
“We have the currency pressure on Indonesia as we speak. We have also lower confidence within the economy as well, and I think the government is also going to manage through the current account deficit situation as well,” she said. “So, there are quite a few headwinds.” The Edge
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US biofuel policies boost palm oil competitiveness, support CPO price stability
KUALA LUMPUR: Policy developments in the US biofuel sector, particularly measures aimed at increasing demand for biofuel feedstocks such as soybean oil, have enhanced palm oil's price competitiveness in key export markets and continued to support global demand.
Stronger demand for soybean oil in the United States, driven by expanding biodiesel and renewable fuel requirements, has contributed to firmer soybean oil prices, indirectly improving palm oil's attractiveness among global buyers.
According to the Malaysian Palm Oil Board (MPOB), palm oil continues to be the most competitively priced vegetable oil in India, while Malaysian palm olein is trading at a slight discount to Argentine soybean oil, a pricing advantage expected to sustain demand for palm oil in the near term.
In the first quarter of 2026, combined palm oil exports from Malaysia, Indonesia and Thailand increased by 1.9 million tonnes.
However, the board expects the momentum to weaken between April and September, with industry analyst Oil World forecasting combined exports from the three producing countries to decline by two million tonnes in the second and third quarters, mainly due to lower shipments from Indonesia.
Malaysia's palm oil exports are projected to rise by 400,000 tonnes during the period, while Indonesia's exports are expected to fall by 1.7 million tonnes as more supply is diverted for domestic energy consumption.
As a result, MPOB said a significant build-up in palm oil inventories is unlikely during Southeast Asia's upcoming peak production season.
The board also maintained that vegetable oil prices still have room to trend higher, arguing that the recent correction was likely driven by funds and speculators taking profits.
"Supply risks also remain due to unresolved geopolitical tensions and rising El Niño risk, which could add uncertainty to global vegetable oil supply in the upcoming season," MPOB said.
The board noted that El Niño conditions typically bring drier-than-normal weather to Southeast Asia, reducing rainfall and soil moisture levels, which could potentially disrupt agricultural output across the region.
The Malaysian Meteorological Department expects El Niño conditions to emerge between June and July and potentially persist into early 2027.
Meanwhile, MPOB expects crude palm oil prices to remain stable at around RM4,400 per tonne in June, as global biofuel policies continue to strengthen demand for vegetable oils.
It said that Malaysia's palm oil inventories edged up marginally to 2.31 million tonnes in April, driven by a seasonal increase in output.
Palm oil production typically rises between March and October as drier weather conditions improve harvesting productivity and boost oil extraction rates from fresh fruit bunches.
Malaysia's cumulative palm oil exports climbed 25.5 per cent, or 1.1 million tonnes, to 5.38 million tonnes in the first four months of 2026, the highest level recorded since 2019. However, exports fell 14.3 per cent month-on-month in April to 1.3 million tonnes. Despite the monthly decline, exports remained firm, accounting for 80 per cent of Malaysia's palm oil production during the month.
In the global vegetable oil market, soybean oil prices in Europe surged to their highest level since November 2022 in mid-May, making it the most expensive major vegetable oil, supported by demand from the US biofuel sector. Soybean oil was trading at a premium of US$145 per tonne over rapeseed oil, US$110 per tonne over palm oil and US$45 per tonne above sunflower oil, making it the most expensive major vegetable oil globally. NST
Indonesia to bring commodity exports under centralised control
Summary
- Centralised export plan includes transition period, state oversight
- Policy aims to curb under-invoicing, minister says
- Exporters must keep foreign earnings in state banks from June 1, minister says
- Prabowo says Indonesia lost $908 billion over 34 years due to cheap commodity sales
- Sovereign wealth fund Danantara to oversee exports from Indonesia
Prabowo said in a fiery speech to parliament that Indonesia had lost as much as $908 billion in revenues in the last 34 years because its commodities were being sold on the cheap, adding that key exports like palm oil, coal and ferroalloy would be sold via a central government-run enterprise.
Indonesia, a global commodities powerhouse, is the world's largest exporter of thermal coal and palm oil.
"Today the Indonesian government that I lead will issue a regulation on management of commodity exports," Prabowo said.
"The issuance of this regulation is a strategic step to strengthen management of commodity exports," he said.
"All sales of our resources, from palm oil, coal must be through a (state-operated enterprise) selected by the government ... as sole exporters," he added.
Prabowo's remarks confirm earlier accounts from two sources familiar with the matter, who said Indonesia was planning the move as part of a drive to strengthen government oversight over its natural resources.
TRANSITION PERIOD
Expanding on Prabowo's announcement, Senior Economic Minister Airlangga Hartarto said in the first stage the commodities affected will be coal, palm oil and ferroalloy, and every three months the government will evaluate which commodities can be added to the plan.
He added that there will be a three-month transition period in which exporters and buyers can continue to do business as usual, but the government-appointed entity would monitor export transactions.
The chief of sovereign wealth fund Danantara Indonesia, Rosan Roeslani, speaking alongside Airlangga, said that this period could be extended to the end of the year.
At the end of the transition period, all exports will have to be done through the state-appointed firm, which will be overseen by Danantara, he said.
In addition, as part of another regulation, starting June 1 all exporters of natural resources from Indonesia must store 100% of their export earnings in Indonesian state-owned banks, Airlangga said. Reuters
--------
Indonesian Palm Oil Exporters Must Report to Danantara’s Arm Next Month
Jakarta. Indonesia’s palm oil firms will have to report to a new state-run export agency starting in June, as the resource-rich country wages war against under-invoicing.
President Prabowo Subianto wants to impose greater state control over Indonesia's "strategic" commodity exports. The move came after Indonesia lost around $908 billion from 34 years of rampant export under-invoicing. To this end, the sovereign wealth fund Danantara has set up a new "marketing arm" aimed at stepping up export governance.
Palm oil will be subject to this new system as the commodity makes up roughly 8% of Indonesia’s total exports. The same goes for coal and ferroalloy.
The fund’s boss Rosan Roeslani said that the body -- known as Danantara Sumberdaya Indonesia -- would start by making sure that exporters are being truthful in their reports.
“The body will comprehensively check whether the figure mentioned in their [trade documents] aligns with the global market index,” Rosan told the press in Jakarta on Tuesday.Panduan Kota & Daerah
"This is about [improving] the transactions' transparency."
Jakarta will gradually introduce the scheme next month before the system fully goes live in September. During the three-month transition period, companies will handle their transactions with the foreign buyers, while handing over the documentation and paperwork to the new agency.
“Starting in September, Danantara Sumberdaya Indonesia will be in charge of all transaction processes, contracts, shipments, and payments,” senior minister Airlangga Hartarto said.
Indonesia is the world’s largest palm oil supplier. This commodity -- found in half supermarket goods -- has also contributed $23 billion in export earnings throughout 2025.
In a fiery fiscal policy speech, Prabowo slammed the “under-invoicing” as fraud.
“Many exporters deliberately report much lower export values than the actual transaction value through overseas shell companies they themselves control,” Prabowo said in a room full of the country's lawmakers and senior officials earlier that day. Jakarta Globe
--------
Indonesia firms in palm oil fraud probe supplied fuel majors
Indonesian companies targeted in a palm oil fraud probe supplied European firms including Italian energy giant Eni and Finnish sustainable aviation fuel leader Neste, an investigation by AFP and SourceMaterial has found.
The links raise fresh questions about supply chains in the biofuel sector, experts said, and follow persistent allegations of fraud involving palm oil products used as fuel feedstocks.
There is no suggestion that Eni, Neste or other companies supplied by Indonesian firms implicated in the probe had knowledge of or involvement in fraud.
The Indonesian probe alleges local companies and government officials conspired to pass off palm oil as a waste byproduct called palm oil mill effluent (POME), including by offering bribes.
For the Indonesian government, this is a financial issue -- the higher tax on palm oil means labelling the product as POME allegedly defrauded authorities of millions of dollars in revenue.
For customers, the allegations threaten sustainability pledges. Palm oil has long been associated with deforestation, and both Eni and Neste have officially removed it from their supply chains.
The European Union will ban its use in biofuel from 2030.
Both Eni and Neste received multiple shipments described as POME from Indonesian companies accused of mislabelling palm oil as the waste byproduct.
Experts and campaigners said the alleged fraud illustrated the sector's oversight problems.
"The EU rightly decided to phase out palm oil biofuels in 2019 because of its links to deforestation," said Cian Delaney, biofuels campaigner at environmental NGO Transport and Environment (T&E).
"But disguising palm oil as waste products like POME... has been far too easy for suppliers and traders. Verification and certification of these imports is clearly failing," Delaney said.
Persistent fraud claimsEni said it had no direct contracts with accused companies and received shipments through an accredited supplier who "immediately suspended all operations with the companies involved in the investigation".
The supplier, Enviq, did not respond to requests for comment.
Neste also said it had instructed its supplier to exclude implicated companies from its supply chain after the Indonesian investigation was announced.
It said all deliveries linked to suppliers implicated in the Indonesian investigation had previously been sampled by independent surveyors who confirmed they "met the specifications for palm-derived waste feedstock."
Indonesia has long suspected POME fraud and last year temporarily limited exports after trade data recorded volumes far exceeding estimated available supply.
Then last month, Indonesian authorities arrested 11 people, including customs officials, accused of defrauding the government between 2022 and 2024 by labelling palm oil as POME.
The attorney general's office (AGO) gave only the initials of those arrested and their firms.
AFP and SourceMaterial used trade data, including some supplied by T&E, shareholder agreements, and customs documents obtained through freedom of information requests to ascertain the identities of three of those arrested.
A source in the AGO confirmed the findings.
Among them is "TNY", a shareholder in Green Product International, and director of a company identified only as TEO.
This refers to Tony, who like many Indonesians uses a single name. Tony is director of Tanimas Edible Oil and a shareholder in Green Product International.
Green Product International was the source of multiple shipments of a product labelled as POME to Eni and Neste between 2023 and 2024.
There is no conclusive evidence as to what those shipments contained.
Green Product International did not respond to a request for comment.
AFP and SourceMaterial identified two other companies implicated in the probe, Surya Inti Primakarya, whose director, Van Ricardo, was arrested, and Bumi Mulia Makmur, whose director, Erwin, was arrested.
Both signed off on shipments to Eni between 2022 and 2024.
Calls and messages to both companies seeking comment were not answered.
All three men remain in custody, the AGO said.
'Independent scrutiny'Eni said the company that handled its shipments was certified by International Sustainability and Carbon Certification (ISCC), an EU-certified verifier of the bloc's palm oil product imports.
An ISCC spokesperson said Surya Inti Primakarya is "currently excluded from recertification" and Bumi Mulia Makmur was "previously excluded".
But Green Product International still holds a valid certificate, the ISCC's online registry shows. The spokesperson did not respond when asked whether that accreditation would be reexamined.
Other companies Green Product International supplied indirectly include Swiss trader Kolmar, which declined to provide an on-record statement, as well as Spanish oil major Repsol and American multinational Cargill, neither of which replied to requests for comment.
Allegations of fraud in the POME sector have circulated for years, given high demand for use as a sustainable fuel feedstock, and the higher taxes sometimes levied on palm oil.
Some analyses have suggested the amount of POME being used in the EU and Britain exceeds available global supply, suggesting widespread mislabelling, though some industry groups have disputed those calcuations.
Ireland has ended incentives for POME's use in biofuels, and Germany will follow suit next year.
James Cogan, head of public policy at ClonBio, an Irish biofuel maker that only sources from the EU, said verification is so problematic that buyers and regulators should be suspicious of any shipment marked as POME.
"I would challenge any POME or POME-based biofuels processor to publish their volumes, sources and paperwork, to allow public and independent scrutiny," he said. AFP
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Indonesian markets slump on commodity export control speculation
(May 19): Indonesian markets fell on Tuesday as speculation mounted that the government will centralise commodity exports to control capital flows and shore up a plunging currency. Palm oil futures rose.
The benchmark Jakarta Composite Index fell 3.5% on Tuesday — taking its year-to-date loss to more than 26% as the world’s worst equity performer — with energy and basic material stocks leading the decline. The currency slid 0.3% against the dollar to another record low, while palm oil futures in Malaysia reversed earlier losses to climb as much as 2.2%.
Traders attributed the slump to speculation about the formation of a special agency for strategic commodity exports including coal, crude palm oil and minerals. Such an organisation would raise concerns about greater state control over a critical industry but also potentially help bolster government finances amid a widening fiscal deficit.
The concerns are amplified by the outsized role of commodities in Indonesia’s economy. The country is a major exporter as well as the world’s largest palm oil producer, so any changes to export flows can impact currency stability as well as foreign-exchange reserves.
“The market is reacting negatively because investors are worried this could add another layer of state control and policy uncertainty for commodity exporters,” said Mohit Mirpuri, a partner at SGMC Capital Pte Ltd. “In my view, the broader direction is clear: the government is doing everything it can to defend the rupiah and keep export proceeds onshore.”
Representatives of sovereign wealth fund Danantara Indonesia, the Trade Ministry and the Finance Ministry did not immediately respond to requests for comments.
The stock decline underscores mounting pressure on Indonesian authorities to stabilise markets amid high oil prices risks, with the rupiah weakening by nearly 6% this year. Investor sentiment has also been rattled by an upcoming MSCI Inc decision on a potential downgrade to frontier markets following the recent removal of several large companies from its indices.
Fitch Ratings and Moody’s Ratings have also cut their credit rating outlooks on worries about fiscal risks and policy uncertainty.
Pruksa Iamthongthong, the head of Asia-Pacific equities at Aberdeen Investments, told Bloomberg TV earlier that rising risks warrant a cautious approach to local stocks despite cheap valuations.
“We have the currency pressure on Indonesia as we speak. We have also lower confidence within the economy as well, and I think the government is also going to manage through the current account deficit situation as well,” she said. “So, there are quite a few headwinds.” The Edge
---------
US biofuel policies boost palm oil competitiveness, support CPO price stability
KUALA LUMPUR: Policy developments in the US biofuel sector, particularly measures aimed at increasing demand for biofuel feedstocks such as soybean oil, have enhanced palm oil's price competitiveness in key export markets and continued to support global demand.
Stronger demand for soybean oil in the United States, driven by expanding biodiesel and renewable fuel requirements, has contributed to firmer soybean oil prices, indirectly improving palm oil's attractiveness among global buyers.
According to the Malaysian Palm Oil Board (MPOB), palm oil continues to be the most competitively priced vegetable oil in India, while Malaysian palm olein is trading at a slight discount to Argentine soybean oil, a pricing advantage expected to sustain demand for palm oil in the near term.
In the first quarter of 2026, combined palm oil exports from Malaysia, Indonesia and Thailand increased by 1.9 million tonnes.
However, the board expects the momentum to weaken between April and September, with industry analyst Oil World forecasting combined exports from the three producing countries to decline by two million tonnes in the second and third quarters, mainly due to lower shipments from Indonesia.
Malaysia's palm oil exports are projected to rise by 400,000 tonnes during the period, while Indonesia's exports are expected to fall by 1.7 million tonnes as more supply is diverted for domestic energy consumption.
As a result, MPOB said a significant build-up in palm oil inventories is unlikely during Southeast Asia's upcoming peak production season.
The board also maintained that vegetable oil prices still have room to trend higher, arguing that the recent correction was likely driven by funds and speculators taking profits.
"Supply risks also remain due to unresolved geopolitical tensions and rising El Niño risk, which could add uncertainty to global vegetable oil supply in the upcoming season," MPOB said.
The board noted that El Niño conditions typically bring drier-than-normal weather to Southeast Asia, reducing rainfall and soil moisture levels, which could potentially disrupt agricultural output across the region.
The Malaysian Meteorological Department expects El Niño conditions to emerge between June and July and potentially persist into early 2027.
Meanwhile, MPOB expects crude palm oil prices to remain stable at around RM4,400 per tonne in June, as global biofuel policies continue to strengthen demand for vegetable oils.
It said that Malaysia's palm oil inventories edged up marginally to 2.31 million tonnes in April, driven by a seasonal increase in output.
Palm oil production typically rises between March and October as drier weather conditions improve harvesting productivity and boost oil extraction rates from fresh fruit bunches.
Malaysia's cumulative palm oil exports climbed 25.5 per cent, or 1.1 million tonnes, to 5.38 million tonnes in the first four months of 2026, the highest level recorded since 2019. However, exports fell 14.3 per cent month-on-month in April to 1.3 million tonnes. Despite the monthly decline, exports remained firm, accounting for 80 per cent of Malaysia's palm oil production during the month.
In the global vegetable oil market, soybean oil prices in Europe surged to their highest level since November 2022 in mid-May, making it the most expensive major vegetable oil, supported by demand from the US biofuel sector. Soybean oil was trading at a premium of US$145 per tonne over rapeseed oil, US$110 per tonne over palm oil and US$45 per tonne above sunflower oil, making it the most expensive major vegetable oil globally. NST
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May 19,2026
Palm oil is turning into fuel—and India’s import bill could rise
Summary
Indonesia and Malaysia’s expanding biodiesel mandates are diverting palm oil away from global markets, tightening supplies and raising risks for India’s food inflation and import dependence.
Even as India grapples with oil and gas supply concerns arising from the West Asia war, another pressure point may be emerging in edible oils.
Indonesia and Malaysia, the world’s largest palm oil exporters, are increasingly diverting supplies to biodiesel blending programmes to reduce dependence on fossil fuels. This has implications for India, where domestic edible oil production is insufficient to meet demand, and palm oil accounts for the largest share of imports due to its lower cost. Any tightening of global supplies could add to food inflationary pressures and widen import vulnerability. Livemint
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The European Commission adds and removes certain “downstream products” from the scope of the EU’s Deforestation-Free Products Regulation (EUDR) Lexology
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Palm Oil Giant Musim Mas Named Corporate Suspect in Environmental Damage Case
Pekanbaru. The Indonesian police have named palm oil company Musim Mas a corporate suspect in an environmental damage investigation involving river areas in Pelalawan Regency, Riau province, authorities said on Monday.
Police also accused the company of violating land-use permits by allegedly planting oil palm trees in protected forest areas without authorization.
Chief Commissioner Ade Kuncoro, director of special crimes at the Riau Police, said a 29,000-hectare plantation managed by Musim Mas overlaps with forest zones.
According to Ade, investigators spent four months examining the case with assistance from multiple experts.
“Our investigation found overlapping coordinates within Musim Mas’ land-use concession area. At the location, we found dead oil palm plantations along river flows. Visually, the plantations did not comply with the minimum six-meter buffer distance from the river,” Ade said during a press conference in Pekanbaru.
Authorities believe the plantation development contributed to recent landslides in the area.
“It can be concluded that environmental and soil damage has occurred. Musim Mas also benefited economically from the plantation activities from 2002 until 2024,” Ade said.
Based on expert calculations, the alleged ecological damage caused by the company’s activities is estimated at Rp 187.86 billion ($10.6 million).
“This ecological damage resulted from oil palm cultivation along river areas within the Musim Mas plantation zone,” he added.
Ade said investigators had questioned 13 witnesses and consulted eight experts from various fields during the investigation.
Musim Mas is being investigated under Indonesia’s 2009 Environmental Protection Law and the Criminal Code, which carry penalties of up to 10 years in prison and fines of up to Rp 10 billion.Indonesia business directory
The case adds to growing scrutiny of Indonesia’s palm oil industry over environmental management, land-use practices, and deforestation concerns in ecologically sensitive regions. Jakarta Globe
Palm oil is turning into fuel—and India’s import bill could rise
Summary
Indonesia and Malaysia’s expanding biodiesel mandates are diverting palm oil away from global markets, tightening supplies and raising risks for India’s food inflation and import dependence.
Even as India grapples with oil and gas supply concerns arising from the West Asia war, another pressure point may be emerging in edible oils.
Indonesia and Malaysia, the world’s largest palm oil exporters, are increasingly diverting supplies to biodiesel blending programmes to reduce dependence on fossil fuels. This has implications for India, where domestic edible oil production is insufficient to meet demand, and palm oil accounts for the largest share of imports due to its lower cost. Any tightening of global supplies could add to food inflationary pressures and widen import vulnerability. Livemint
--------
The European Commission adds and removes certain “downstream products” from the scope of the EU’s Deforestation-Free Products Regulation (EUDR) Lexology
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Palm Oil Giant Musim Mas Named Corporate Suspect in Environmental Damage Case
Pekanbaru. The Indonesian police have named palm oil company Musim Mas a corporate suspect in an environmental damage investigation involving river areas in Pelalawan Regency, Riau province, authorities said on Monday.
Police also accused the company of violating land-use permits by allegedly planting oil palm trees in protected forest areas without authorization.
Chief Commissioner Ade Kuncoro, director of special crimes at the Riau Police, said a 29,000-hectare plantation managed by Musim Mas overlaps with forest zones.
According to Ade, investigators spent four months examining the case with assistance from multiple experts.
“Our investigation found overlapping coordinates within Musim Mas’ land-use concession area. At the location, we found dead oil palm plantations along river flows. Visually, the plantations did not comply with the minimum six-meter buffer distance from the river,” Ade said during a press conference in Pekanbaru.
Authorities believe the plantation development contributed to recent landslides in the area.
“It can be concluded that environmental and soil damage has occurred. Musim Mas also benefited economically from the plantation activities from 2002 until 2024,” Ade said.
Based on expert calculations, the alleged ecological damage caused by the company’s activities is estimated at Rp 187.86 billion ($10.6 million).
“This ecological damage resulted from oil palm cultivation along river areas within the Musim Mas plantation zone,” he added.
Ade said investigators had questioned 13 witnesses and consulted eight experts from various fields during the investigation.
Musim Mas is being investigated under Indonesia’s 2009 Environmental Protection Law and the Criminal Code, which carry penalties of up to 10 years in prison and fines of up to Rp 10 billion.Indonesia business directory
The case adds to growing scrutiny of Indonesia’s palm oil industry over environmental management, land-use practices, and deforestation concerns in ecologically sensitive regions. Jakarta Globe
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May 18, 2026
Palm oil plays key role in India’s food security: Experts
Officials from the Food Safety and Standards Authority of India (FSSAI) said the organisation does not support or oppose any food ingredient without credible scientific proof.
Experts at a recent conference on edible oils said palm oil should not be criticised without proper scientific evidence, highlighting its importance in India’s food and edible oil sector.
The event was organised by PHD Chamber of Commerce and Industry and the AYUSH Committee in New Delhi. Officials from the Food Safety and Standards Authority of India (FSSAI) said the organisation does not support or oppose any food ingredient without credible scientific proof.
They stressed the need for balanced and evidence-based discussions around food and nutrition. Dr. Alka Rao, Advisor at FSSAI, said palm oil continues to be widely used in Indian homes and the food industry because of its stability and suitability for high-temperature cooking. She added that FSSAI remains open to hearing scientific data and expert opinions from all stakeholders.
The conference saw participation from over 90 delegates from industries, hospitals, and academic institutions. Discussions focused on palm oil science, food labelling, and the role of saturated and trans fats.
Experts at the event pointed out that palm oil plays a major role in ensuring food affordability and edible oil security in India. Dr. Shri Rishi Kant from the Ministry of Agriculture and Farmers Welfare said the government is focusing on expanding domestic palm oil cultivation through initiatives like the National Mission on Edible Oils.
India aims to increase its oil palm cultivation area from 6.5 lakh hectares to nearly 10 lakh hectares by 2025-26. Dr Vivek Srivastav of PHDCCI said palm oil is often misunderstood because of selective information shared online and on social media. He added that when consumed in moderation, palm oil offers a balanced fatty acid profile and contains beneficial antioxidants.
Dr Narendra Tripathi from PHDCCI said palm oil remains the most consumed vegetable oil in the world due to its affordability, efficiency, and versatility. According to him, it continues to play an important role in meeting the edible oil needs of millions of Indian households. DT Next
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Fuel crisis sparks fear of hike in essential commodity prices in Odisha
Long queues at filling stations and reports of pumps running dry have added to fears of a supply chain disruption in the coming days.
BHUBANESWAR: The fuel price hike coupled with the acute shortage of petrol and diesel across the state has triggered concerns over a possible rise in prices of essential commodities, including vegetables and grocery items, which are largely sourced from outside the state.
Though retail prices in open markets have remained largely stable so far, fuel disruption has created panic among transporters, traders and consumers alike. Long queues at filling stations and reports of pumps running dry have added to fears of a supply chain disruption in the coming days.
Odisha Byabasayee Mahasangha general secretary Sudhakar Panda said the state currently has adequate stock of essential commodities for nearly three weeks but warned that the prevailing fuel crisis could soon have a ripple effect on the market.
“When transportation, logistics and production costs rise, the burden is eventually passed down the supply chain. This directly impacts the prices of groceries, vegetables and daily household commodities,” Panda said.
Odisha remains heavily dependent on other states for procurement of vegetables, pulses, edible oils and several fast-moving consumer goods. Any disruption in diesel availability could affect transportation of perishable items into the state, leading to higher wholesale and retail prices.
Trade bodies said transport operators have already started demanding higher freight charges in view of the rising fuel cost. The additional burden will certainly be transferred to consumers if the situation persists.
Panda criticised the state government’s claim of adequate fuel availability, alleging that the ground reality reflected severe scarcity at a majority of petrol pumps across Odisha. “If the government normalises the transport system immediately, the situation can still be controlled,” he said.
The uncertainty in edible oil supply has further deepened market concerns. Traders pointed out that Odisha like other states heavily depends on palm oil and other edible oils from outside India. With tensions escalating in West Asia, fears of volatility in global supply and freight costs have resurfaced.
The traders’ federation has also urged the Centre to direct edible oil importers to disclose landing costs to ensure price transparency. However, importers are yet to make such details public, raising apprehensions of hidden costs and speculative pricing in the market.
Market observers warned that if the fuel shortage continues for a prolonged period, Odisha could witness a gradual increase in prices of vegetables, edible oils and other essential commodities in the weeks ahead.
5,300 chickens die from heat in poultry farm in Odisha after power failure during heatwave
Dead birds weigh around 12.5 tonnes; financial loss of the farm pegged at nearly Rs 15 lakh
According to poultry farm owner Manoj Kumar Padhi, electricity supply to his poultry unit was disrupted after the transformer developed a technical fault. Although the farm had a DG backup system, Padhi alleged that he could not procure diesel despite repeated attempts over the past three days.
The farm owner claimed he tried to arrange 30 litres of diesel to run the generator but failed due to the prevailing fuel shortage in the district. He further alleged that fuel stations refused to provide diesel in containers or barrels required for operating the DG set.
“I ran from one filling station to another searching for just a few litres of diesel, but had to return empty-handed. Without electricity, the environment-controlled sheds turned extremely hot. New Indian Express
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From Teacher to N170m Palm Oil Entrepreneur: Safiyat Bello Shares Her Inspiring Story Read more: https://www.legit.ng/business-economy/industry/1710444-from-teacher-n170m-palm-oil-entrepreneur-safiyat-bello-shares-inspiring-rise/
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Takeover of former logging roads expected to boost Sarawak’s rural economy
MIRI (May 17): The Sarawak government’s decision to take over more than 7,000 kilometres (km) of former logging roads statewide, including those in Baram, is expected to boost the rural economy, particularly among communities dependent on agriculture and oil palm cultivation.
Telang Usan assemblyman Datuk Dennis Ngau said nearly 2,700km of the former logging roads earmarked for takeover are located in Baram, including Telang Usan, where oil palm planting is a key livelihood for many residents.
He noted that poor road conditions in Baram, including Telang Usan, have long posed challenges for interior communities, especially in transporting agricultural produce as well as fresh fruit bunches (FFB).
“This indirectly affects their income as the cost of transporting FFB from their farms is high,” he said after officiating the ‘Aram Besawit’ programme themed ‘Palm Oil Is My Life’ at the SJK (C) Kee Tee hall in Long Lama on Saturday.
Dennis said once the former logging roads are taken over by the state government, maintenance and repair works would be easier to carry out using allocations under the Malaysian Road Records Information System (Marris).
On the programme, he said it was the third time the Sarawak Dayak Oil Palm Planters Association (Doppa) had organised the initiative in his constituency.
He added that the programme not only encourages more rural residents to venture into oil palm cultivation, but also serves as a platform for the public to learn about available assistance and related programmes.
“In fact, Malaysian Palm Oil Berhad (MPOB) offers several forms of assistance to small oil palm holders. However, one of the main requirements is that the land must have a title.
“In Sarawak, particularly in Baram, most land falls under Native Customary Rights (NCR), which makes it difficult for smallholders to meet this requirement,” he said.
As such, Dennis urged the government and relevant agencies to look into the matter and explore ways to assist oil palm smallholders in Sarawak, especially in Baram, to enable them to access the available assistance.
More than 350 people attended the programme. Also present was Doppa president Dr Napolean R Ningkos. Borneo Post
Palm oil plays key role in India’s food security: Experts
Officials from the Food Safety and Standards Authority of India (FSSAI) said the organisation does not support or oppose any food ingredient without credible scientific proof.
Experts at a recent conference on edible oils said palm oil should not be criticised without proper scientific evidence, highlighting its importance in India’s food and edible oil sector.
The event was organised by PHD Chamber of Commerce and Industry and the AYUSH Committee in New Delhi. Officials from the Food Safety and Standards Authority of India (FSSAI) said the organisation does not support or oppose any food ingredient without credible scientific proof.
They stressed the need for balanced and evidence-based discussions around food and nutrition. Dr. Alka Rao, Advisor at FSSAI, said palm oil continues to be widely used in Indian homes and the food industry because of its stability and suitability for high-temperature cooking. She added that FSSAI remains open to hearing scientific data and expert opinions from all stakeholders.
The conference saw participation from over 90 delegates from industries, hospitals, and academic institutions. Discussions focused on palm oil science, food labelling, and the role of saturated and trans fats.
Experts at the event pointed out that palm oil plays a major role in ensuring food affordability and edible oil security in India. Dr. Shri Rishi Kant from the Ministry of Agriculture and Farmers Welfare said the government is focusing on expanding domestic palm oil cultivation through initiatives like the National Mission on Edible Oils.
India aims to increase its oil palm cultivation area from 6.5 lakh hectares to nearly 10 lakh hectares by 2025-26. Dr Vivek Srivastav of PHDCCI said palm oil is often misunderstood because of selective information shared online and on social media. He added that when consumed in moderation, palm oil offers a balanced fatty acid profile and contains beneficial antioxidants.
Dr Narendra Tripathi from PHDCCI said palm oil remains the most consumed vegetable oil in the world due to its affordability, efficiency, and versatility. According to him, it continues to play an important role in meeting the edible oil needs of millions of Indian households. DT Next
---------
Fuel crisis sparks fear of hike in essential commodity prices in Odisha
Long queues at filling stations and reports of pumps running dry have added to fears of a supply chain disruption in the coming days.
BHUBANESWAR: The fuel price hike coupled with the acute shortage of petrol and diesel across the state has triggered concerns over a possible rise in prices of essential commodities, including vegetables and grocery items, which are largely sourced from outside the state.
Though retail prices in open markets have remained largely stable so far, fuel disruption has created panic among transporters, traders and consumers alike. Long queues at filling stations and reports of pumps running dry have added to fears of a supply chain disruption in the coming days.
Odisha Byabasayee Mahasangha general secretary Sudhakar Panda said the state currently has adequate stock of essential commodities for nearly three weeks but warned that the prevailing fuel crisis could soon have a ripple effect on the market.
“When transportation, logistics and production costs rise, the burden is eventually passed down the supply chain. This directly impacts the prices of groceries, vegetables and daily household commodities,” Panda said.
Odisha remains heavily dependent on other states for procurement of vegetables, pulses, edible oils and several fast-moving consumer goods. Any disruption in diesel availability could affect transportation of perishable items into the state, leading to higher wholesale and retail prices.
Trade bodies said transport operators have already started demanding higher freight charges in view of the rising fuel cost. The additional burden will certainly be transferred to consumers if the situation persists.
Panda criticised the state government’s claim of adequate fuel availability, alleging that the ground reality reflected severe scarcity at a majority of petrol pumps across Odisha. “If the government normalises the transport system immediately, the situation can still be controlled,” he said.
The uncertainty in edible oil supply has further deepened market concerns. Traders pointed out that Odisha like other states heavily depends on palm oil and other edible oils from outside India. With tensions escalating in West Asia, fears of volatility in global supply and freight costs have resurfaced.
The traders’ federation has also urged the Centre to direct edible oil importers to disclose landing costs to ensure price transparency. However, importers are yet to make such details public, raising apprehensions of hidden costs and speculative pricing in the market.
Market observers warned that if the fuel shortage continues for a prolonged period, Odisha could witness a gradual increase in prices of vegetables, edible oils and other essential commodities in the weeks ahead.
5,300 chickens die from heat in poultry farm in Odisha after power failure during heatwave
Dead birds weigh around 12.5 tonnes; financial loss of the farm pegged at nearly Rs 15 lakh
According to poultry farm owner Manoj Kumar Padhi, electricity supply to his poultry unit was disrupted after the transformer developed a technical fault. Although the farm had a DG backup system, Padhi alleged that he could not procure diesel despite repeated attempts over the past three days.
The farm owner claimed he tried to arrange 30 litres of diesel to run the generator but failed due to the prevailing fuel shortage in the district. He further alleged that fuel stations refused to provide diesel in containers or barrels required for operating the DG set.
“I ran from one filling station to another searching for just a few litres of diesel, but had to return empty-handed. Without electricity, the environment-controlled sheds turned extremely hot. New Indian Express
--------
From Teacher to N170m Palm Oil Entrepreneur: Safiyat Bello Shares Her Inspiring Story Read more: https://www.legit.ng/business-economy/industry/1710444-from-teacher-n170m-palm-oil-entrepreneur-safiyat-bello-shares-inspiring-rise/
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Takeover of former logging roads expected to boost Sarawak’s rural economy
MIRI (May 17): The Sarawak government’s decision to take over more than 7,000 kilometres (km) of former logging roads statewide, including those in Baram, is expected to boost the rural economy, particularly among communities dependent on agriculture and oil palm cultivation.
Telang Usan assemblyman Datuk Dennis Ngau said nearly 2,700km of the former logging roads earmarked for takeover are located in Baram, including Telang Usan, where oil palm planting is a key livelihood for many residents.
He noted that poor road conditions in Baram, including Telang Usan, have long posed challenges for interior communities, especially in transporting agricultural produce as well as fresh fruit bunches (FFB).
“This indirectly affects their income as the cost of transporting FFB from their farms is high,” he said after officiating the ‘Aram Besawit’ programme themed ‘Palm Oil Is My Life’ at the SJK (C) Kee Tee hall in Long Lama on Saturday.
Dennis said once the former logging roads are taken over by the state government, maintenance and repair works would be easier to carry out using allocations under the Malaysian Road Records Information System (Marris).
On the programme, he said it was the third time the Sarawak Dayak Oil Palm Planters Association (Doppa) had organised the initiative in his constituency.
He added that the programme not only encourages more rural residents to venture into oil palm cultivation, but also serves as a platform for the public to learn about available assistance and related programmes.
“In fact, Malaysian Palm Oil Berhad (MPOB) offers several forms of assistance to small oil palm holders. However, one of the main requirements is that the land must have a title.
“In Sarawak, particularly in Baram, most land falls under Native Customary Rights (NCR), which makes it difficult for smallholders to meet this requirement,” he said.
As such, Dennis urged the government and relevant agencies to look into the matter and explore ways to assist oil palm smallholders in Sarawak, especially in Baram, to enable them to access the available assistance.
More than 350 people attended the programme. Also present was Doppa president Dr Napolean R Ningkos. Borneo Post
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May 15, 2026
China’s consumer power is driving global green transformation
Multiple foreign media outlets have recently noticed that the Tianjin Meat Industry Association announced it would purchase 50,000 metric tons of deforestation free certified Brazilian beef by the end of the year. This move not only sends a positive signal for the protection of the Amazon rainforest, but also demonstrates the profound impact of China's green consumption demand on global supply chains.
This case reflects a broader shift: in the global wave of green and low-carbon transformation, China is moving from a production-driven green development model to a new stage driven by both production and consumption.
Chinese consumers' demand for green, safe and traceable products continues to rise. Supported by policy guidance, corporate responsibility and industry certification, this trend is reshaping the domestic market while deeply empowering the global green supply chain and injecting strong momentum into the world economy's green recovery and sustainable development.
For a long time, global green development has focused mainly on emission reductions and technological innovation on the production side, while the guiding role of consumption has often been overlooked. Now, the rise of green consumption in China is breaking this limitation and promoting a new pattern of "production-consumption" mutual reinforcement.
From Brazilian beef and South American soybeans to Southeast Asian palm oil and other global commodities, China's green procurement standards are becoming a new guiding force in international trade. In sectors such as soybeans and palm oil, China's demand for green, deforestation free and traceable products is pushing exporting countries to adjust their production models, reduce deforestation and improve resource efficiency.
This shift means that consumption is no longer merely the passive endpoint of production. It has become the starting point of green supply chains. It truly enables production and consumption to act as two mutually reinforcing wheels driving global green development, fully embodying the core essence of accelerating the comprehensive green transformation of economic and social development.
The vigorous rise of green consumption in China results from the synergy between policy guidance and market-driven demand. On the policy front, China continues to improve its green development institutional framework. On the market front, Chinese consumers' mindset has undergone a fundamental change - shifting from "price-first" to prioritizing "green, safe and traceable" values. This is not a short-term trend but a profound transformation in consumption concepts and lifestyles, becoming a core market force driving the upgrade of global green supply chains.
The rise of green consumption in China not only injects green momentum into the country's high-quality economic development, but has also become a vital engine for addressing global economic imbalances and driving a new round of green growth worldwide.
For China, green consumption is acting as a powerful force to push industrial green transformation. It encourages enterprises to increase investment in green technology research and development, optimize production processes, and improve traceability systems. From the rapid expansion of emerging industries such as new energy and energy-saving environmental protection, to the accelerated green upgrading of traditional industries, green consumption has helped foster a green industry sector with a market scale reaching trillions of yuan. This provides key support for optimizing the economic structure and cultivating new quality productive forces.
For the world, as the world's second-largest economy and one of the largest import markets, China's growing green consumption offers vast opportunities for green products from all countries. Resource-exporting countries like Brazil and Southeast Asia are actively reducing deforestation and adopting sustainable practices to meet Chinese standards, achieving a win-win for ecological protection and economic growth. At the same time, green technologies and eco-friendly products from developed countries gain broader application. More importantly, the sustainable philosophy promoted by China's green consumption is reshaping global trade rules and helping establish green standards and traceability systems as international norms.
From policy guidance to market awakening, and from corporate practice to industry standards, China's green consumption is forming a multi-dimensional collaborative ecosystem. This not only ensures steady progress in China's own green development but also leverages Chinese consumer power to drive global green transformation.
The author is director and professor of the Research Center for Environmental Economics, Fudan University. globaltimes.com.cn
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Malaysia strengthens palm oil ties with China
KUCHING (May 15): Malaysia has strengthened cooperation with China’s palm oil industry through a series of strategic engagements led by Minister of Plantation and Commodities Datuk Seri Dr Noraini Ahmad during a four day working visit to Shanghai.
The programme, coordinated by the Malaysian Palm Oil Council (MPOC), included the MPOF China 2026 forum and meetings with major industry players including COFCO Corporation, Yihai Kerry Arawana Food Group under Wilmar China, and Taiko Palm-Oleo (Zhangjiagang) Co Ltd.
Speaking during the engagements, Noraini said China remained an important market and manufacturing hub for the global oils and fats industry.
“Malaysia sees strong opportunities to further strengthen collaboration with Chinese industry players across downstream processing, specialty applications, and sustainable supply chain development,” she said.
She added that closer cooperation between Malaysian suppliers and Chinese manufacturers would support innovation and create growth opportunities for palm-based products in high growth sectors.
Discussions with COFCO Corporation focused on long term supply cooperation, downstream applications, market developments and sustainability collaboration involving Malaysia’s palm oil exports to China’s food manufacturing sector.
The minister also attended a briefing at the Yihai Kerry Research and Development Center in Shanghai, where discussions centred on specialty fats, food innovation and evolving consumer demand in China.
Noraini said the expansion of specialty fats and food innovation in China presented opportunities for stronger collaboration between Malaysian palm oil suppliers and Chinese manufacturers, particularly in innovation driven segments.
At Taiko Palm-Oleo (Zhangjiagang) Co Ltd, discussions focused on demand growth for palm based oleochemicals used in personal care, pharmaceuticals, food manufacturing and industrial applications, as well as sustainability and traceability requirements within supply chains.
“The continued growth of downstream oleochemical manufacturing in China reflects expanding opportunities for Malaysia to strengthen its presence in industrial and higher value downstream sectors,” Noraini said.
MPOC said the programme reflected Malaysia’s continued efforts to strengthen long term partnerships with China and expand collaboration across innovation driven sectors. Borneo Post
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Iran war energy shock drives interest in ethanol and other biofuels across hard-hit Asia
Nations across Asia are pushing for the use of more biofuels in transportation in order to slash dependence on imported fossil fuels, which have been disrupted by the Iran war
BENGALURU, India — Taxi driver Ravi Ranjan, who lives with his wife and child in New Delhi, said shipping disruptions caused by the Iran war have forced him to pay higher prices for cooking fuel at a time when India’s prime minister is also urging residents to reduce driving and travel.
It’s all hitting Ranjan’s bottom line, he said, as he’s paying three times as much for liquid petroleum gas after facing delays on delivery of the cooking fuel.
“I used to get a cylinder of LPG for 1,000 rupees ($11), now I pay 3,000 rupees ($31) in the black market,” he said.
On the other side of the country, in the coastal city of Chennai, Sushmita Sankar, an advertising executive, said her gasoline and cooking fuel expenses are skyrocketing because of the war. Sankar said gasoline blended with ethanol — the default mix available at fuel stations now — is also worsening her car’s mileage.
“Fuel expenses are increasing and with only ethanol mixed petrol available, I feel my car’s mileage has reduced in the last year or so,” she said. “Already our days are busy with work and taking care of our child’s school and other needs. Having to now spend a lot of time to fill my car or buy LPG is making things even more hectic.”
Against the backdrop of cooking gas shortages and crude oil price increases, India has proposed letting vehicles run on 85%, or even 100%, ethanol. On Friday, India increased its petrol and diesel prices and local news outlets reported panic buying leading to long queues in India’s Odisha state. India has also banned all exports of sugar at least through September to ensure a local supply of sugar, but also to ensure enough raw material is available if ethanol blending levels are to be increased.
The government claims more ethanol will reduce vehicle pollution, but drivers have concerns about mileage. Environmental experts also say that producing corn, rice and other grains for ethanol can take away from food and livestock needs. Washington Post
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Biofuel boom shatters longheld link between soy and palm oil
KUALA LUMPUR (May 15): Biofuel demand is running hot, pushing soybean oil to a historic premium over its closest crop rival, palm oil.
It’s a rare divergence between prices of the world’s two most-consumed vegetable oils, as aggressive US biofuel blending mandates transform soy oil from a food staple into a crucial feedstock for energy.
While the war in the Middle East has boosted palm’s appeal as a biofuel feedstock as well, the tropical oil has come under pressure in recent weeks following softer demand from top buyer India, as well seasonally-higher production in key growers Indonesia and Malaysia.
Chicago soy oil prices have rallied more than 50% this year. Benchmark palm oil futures in Kuala Lumpur, meanwhile, are only up around 10%.
Historically, trading between soy oil and palm oil has been largely aligned, with prices driven by food demand and substitution between the two rivals. A higher premium for soy oil would typically encourage buyers to switch to cheaper palm oil, which in turn would narrow the spread. That relationship is now disintegrating as a growing share of US soy oil becomes tied to fuel and demand grows.
Soy oil traded at a premium of US$507 (RM2,002.40) over palm on Friday, the widest since October 2023, according to data compiled by Bloomberg. That compares to just US$73 at the start of the year.
“Right now, you can’t compare between the two,” according to Budiman Suwardi, head of treasury and markets at Prime EcoHarvest Commodities. “Soy oil prices in the US are going to be supported by US renewable fuel mandates, which will need huge volumes of soy oil, while Malaysian palm futures are moving on the Asian biodiesel story and demand for cooking oil.” Bloomberg/ The Edge
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New Crop Soybeans Top $12 as USDA Raises Demand Outlook
USDA’s forecasts for both domestic and international soybean production and consumption for both the current 2025/26 and upcoming 2026/27 marketing year sent soy prices headed in one direction on Tuesday: higher.
USDA published its first look at 2026/27 marketing year production, supply and demand estimates in the May 2026 World Agricultural Supply and Demand Estimates (WASDE) report Tuesday, while also revising 2025/26 estimates. It was a bullish report for soybean prices, fueled primarily by growing domestic and global usage forecasts.
The new marketing year estimates were welcomed warmly by the markets, as new crop November 2026 soybean futures prices surged to a three-year high above the $12/bu. benchmark following the report’s release. The contract ended Tuesday’s trading session $0.09/bu. (0.8%) higher at $12.0375/bu., aided in large part by growing global consumption of vegetable oils.
Old crop futures prices for soybeans also saw a boost thanks to rising crush forecasts. July 2026 soybean futures prices climbed to a two-month high of $12.2675/bu. Following WASDE’s release, closing Tuesday’s trading session $0.1225/bu. (1%) higher.
A rally in the energy markets also lent strength to both old and new crop futures prices for the soy complex following WASDE’s publication. The energy market spillover strength from Persian Gulf tensions will likely play a key role in production dynamics for the soy industry in the months ahead.
USDA expects high crush volumes will continue to support soybean prices, projecting 2026/27 average farm prices at $11.40/bu. The same sentiment prompted USDA to also increase 2025/26 average farm prices by a dime from last month to $10.40/bu.
The higher prices will reduce market losses for growers in both the 2025/26 and 2026/27 marketing years but are not high enough to completely offset rapid increases in input costs. As a result, profit margins are likely in the red for soybean growers for another year.
Old crop revisions CRUSH it
USDA lowered 2025/26 U.S. export volumes by 10 million bushels, dropping the total to a 1.53 billion bushels. It is the smallest marketing year soybean export volume since the 2012/13 marketing year, which saw reduced shipments due to an historic drought.
USDA offset the lower export usage rate by adding 20 million bushels to 2025/26 U.S. soybean crush forecasts, bringing the current crush rate to 2.63 billion bushels. Across the Heartland, crush margins have hit multi-year year highs over the past month, with the Chicago board crush notching a new record high May 5. The rising margins and rapid consumption of soy products are the driver of the larger crush estimate.
2025/26 soybean oil production increased 345 million pounds to 30.675 billion pounds. The added supplies will increase consumption by biomass-based diesel by 200 million pounds, bringing the marketing year total to 14.2 billion pounds. Consumption of soybean oil for food, feed and other industrial uses rose 130 million pounds to 15.48 billion pounds.
While 2025/26 soybean oil ending stocks grew 15 million pounds, the rapid growth in usage more than offset the additional supplies. Rising consumption forecasts prompted USDA to raise 2025/26 season average soybean oil prices by $0.04/lb. to $0.63/lb.
Similarly, 2025/26 soymeal production was revised 750,000 short tons higher to 62.627 million short tons. The additional soymeal stocks are expected to be completely consumed by a 400,000-short-ton increase in soymeal exports and a 350,000-short-ton increase in domestic consumption, bringing those marketing year totals to 19.8 million and 43.575 million short tons, respectively.
With usage rates trending hotter for soymeal, in addition to soybean oil, USDA added $5/ton to season average soymeal prices, bringing the 2025/26 total to $315/ton.
Even as export volumes hover at 13-year lows, soybean prices are increasingly gaining strength from rising demand for soybean oil and soymeal end products. USDA expects demand for these co-products will be a central theme to new crop 2026/27 pricing dynamics.
New crop forecasts
Assuming March 31 Prospective Planting estimates of 84.7 million acres of soybeans for 2026 and a trendline yield of 53.0 bushels per acre (bpa), USDA forecasts 2026 U.S. soybean production at 4.435 billion bushels. If realized, it will be the second largest crop harvested by U.S. soybean producers, trailing only 2021’s record haul of 4.464 billion bushels.
But 2025/26 trend of rising domestic crush volumes and end product usage will continue into the new crop 2026/27 marketing year. A 120-million-bushel increase in crush volumes and 100 million added bushels to revived export demand will tighten 2026/27 ending stocks to 310 million bushels. Soy Growers
China’s consumer power is driving global green transformation
Multiple foreign media outlets have recently noticed that the Tianjin Meat Industry Association announced it would purchase 50,000 metric tons of deforestation free certified Brazilian beef by the end of the year. This move not only sends a positive signal for the protection of the Amazon rainforest, but also demonstrates the profound impact of China's green consumption demand on global supply chains.
This case reflects a broader shift: in the global wave of green and low-carbon transformation, China is moving from a production-driven green development model to a new stage driven by both production and consumption.
Chinese consumers' demand for green, safe and traceable products continues to rise. Supported by policy guidance, corporate responsibility and industry certification, this trend is reshaping the domestic market while deeply empowering the global green supply chain and injecting strong momentum into the world economy's green recovery and sustainable development.
For a long time, global green development has focused mainly on emission reductions and technological innovation on the production side, while the guiding role of consumption has often been overlooked. Now, the rise of green consumption in China is breaking this limitation and promoting a new pattern of "production-consumption" mutual reinforcement.
From Brazilian beef and South American soybeans to Southeast Asian palm oil and other global commodities, China's green procurement standards are becoming a new guiding force in international trade. In sectors such as soybeans and palm oil, China's demand for green, deforestation free and traceable products is pushing exporting countries to adjust their production models, reduce deforestation and improve resource efficiency.
This shift means that consumption is no longer merely the passive endpoint of production. It has become the starting point of green supply chains. It truly enables production and consumption to act as two mutually reinforcing wheels driving global green development, fully embodying the core essence of accelerating the comprehensive green transformation of economic and social development.
The vigorous rise of green consumption in China results from the synergy between policy guidance and market-driven demand. On the policy front, China continues to improve its green development institutional framework. On the market front, Chinese consumers' mindset has undergone a fundamental change - shifting from "price-first" to prioritizing "green, safe and traceable" values. This is not a short-term trend but a profound transformation in consumption concepts and lifestyles, becoming a core market force driving the upgrade of global green supply chains.
The rise of green consumption in China not only injects green momentum into the country's high-quality economic development, but has also become a vital engine for addressing global economic imbalances and driving a new round of green growth worldwide.
For China, green consumption is acting as a powerful force to push industrial green transformation. It encourages enterprises to increase investment in green technology research and development, optimize production processes, and improve traceability systems. From the rapid expansion of emerging industries such as new energy and energy-saving environmental protection, to the accelerated green upgrading of traditional industries, green consumption has helped foster a green industry sector with a market scale reaching trillions of yuan. This provides key support for optimizing the economic structure and cultivating new quality productive forces.
For the world, as the world's second-largest economy and one of the largest import markets, China's growing green consumption offers vast opportunities for green products from all countries. Resource-exporting countries like Brazil and Southeast Asia are actively reducing deforestation and adopting sustainable practices to meet Chinese standards, achieving a win-win for ecological protection and economic growth. At the same time, green technologies and eco-friendly products from developed countries gain broader application. More importantly, the sustainable philosophy promoted by China's green consumption is reshaping global trade rules and helping establish green standards and traceability systems as international norms.
From policy guidance to market awakening, and from corporate practice to industry standards, China's green consumption is forming a multi-dimensional collaborative ecosystem. This not only ensures steady progress in China's own green development but also leverages Chinese consumer power to drive global green transformation.
The author is director and professor of the Research Center for Environmental Economics, Fudan University. globaltimes.com.cn
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Malaysia strengthens palm oil ties with China
KUCHING (May 15): Malaysia has strengthened cooperation with China’s palm oil industry through a series of strategic engagements led by Minister of Plantation and Commodities Datuk Seri Dr Noraini Ahmad during a four day working visit to Shanghai.
The programme, coordinated by the Malaysian Palm Oil Council (MPOC), included the MPOF China 2026 forum and meetings with major industry players including COFCO Corporation, Yihai Kerry Arawana Food Group under Wilmar China, and Taiko Palm-Oleo (Zhangjiagang) Co Ltd.
Speaking during the engagements, Noraini said China remained an important market and manufacturing hub for the global oils and fats industry.
“Malaysia sees strong opportunities to further strengthen collaboration with Chinese industry players across downstream processing, specialty applications, and sustainable supply chain development,” she said.
She added that closer cooperation between Malaysian suppliers and Chinese manufacturers would support innovation and create growth opportunities for palm-based products in high growth sectors.
Discussions with COFCO Corporation focused on long term supply cooperation, downstream applications, market developments and sustainability collaboration involving Malaysia’s palm oil exports to China’s food manufacturing sector.
The minister also attended a briefing at the Yihai Kerry Research and Development Center in Shanghai, where discussions centred on specialty fats, food innovation and evolving consumer demand in China.
Noraini said the expansion of specialty fats and food innovation in China presented opportunities for stronger collaboration between Malaysian palm oil suppliers and Chinese manufacturers, particularly in innovation driven segments.
At Taiko Palm-Oleo (Zhangjiagang) Co Ltd, discussions focused on demand growth for palm based oleochemicals used in personal care, pharmaceuticals, food manufacturing and industrial applications, as well as sustainability and traceability requirements within supply chains.
“The continued growth of downstream oleochemical manufacturing in China reflects expanding opportunities for Malaysia to strengthen its presence in industrial and higher value downstream sectors,” Noraini said.
MPOC said the programme reflected Malaysia’s continued efforts to strengthen long term partnerships with China and expand collaboration across innovation driven sectors. Borneo Post
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Iran war energy shock drives interest in ethanol and other biofuels across hard-hit Asia
Nations across Asia are pushing for the use of more biofuels in transportation in order to slash dependence on imported fossil fuels, which have been disrupted by the Iran war
BENGALURU, India — Taxi driver Ravi Ranjan, who lives with his wife and child in New Delhi, said shipping disruptions caused by the Iran war have forced him to pay higher prices for cooking fuel at a time when India’s prime minister is also urging residents to reduce driving and travel.
It’s all hitting Ranjan’s bottom line, he said, as he’s paying three times as much for liquid petroleum gas after facing delays on delivery of the cooking fuel.
“I used to get a cylinder of LPG for 1,000 rupees ($11), now I pay 3,000 rupees ($31) in the black market,” he said.
On the other side of the country, in the coastal city of Chennai, Sushmita Sankar, an advertising executive, said her gasoline and cooking fuel expenses are skyrocketing because of the war. Sankar said gasoline blended with ethanol — the default mix available at fuel stations now — is also worsening her car’s mileage.
“Fuel expenses are increasing and with only ethanol mixed petrol available, I feel my car’s mileage has reduced in the last year or so,” she said. “Already our days are busy with work and taking care of our child’s school and other needs. Having to now spend a lot of time to fill my car or buy LPG is making things even more hectic.”
Against the backdrop of cooking gas shortages and crude oil price increases, India has proposed letting vehicles run on 85%, or even 100%, ethanol. On Friday, India increased its petrol and diesel prices and local news outlets reported panic buying leading to long queues in India’s Odisha state. India has also banned all exports of sugar at least through September to ensure a local supply of sugar, but also to ensure enough raw material is available if ethanol blending levels are to be increased.
The government claims more ethanol will reduce vehicle pollution, but drivers have concerns about mileage. Environmental experts also say that producing corn, rice and other grains for ethanol can take away from food and livestock needs. Washington Post
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Biofuel boom shatters longheld link between soy and palm oil
KUALA LUMPUR (May 15): Biofuel demand is running hot, pushing soybean oil to a historic premium over its closest crop rival, palm oil.
It’s a rare divergence between prices of the world’s two most-consumed vegetable oils, as aggressive US biofuel blending mandates transform soy oil from a food staple into a crucial feedstock for energy.
While the war in the Middle East has boosted palm’s appeal as a biofuel feedstock as well, the tropical oil has come under pressure in recent weeks following softer demand from top buyer India, as well seasonally-higher production in key growers Indonesia and Malaysia.
Chicago soy oil prices have rallied more than 50% this year. Benchmark palm oil futures in Kuala Lumpur, meanwhile, are only up around 10%.
Historically, trading between soy oil and palm oil has been largely aligned, with prices driven by food demand and substitution between the two rivals. A higher premium for soy oil would typically encourage buyers to switch to cheaper palm oil, which in turn would narrow the spread. That relationship is now disintegrating as a growing share of US soy oil becomes tied to fuel and demand grows.
Soy oil traded at a premium of US$507 (RM2,002.40) over palm on Friday, the widest since October 2023, according to data compiled by Bloomberg. That compares to just US$73 at the start of the year.
“Right now, you can’t compare between the two,” according to Budiman Suwardi, head of treasury and markets at Prime EcoHarvest Commodities. “Soy oil prices in the US are going to be supported by US renewable fuel mandates, which will need huge volumes of soy oil, while Malaysian palm futures are moving on the Asian biodiesel story and demand for cooking oil.” Bloomberg/ The Edge
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New Crop Soybeans Top $12 as USDA Raises Demand Outlook
USDA’s forecasts for both domestic and international soybean production and consumption for both the current 2025/26 and upcoming 2026/27 marketing year sent soy prices headed in one direction on Tuesday: higher.
USDA published its first look at 2026/27 marketing year production, supply and demand estimates in the May 2026 World Agricultural Supply and Demand Estimates (WASDE) report Tuesday, while also revising 2025/26 estimates. It was a bullish report for soybean prices, fueled primarily by growing domestic and global usage forecasts.
The new marketing year estimates were welcomed warmly by the markets, as new crop November 2026 soybean futures prices surged to a three-year high above the $12/bu. benchmark following the report’s release. The contract ended Tuesday’s trading session $0.09/bu. (0.8%) higher at $12.0375/bu., aided in large part by growing global consumption of vegetable oils.
Old crop futures prices for soybeans also saw a boost thanks to rising crush forecasts. July 2026 soybean futures prices climbed to a two-month high of $12.2675/bu. Following WASDE’s release, closing Tuesday’s trading session $0.1225/bu. (1%) higher.
A rally in the energy markets also lent strength to both old and new crop futures prices for the soy complex following WASDE’s publication. The energy market spillover strength from Persian Gulf tensions will likely play a key role in production dynamics for the soy industry in the months ahead.
USDA expects high crush volumes will continue to support soybean prices, projecting 2026/27 average farm prices at $11.40/bu. The same sentiment prompted USDA to also increase 2025/26 average farm prices by a dime from last month to $10.40/bu.
The higher prices will reduce market losses for growers in both the 2025/26 and 2026/27 marketing years but are not high enough to completely offset rapid increases in input costs. As a result, profit margins are likely in the red for soybean growers for another year.
Old crop revisions CRUSH it
USDA lowered 2025/26 U.S. export volumes by 10 million bushels, dropping the total to a 1.53 billion bushels. It is the smallest marketing year soybean export volume since the 2012/13 marketing year, which saw reduced shipments due to an historic drought.
USDA offset the lower export usage rate by adding 20 million bushels to 2025/26 U.S. soybean crush forecasts, bringing the current crush rate to 2.63 billion bushels. Across the Heartland, crush margins have hit multi-year year highs over the past month, with the Chicago board crush notching a new record high May 5. The rising margins and rapid consumption of soy products are the driver of the larger crush estimate.
2025/26 soybean oil production increased 345 million pounds to 30.675 billion pounds. The added supplies will increase consumption by biomass-based diesel by 200 million pounds, bringing the marketing year total to 14.2 billion pounds. Consumption of soybean oil for food, feed and other industrial uses rose 130 million pounds to 15.48 billion pounds.
While 2025/26 soybean oil ending stocks grew 15 million pounds, the rapid growth in usage more than offset the additional supplies. Rising consumption forecasts prompted USDA to raise 2025/26 season average soybean oil prices by $0.04/lb. to $0.63/lb.
Similarly, 2025/26 soymeal production was revised 750,000 short tons higher to 62.627 million short tons. The additional soymeal stocks are expected to be completely consumed by a 400,000-short-ton increase in soymeal exports and a 350,000-short-ton increase in domestic consumption, bringing those marketing year totals to 19.8 million and 43.575 million short tons, respectively.
With usage rates trending hotter for soymeal, in addition to soybean oil, USDA added $5/ton to season average soymeal prices, bringing the 2025/26 total to $315/ton.
Even as export volumes hover at 13-year lows, soybean prices are increasingly gaining strength from rising demand for soybean oil and soymeal end products. USDA expects demand for these co-products will be a central theme to new crop 2026/27 pricing dynamics.
New crop forecasts
Assuming March 31 Prospective Planting estimates of 84.7 million acres of soybeans for 2026 and a trendline yield of 53.0 bushels per acre (bpa), USDA forecasts 2026 U.S. soybean production at 4.435 billion bushels. If realized, it will be the second largest crop harvested by U.S. soybean producers, trailing only 2021’s record haul of 4.464 billion bushels.
But 2025/26 trend of rising domestic crush volumes and end product usage will continue into the new crop 2026/27 marketing year. A 120-million-bushel increase in crush volumes and 100 million added bushels to revived export demand will tighten 2026/27 ending stocks to 310 million bushels. Soy Growers
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May 14, 2026
India's vegetable oil imports jump 13 per cent in first half of 2025-26 on palm oil surge
New Delhi: India's vegetable oil imports rose 13 per cent to 7.94 million tonnes in the first six months of the 2025-26 oil year, driven by a sharp surge in palm oil shipments, industry body the Solvent Extractors Association of India (SEA) said on Wednesday.
The world's largest cooking oil consumer imported 7.04 million tonnes in the same period a year earlier. India's oil year runs from November to October.
In value terms, imports for the November-April period climbed 19 per cent to Rs 87,000 crore up from Rs 73,000 crore a year-ago.
Of the total imports, edible oils accounted for 7.82 million tonnes and non-edible oils for 121,000 tonnes, SEA said in a statement.
Palm oil imports nearly doubled to 3.97 million tonnes from 2.74 million tonnes a year earlier, while soft oil shipments, which include soybean and sunflower oils, fell to 3.85 million tonnes from 4.13 million tonnes.
Indonesia and Malaysia are the primary suppliers of palm oil to India. Argentina is the largest supplier of soybean oil, followed by Brazil, while Russia and Ukraine are the main sources of sunflower oil.
Cooking oil prices rose sharply over the past year, with palm oil prices up 14-15 per cent compared with April 2025 levels. Soybean oil and sunflower oil prices increased between 17 per cent and 22 per cent over the same period. Economic Times
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Indonesia Mulls Incentives for Palm Oil Investors
Jakarta. Indonesia is considering introducing incentives to draw capital into its palm oil sector as the country wants to move away from raw commodity export.Indonesian market analysis
In a recent conference with foreign ambassadors, Finance Minister Purbaya Yudhi Sadewa said that Indonesia had been doing its best to make the country investor-friendly. These "structural reforms" will possibly extend to the palm oil sector, some aimed at drawing capital into the production of higher-value products.
“In the future, we will probably provide some taxes on raw crude palm oil [CPO] export and incentives for the downstream palm oil products,” Purbaya told the forum in Jakarta on Tuesday.
“We invite companies from your area to invest in my country to produce [more sophisticated] products based on CPO.”
Investors have displayed quite an appetite for Indonesia’s palm oil sector. The government estimated that Indonesia had amassed around Rp 18.3 trillion (approximately $1 billion) in investments meant to help the country move up the palm oil value chain between January and March.
Indonesia did not say whether the money had come from domestic or foreign sources. Palm oil is in nearly everything, with this vegetable oil found in close to half of the packaged goods in supermarkets.
Indonesia has been banking on the so-called “debottlenecking task force” to address the problems that might come the investors’ way. Within six months of its establishment, the team claimed to have resolved problems that had hindered up to $30 billion worth of investments. Indonesian market analysis
Indonesia’s exports of CPO and its derivatives totaled $6.11 billion in Q1 2026, government data showed. The country is known to be the world’s largest palm oil supplier. Jakarta Globe
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India's vegetable oil imports jump 13 per cent in first half of 2025-26 on palm oil surge
New Delhi: India's vegetable oil imports rose 13 per cent to 7.94 million tonnes in the first six months of the 2025-26 oil year, driven by a sharp surge in palm oil shipments, industry body the Solvent Extractors Association of India (SEA) said on Wednesday.
The world's largest cooking oil consumer imported 7.04 million tonnes in the same period a year earlier. India's oil year runs from November to October.
In value terms, imports for the November-April period climbed 19 per cent to Rs 87,000 crore up from Rs 73,000 crore a year-ago.
Of the total imports, edible oils accounted for 7.82 million tonnes and non-edible oils for 121,000 tonnes, SEA said in a statement.
Palm oil imports nearly doubled to 3.97 million tonnes from 2.74 million tonnes a year earlier, while soft oil shipments, which include soybean and sunflower oils, fell to 3.85 million tonnes from 4.13 million tonnes.
Indonesia and Malaysia are the primary suppliers of palm oil to India. Argentina is the largest supplier of soybean oil, followed by Brazil, while Russia and Ukraine are the main sources of sunflower oil.
Cooking oil prices rose sharply over the past year, with palm oil prices up 14-15 per cent compared with April 2025 levels. Soybean oil and sunflower oil prices increased between 17 per cent and 22 per cent over the same period. Economic Times
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Indonesia Mulls Incentives for Palm Oil Investors
Jakarta. Indonesia is considering introducing incentives to draw capital into its palm oil sector as the country wants to move away from raw commodity export.Indonesian market analysis
In a recent conference with foreign ambassadors, Finance Minister Purbaya Yudhi Sadewa said that Indonesia had been doing its best to make the country investor-friendly. These "structural reforms" will possibly extend to the palm oil sector, some aimed at drawing capital into the production of higher-value products.
“In the future, we will probably provide some taxes on raw crude palm oil [CPO] export and incentives for the downstream palm oil products,” Purbaya told the forum in Jakarta on Tuesday.
“We invite companies from your area to invest in my country to produce [more sophisticated] products based on CPO.”
Investors have displayed quite an appetite for Indonesia’s palm oil sector. The government estimated that Indonesia had amassed around Rp 18.3 trillion (approximately $1 billion) in investments meant to help the country move up the palm oil value chain between January and March.
Indonesia did not say whether the money had come from domestic or foreign sources. Palm oil is in nearly everything, with this vegetable oil found in close to half of the packaged goods in supermarkets.
Indonesia has been banking on the so-called “debottlenecking task force” to address the problems that might come the investors’ way. Within six months of its establishment, the team claimed to have resolved problems that had hindered up to $30 billion worth of investments. Indonesian market analysis
Indonesia’s exports of CPO and its derivatives totaled $6.11 billion in Q1 2026, government data showed. The country is known to be the world’s largest palm oil supplier. Jakarta Globe
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May 13, 2026
Stronger palm oil demand seen in Malaysia, Indonesia despite export dip; supply concerns persist
April’s better-than-expected plantation output has raised hopes of a strong second quarter, even as a recent decline in exports is seen as temporary.
Analysts said demand for palm oil is likely to improve in the coming months, supported by policy changes in key producing countries. Malaysia is set to increase its biodiesel blend from B10 to B15 from June 1, while Indonesia plans to raise its B40 mandate further towards B50 from July 1. These moves are expected to boost consumption of palm oil.
At the same time, edible oil inventories in India are estimated to be 10 to 20 per cent lower than a year ago, adding to demand pressure, Focus Malaysia reported.
Global supplies of edible oils are expected to remain tight through 2026. There are also concerns that supply conditions could worsen in 2027 if a strong El Niño develops later this year. Supply worries had already emerged before tensions in the Middle East began, and rising energy prices since then have increased interest in biodiesel as an alternative fuel.
Countries such as Indonesia, Malaysia and Thailand are moving ahead with higher biodiesel blending targets. Once fully implemented, these measures could add demand of around three to four million metric tonnes of palm oil annually, roughly 10 per cent higher consumption.
While plantation companies are expected to face rising fertiliser and energy costs from the second half of 2026, the sector is still likely to benefit from higher crude palm oil (CPO) prices. Prices have risen from RM4,019 per metric tonne in January to RM4,568 in April, supported by steady demand growth of 3 to 4 per cent and increasing use in biodiesel.
The possibility of CPO prices remaining firm into 2027 is also rising due to the potential formation of a very strong El Niño. Historically, such weather patterns have had limited impact on oil palm yields, but very strong events can disrupt flowering and affect yields in the following season.
Past trends show that a very strong El Niño could reduce regional output by 2 to 9 per cent in the next year, which may push CPO prices up by another 5 to 10 per cent.
In the oleochemicals segment, prices have increased by 10 to 15 per cent since January 2026, though higher input costs and a weaker global economic outlook may weigh on demand.
Despite these challenges, analysts expect the sector’s returns to remain strong through 2026 and 2027, supported by improved financial positions of plantation companies and lower debt levels among larger players. Bio energy Times
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Noraini sees opportunities for deeper Malaysia-China palm oil collaboration
KUALA LUMPUR (May 12): Malaysia and China share significant opportunities to deepen collaboration in value-added industries for palm oil, particularly as demand continues to grow for sustainable, performance-driven, and application-specific palm-based products.
In a statement from the Malaysian Palm Oil Council (MPOC), Plantation and Commodities Minister Datuk Seri Dr Noraini Ahmad said palm oil today plays an increasingly important role across multiple high-growth sectors, including food manufacturing, oleochemicals, specialty ingredients, personal care, home care, and emerging industrial applications.
“Palm oil is no longer viewed solely as a commodity export, but increasingly as a strategic industrial enabler that supports innovation, sustainable manufacturing, and high-value economic growth.
“Malaysia sees strong potential to further strengthen collaboration with China through downstream development, technology exchange, and the expansion of value-added palm-based industries,” she added.
Noraini said this in her keynote address at the Malaysian Palm Oil Forum (MPOF) China 2026, hosted by the MPOC in Shanghai recently.
The forum highlighted the expanding role of Malaysian palm oil as a high-value, sustainable industrial input, supporting innovation, downstream development, and long-term economic cooperation between both countries.
She said that stronger Malaysia-China cooperation in the palm oil sector would not only enhance bilateral trade performance but also support industrial innovation, resilient supply chains, and long-term sustainable development between both countries.
Noraini also reaffirmed Malaysia’s commitment towards sustainable production practices through the mandatory Malaysian Sustainable Palm Oil (MSPO) certification scheme, which has been fully implemented across the national palm oil supply chain since 2020.
She noted that sustainability, traceability, and responsible production remain critical pillars in strengthening global confidence towards Malaysian palm oil, particularly within evolving international market expectations.
China remains one of Malaysia’s most important palm oil markets and a key contributor to future industry growth, according to the statement.
“In 2025, Malaysia exported approximately 2.64 million tonnes of palm oil and palm-based products to China, generating export earnings valued at approximately RM10.9 billion,” it said.
It said the MPOF China 2026 builds upon the MPOC’s broader strategic engagement efforts in China.
“In November 2025, the MPOC hosted 37 leading Chinese buyers in Malaysia to strengthen industry confidence through direct exposure to Malaysia’s plantations, refineries, downstream manufacturing facilities, and sustainability ecosystem.
“Through strategic platforms such as the MPOF, Malaysia remains committed to strengthening commercial partnerships, expanding market opportunities, and reinforcing the role of Malaysian palm oil as a sustainable, high-value solution supporting the next phase of Malaysia-China industrial growth and economic cooperation,” it said. The Edge
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US Representative Lloyd Doggett Introduces “Trade Responsibly for Environmental Emissions Act”
Washington, D.C.— Today, Rep. Lloyd Doggett (D-Austin), an active member of the House Ways and Means Trade Subcommittee and of the House Sustainable Energy and Environment Coalition (SEEC), released a video introducing the “Trade Responsibly for Environmental Emissions Act,” or “TREE Act.” By prohibiting the import of commodities and products derived from lands affected by deforestation or forest degradation, this bill is designed to position the United States as a leader together with the European Union in the struggle to protect one of our greatest tools to reduce greenhouse emissions: our forests.
In this new video, Rep. Doggett discusses the importance of the TREE Act with Jennifer Skene, the Global Forest Policy Director at the Natural Resources Defense Council (NRDC).
Each year, over 25 million acres around the world are being deforested, accounting for up to 21% of global greenhouse gas emissions. To incentivize forest protection, a new law, the European Union Deforestation Regulation, requires companies marketing products in the EU to certify that certain commodities—palm oil, rubber, soy, cocoa, cattle, and wood— and products derived from them have not been sourced from areas of deforestation and forest degradation. The TREE Act would establish a similar requirement for U.S. companies importing and selling these commodities and derived products, ensure consistent trade standards and ensure that American companies lead the way in the effort to protect the world’s invaluable forests. Many American companies already responsibly doing just that.
“Our world’s incredible forests, which serve as the lungs of our planet and the habitat for so many diverse plants and animals, are vanishing at an incredible pace,” said Rep. Doggett. “The TREE Act will not only protect our forests from those who seek to profit from their destruction, it will also help American businesses by assuring that they are responsible for compliance with a single, uniform set of sustainability trade rules.”
“Forest loss and degradation do not occur in a vacuum: they are driven by outmoded, irresponsible trade practices. From wood pulp to palm oil, the U.S. marketplace is saturated with products that needlessly come at the expense of forests and the invaluable role they play in sustaining life on earth, “said Jennifer Skene, Global Forest Policy Director at Natural Resources Defense Council. “The TREE Act creates long-overdue guardrails that ensure U.S. purchasers aren’t unwittingly purchasing forest destruction alongside their toilet paper and shampoo. It sets up consistent, common-sense trade standards that make the marketplace—and our future— healthier and more resilient.”
"Addressing deforestation, both global and domestic, is a key solution to the climate crisis,” said Anna Medema, Associate Director of Legislative Affairs for Forests and Public Lands at Sierra Club. “By curbing demand for commodities derived from deforestation and forest degradation, the TREE Act will protect forests for both their carbon sequestration and their biodiversity values, as well as support sustainable sourcing for American businesses. Sierra Club applauds the introduction of this important bill and thanks Rep. Doggett for his leadership in this effort.
“At a time when too many in power are eager to roll back environmental protections in the U.S., we support the lawmakers who are standing up for global forests by introducing the TREE Act,” said Alex Armstrong, Vice President of External Affairs at Mighty Earth. “Products coming into the U.S. like beef, soy, timber, cocoa, rubber, and palm oil are tainted by legal and illegal deforestation that is harming communities and wildlife. People and animals around the world rely on standing forests for their survival, and Americans don’t want to buy goods produced in the ashes of tropical rainforests. This legislation would set a new standard for forest protection in global supply chains. The world lost the equivalent of more than 15 football fields of primary forest every minute last year, so we are encouraged to see an ambitious policy proposal – one that is commensurate with the scale of the challenge of global deforestation.”
This bill is cosponsored by Representatives Yassamin Ansari (AZ-03), Julia Brownley (CA-26), Greg Casar (TX-35), Sean Casten (IL-06), Kathy Castor (FL-14), Emanuel Cleaver (MO-05), Steve Cohen (TN-09), Veronica Escobar (TX-16), Maxwell Frost (FL-10), Adelita Grijalva (AZ-07), Pramila Jayapal (WA-07), Hank Johnson (GA-04), Summer Lee (PA-12), James McGovern (MA-02), Eleanor Holmes Norton (D.C. At-large), Mark Pocan (WI-02), Mike Quigley (IL-05), Jamie Raskin (MA-08), Janice Schakowsky (IL-09), Rashida Tlaib (MI-12), Nikema Williams (GA-05). Doggett
Stronger palm oil demand seen in Malaysia, Indonesia despite export dip; supply concerns persist
April’s better-than-expected plantation output has raised hopes of a strong second quarter, even as a recent decline in exports is seen as temporary.
Analysts said demand for palm oil is likely to improve in the coming months, supported by policy changes in key producing countries. Malaysia is set to increase its biodiesel blend from B10 to B15 from June 1, while Indonesia plans to raise its B40 mandate further towards B50 from July 1. These moves are expected to boost consumption of palm oil.
At the same time, edible oil inventories in India are estimated to be 10 to 20 per cent lower than a year ago, adding to demand pressure, Focus Malaysia reported.
Global supplies of edible oils are expected to remain tight through 2026. There are also concerns that supply conditions could worsen in 2027 if a strong El Niño develops later this year. Supply worries had already emerged before tensions in the Middle East began, and rising energy prices since then have increased interest in biodiesel as an alternative fuel.
Countries such as Indonesia, Malaysia and Thailand are moving ahead with higher biodiesel blending targets. Once fully implemented, these measures could add demand of around three to four million metric tonnes of palm oil annually, roughly 10 per cent higher consumption.
While plantation companies are expected to face rising fertiliser and energy costs from the second half of 2026, the sector is still likely to benefit from higher crude palm oil (CPO) prices. Prices have risen from RM4,019 per metric tonne in January to RM4,568 in April, supported by steady demand growth of 3 to 4 per cent and increasing use in biodiesel.
The possibility of CPO prices remaining firm into 2027 is also rising due to the potential formation of a very strong El Niño. Historically, such weather patterns have had limited impact on oil palm yields, but very strong events can disrupt flowering and affect yields in the following season.
Past trends show that a very strong El Niño could reduce regional output by 2 to 9 per cent in the next year, which may push CPO prices up by another 5 to 10 per cent.
In the oleochemicals segment, prices have increased by 10 to 15 per cent since January 2026, though higher input costs and a weaker global economic outlook may weigh on demand.
Despite these challenges, analysts expect the sector’s returns to remain strong through 2026 and 2027, supported by improved financial positions of plantation companies and lower debt levels among larger players. Bio energy Times
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Noraini sees opportunities for deeper Malaysia-China palm oil collaboration
KUALA LUMPUR (May 12): Malaysia and China share significant opportunities to deepen collaboration in value-added industries for palm oil, particularly as demand continues to grow for sustainable, performance-driven, and application-specific palm-based products.
In a statement from the Malaysian Palm Oil Council (MPOC), Plantation and Commodities Minister Datuk Seri Dr Noraini Ahmad said palm oil today plays an increasingly important role across multiple high-growth sectors, including food manufacturing, oleochemicals, specialty ingredients, personal care, home care, and emerging industrial applications.
“Palm oil is no longer viewed solely as a commodity export, but increasingly as a strategic industrial enabler that supports innovation, sustainable manufacturing, and high-value economic growth.
“Malaysia sees strong potential to further strengthen collaboration with China through downstream development, technology exchange, and the expansion of value-added palm-based industries,” she added.
Noraini said this in her keynote address at the Malaysian Palm Oil Forum (MPOF) China 2026, hosted by the MPOC in Shanghai recently.
The forum highlighted the expanding role of Malaysian palm oil as a high-value, sustainable industrial input, supporting innovation, downstream development, and long-term economic cooperation between both countries.
She said that stronger Malaysia-China cooperation in the palm oil sector would not only enhance bilateral trade performance but also support industrial innovation, resilient supply chains, and long-term sustainable development between both countries.
Noraini also reaffirmed Malaysia’s commitment towards sustainable production practices through the mandatory Malaysian Sustainable Palm Oil (MSPO) certification scheme, which has been fully implemented across the national palm oil supply chain since 2020.
She noted that sustainability, traceability, and responsible production remain critical pillars in strengthening global confidence towards Malaysian palm oil, particularly within evolving international market expectations.
China remains one of Malaysia’s most important palm oil markets and a key contributor to future industry growth, according to the statement.
“In 2025, Malaysia exported approximately 2.64 million tonnes of palm oil and palm-based products to China, generating export earnings valued at approximately RM10.9 billion,” it said.
It said the MPOF China 2026 builds upon the MPOC’s broader strategic engagement efforts in China.
“In November 2025, the MPOC hosted 37 leading Chinese buyers in Malaysia to strengthen industry confidence through direct exposure to Malaysia’s plantations, refineries, downstream manufacturing facilities, and sustainability ecosystem.
“Through strategic platforms such as the MPOF, Malaysia remains committed to strengthening commercial partnerships, expanding market opportunities, and reinforcing the role of Malaysian palm oil as a sustainable, high-value solution supporting the next phase of Malaysia-China industrial growth and economic cooperation,” it said. The Edge
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US Representative Lloyd Doggett Introduces “Trade Responsibly for Environmental Emissions Act”
Washington, D.C.— Today, Rep. Lloyd Doggett (D-Austin), an active member of the House Ways and Means Trade Subcommittee and of the House Sustainable Energy and Environment Coalition (SEEC), released a video introducing the “Trade Responsibly for Environmental Emissions Act,” or “TREE Act.” By prohibiting the import of commodities and products derived from lands affected by deforestation or forest degradation, this bill is designed to position the United States as a leader together with the European Union in the struggle to protect one of our greatest tools to reduce greenhouse emissions: our forests.
In this new video, Rep. Doggett discusses the importance of the TREE Act with Jennifer Skene, the Global Forest Policy Director at the Natural Resources Defense Council (NRDC).
Each year, over 25 million acres around the world are being deforested, accounting for up to 21% of global greenhouse gas emissions. To incentivize forest protection, a new law, the European Union Deforestation Regulation, requires companies marketing products in the EU to certify that certain commodities—palm oil, rubber, soy, cocoa, cattle, and wood— and products derived from them have not been sourced from areas of deforestation and forest degradation. The TREE Act would establish a similar requirement for U.S. companies importing and selling these commodities and derived products, ensure consistent trade standards and ensure that American companies lead the way in the effort to protect the world’s invaluable forests. Many American companies already responsibly doing just that.
“Our world’s incredible forests, which serve as the lungs of our planet and the habitat for so many diverse plants and animals, are vanishing at an incredible pace,” said Rep. Doggett. “The TREE Act will not only protect our forests from those who seek to profit from their destruction, it will also help American businesses by assuring that they are responsible for compliance with a single, uniform set of sustainability trade rules.”
“Forest loss and degradation do not occur in a vacuum: they are driven by outmoded, irresponsible trade practices. From wood pulp to palm oil, the U.S. marketplace is saturated with products that needlessly come at the expense of forests and the invaluable role they play in sustaining life on earth, “said Jennifer Skene, Global Forest Policy Director at Natural Resources Defense Council. “The TREE Act creates long-overdue guardrails that ensure U.S. purchasers aren’t unwittingly purchasing forest destruction alongside their toilet paper and shampoo. It sets up consistent, common-sense trade standards that make the marketplace—and our future— healthier and more resilient.”
"Addressing deforestation, both global and domestic, is a key solution to the climate crisis,” said Anna Medema, Associate Director of Legislative Affairs for Forests and Public Lands at Sierra Club. “By curbing demand for commodities derived from deforestation and forest degradation, the TREE Act will protect forests for both their carbon sequestration and their biodiversity values, as well as support sustainable sourcing for American businesses. Sierra Club applauds the introduction of this important bill and thanks Rep. Doggett for his leadership in this effort.
“At a time when too many in power are eager to roll back environmental protections in the U.S., we support the lawmakers who are standing up for global forests by introducing the TREE Act,” said Alex Armstrong, Vice President of External Affairs at Mighty Earth. “Products coming into the U.S. like beef, soy, timber, cocoa, rubber, and palm oil are tainted by legal and illegal deforestation that is harming communities and wildlife. People and animals around the world rely on standing forests for their survival, and Americans don’t want to buy goods produced in the ashes of tropical rainforests. This legislation would set a new standard for forest protection in global supply chains. The world lost the equivalent of more than 15 football fields of primary forest every minute last year, so we are encouraged to see an ambitious policy proposal – one that is commensurate with the scale of the challenge of global deforestation.”
This bill is cosponsored by Representatives Yassamin Ansari (AZ-03), Julia Brownley (CA-26), Greg Casar (TX-35), Sean Casten (IL-06), Kathy Castor (FL-14), Emanuel Cleaver (MO-05), Steve Cohen (TN-09), Veronica Escobar (TX-16), Maxwell Frost (FL-10), Adelita Grijalva (AZ-07), Pramila Jayapal (WA-07), Hank Johnson (GA-04), Summer Lee (PA-12), James McGovern (MA-02), Eleanor Holmes Norton (D.C. At-large), Mark Pocan (WI-02), Mike Quigley (IL-05), Jamie Raskin (MA-08), Janice Schakowsky (IL-09), Rashida Tlaib (MI-12), Nikema Williams (GA-05). Doggett
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May 12, 2026
IISD partners with MSPO to strengthen the reliability of palm oil sustainability claims
The International Institute for Sustainable Development (IISD) and Malaysian Sustainable Palm Oil (MSPO) are partnering to strengthen the reliability, effectiveness, and visibility of sustainability claims associated with the MSPO Certification Scheme.
This collaboration comes at a critical time, when such claims are increasingly subject to regulatory scrutiny, due diligence requirements, and heightened expectations for verifiable and transparent information across global supply chains.
IISD and MSPO recognize that the future of sustainable consumption and trade will depend not only on certification coverage, but on the quality, clarity, and reliability of claims made to markets, regulators, and consumers.
IISD, an independent think tank headquartered in Canada, brings more than 30 years of expertise in policy and standards research, benchmarking, and evidence-based analysis. MSPO, Malaysia’s national certification scheme, plays a central role in advancing sustainable palm oil production in Malaysia and ensuring responsible supply chains.
Through this technical collaboration, IISD and MSPO will work together to
“Trust is a crucial component of any market-based sustainability initiative. Without clear evidence to substantiate their claims, there is no way for consumers and value chain actors to distinguish real impact from greenwashing,” said Cristina Larrea, director of agriculture, food, and sustainability initiatives at IISD. “We are delighted to be working with MSPO to help them deliver and disclose progress in making palm oil production in Malaysia more sustainable.”
About IISD
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Singapore-listed palm oil stocks catch biodiesel spark
A fortuitous mix of supportive fundamentals could enable them to burnish their sustainability credentials
SHARES of Singapore-listed palm oil companies have climbed steadily so far this year as the war in Iran further elevates the price of the commodity.
The fortuitous mix of supportive fundamentals could provide the palm oil companies with a precious opportunity to burnish their sustainability credentials ahead of a future where deforestation policies and nature reporting gain prominence.
One of the beneficiaries of the fossil fuel supply disruptions that have arisen from the Middle East conflict has been the uber useful palm oil.
Shares of Indonesian plantation group Kencana Agri : BNE 0% have shot up the most among Singapore-listed palm oil counters, doubling so far this year to S$0.53 on May 6 from S$0.26 at the end of 2025. The stock has been on a tear since the company announced in February that net profit for 2025 rose 54 per cent to US$18.4 million and declared a S$0.015 per share final dividend.
Shares of Wilmar International : F34 +0.27%, the largest Singapore-listed palm oil play by market capitalisation, last traded at S$3.75 on May 6, up 21.8 per cent so far this year. The stock reached a S$3.99 close in April, the highest in almost three years.
As reference, the broader market as measured by the Straits Times Index is up just 6.1 per cent on the year.
Price of palm oil
One of the key drivers behind the stock rallies has been the price of palm oil itself. The average spot month settlement price of crude palm oil (CPO) futures on Bursa Malaysia increased from RM4,043.82 per tonne in December 2025 to RM4,570.36 per tonne in April 2026, a 13 per cent hike.
That pricing strength rests on three factors, two of which are related to the Iran war. The first is that the closure of the Strait of Hormuz has driven up energy prices; since palm oil can be substituted for mineral oils in some fuels and consumer products, higher oil and gas prices also tend to raise prices for palm oil.
The second factor is that the ongoing supply disruption has strengthened South-east Asian governments’ resolve on biodiesel adoption.
Most notably, Indonesian Agriculture Minister Andi Amran Sulaiman said on Apr 19 that Indonesia will stop importing subsidised low-grade diesel from Jul 1 as the country imposes a mandate for B50 biodiesel. The number in B50 is the percentage of biofuel blended with mineral diesel, and B40 is the current mandate in Indonesia.
Malaysia also said in April that it will gradually raise its biodiesel mandate to B15 from the current B10 policy. Thailand currently subsidises B20 fuel.
The third factor is weather related. The general expectation is that higher surface temperatures due to the El Nino effect this year could hurt palm oil production, which would raise prices.
In March, OCBC analysts Chu Peng, Ada Lim and Ahmad A Enver raised their CPO target to RM4,300 per tonne from RM4,200 per tonne. OCBC has “buy” ratings on Wilmar and Bumitama Agri : P8Z -1.09%, and a “hold” call on Golden Agri-Resources : E5H 0%.
Fitch Solutions’ BMI is also forecasting RM4,300 per tonne for CPO in 2026, and expects RM4,460 per tonne by 2030. Well-followed edible oils analyst Dorab Mistry is going even further, calling for palm oil futures to hit around RM5,000 per tonne by June and possibly RM5,200 per tonne by mid-July.
Moving alongside those supportive factors are sustainability-related issues where the impact on the business hinges on how well the company meets market and regulatory expectations.
One of the more imminent ones is the European Union Deforestation Regulation, which aims to ban imports that originate from recently deforested land or have contributed to forest degradation. Products that use palm oil are among those covered by the rule.
This week, the EU completed a simplification review of the long-delayed rule and issued a draft for public comment. Among the proposed changes is an expansion of the scope to include more palm oil derivatives, including soap.
Perhaps more important is that the December 2026 implementation timeline is still intact. The good news is that the palm oil companies will now have greater visibility about the timing and the requirements of the new law. But the work to achieve compliance – and to protect revenue – lies ahead.
Another major transition event worthy of attention is ongoing progress towards standards for nature reporting.
In April, the International Sustainability Standards Board, which drafts global accounting rules on sustainability disclosures, agreed to propose a practice statement on nature-related disclosures. An exposure draft is expected to be put up for public comment in October.
The practice statement will not change requirements of the existing sustainability reporting standards, and instead provide guidance on how to disclose nature-related risks and opportunities within the current rules. But it is one step in a committed journey by the accounting body to address nature reporting.
The policy trajectory suggests that the palm oil companies will have to be more conscientious about their nature-related disclosures. This will take more resources, but if done well it could also raise a company’s profile with investors that incorporate nature factors into their deployment decisions.
The number and sophistication of those investors is likely to grow, in the same way that sustainability and climate factors are now integrated into the assessments by most major fund managers.
The supportive fundamental conditions – an energy crisis, a structural fuel transition and weather – don’t always fall in place at the same time, and the stock prices suggest that the market has big expectations for the year ahead.
Shareholders will no doubt be looking for dividends or some form of reward, but the companies might also want to consider diverting some of the profits towards future-proofing the company against the climate and sustainability transition risks that lay ahead. Business Times
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APOA welcomes Sri Lanka's rethink on palm oil ban with sustainability caveat
NEW DELHI: (May 11) The Asian Palm Oil Alliance (APOA) on Monday welcomed Sri Lanka's move to reconsider a ban on oil palm cultivation, saying responsible farming practices could help the country meet both food security and environmental goals.
Sri Lanka is weighing lifting the prohibition subject to final approvals and sustainability safeguards.
APOA Chairman Atul Chaturvedi said oil palm ranks among the most efficient vegetable oil crops globally in terms of yield per hectare and that economic and environmental objectives need not conflict. PTI News
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P100 – a constant for 25 years
At Case & Brewer, more than 25 years of using P100 palm oil has delivered the consistency and reliability the business depends on
Oly Smyth, owner of Case & Brewer in Dorchester, Dorset, aims for consistency every day. First stepping into the shop aged 15 in 1985, he took ownership in 2022 after seeing the business through Covid. Today, the shop remains firmly rooted in tradition, offering walk-ins only – no delivery or click-and-collect – and a clear focus on fish.
n example of that consistency is the continued use of P100 palm oil. “I’ve used it for as long as I can remember, since 2000 at least,” says Oly. The decision predates his ownership, but it is one he has continued to uphold. “Customers like it and we’ve always found it a better value oil than other ones,” he explains. “We have tried other brands of palm oil and other types of oil, like rapeseed, which just held in the food and it wasn’t nice at all. None of them worked for a busy takeaway like ours.”
Case & Brewer is a high volume shop with fish its biggest seller. As well as serving cod and haddock, Oly has successfully added hoki to the menu in a bid to tackle rising fish prices and offer customers a more cost-effective alternative. “It’s selling really well,” he says. “I don’t think hoki ever will catch up with cod, but we’re getting returning customers.”
With the frying range in constant use, Oly needs an oil that can perform under pressure and that is reliable. “P100 is very consistent, I’ve never had any troubles with it, and it lasts really well,” he says. “In fact, we don’t throw any away, we’re so busy, it goes out through the food, and we just keep topping it up.”
Longevity and consistency go hand in hand, giving Oly no reason to change brand over the last two decades. He adds: “A good cooking oil is paramount, it’s what you cook your food in, it has to be good. If you change something like your frying medium and it’s not good enough, customers will notice and that’s the last thing I want. I don’t want to scare off customers, I want to keep the ones I’ve got.”
With Case & Brewer a member of the Sustainable Palm Oil Community, sustainability has also become part of the reason why Oly won’t switch. He explains: “The fact that P100 is sustainable means we are doing the right thing. I like to use good quality products, but knowing our oil is better for the environment is a win-win.” Fry Magazine
IISD partners with MSPO to strengthen the reliability of palm oil sustainability claims
The International Institute for Sustainable Development (IISD) and Malaysian Sustainable Palm Oil (MSPO) are partnering to strengthen the reliability, effectiveness, and visibility of sustainability claims associated with the MSPO Certification Scheme.
This collaboration comes at a critical time, when such claims are increasingly subject to regulatory scrutiny, due diligence requirements, and heightened expectations for verifiable and transparent information across global supply chains.
IISD and MSPO recognize that the future of sustainable consumption and trade will depend not only on certification coverage, but on the quality, clarity, and reliability of claims made to markets, regulators, and consumers.
IISD, an independent think tank headquartered in Canada, brings more than 30 years of expertise in policy and standards research, benchmarking, and evidence-based analysis. MSPO, Malaysia’s national certification scheme, plays a central role in advancing sustainable palm oil production in Malaysia and ensuring responsible supply chains.
Through this technical collaboration, IISD and MSPO will work together to
- benchmark MSPO against international best practices and conduct a pilot to test selected recommendations to strengthen the reliability of MSPO’s claims,
- develop clear and effective ways for MSPO to communicate its sustainability claims to support informed decision making among consumers and build trust
- among market actors, and
- contribute to global efforts to advance reliable, evidence-based sustainability frameworks.
“Trust is a crucial component of any market-based sustainability initiative. Without clear evidence to substantiate their claims, there is no way for consumers and value chain actors to distinguish real impact from greenwashing,” said Cristina Larrea, director of agriculture, food, and sustainability initiatives at IISD. “We are delighted to be working with MSPO to help them deliver and disclose progress in making palm oil production in Malaysia more sustainable.”
About IISD
---------
Singapore-listed palm oil stocks catch biodiesel spark
A fortuitous mix of supportive fundamentals could enable them to burnish their sustainability credentials
SHARES of Singapore-listed palm oil companies have climbed steadily so far this year as the war in Iran further elevates the price of the commodity.
The fortuitous mix of supportive fundamentals could provide the palm oil companies with a precious opportunity to burnish their sustainability credentials ahead of a future where deforestation policies and nature reporting gain prominence.
One of the beneficiaries of the fossil fuel supply disruptions that have arisen from the Middle East conflict has been the uber useful palm oil.
Shares of Indonesian plantation group Kencana Agri : BNE 0% have shot up the most among Singapore-listed palm oil counters, doubling so far this year to S$0.53 on May 6 from S$0.26 at the end of 2025. The stock has been on a tear since the company announced in February that net profit for 2025 rose 54 per cent to US$18.4 million and declared a S$0.015 per share final dividend.
Shares of Wilmar International : F34 +0.27%, the largest Singapore-listed palm oil play by market capitalisation, last traded at S$3.75 on May 6, up 21.8 per cent so far this year. The stock reached a S$3.99 close in April, the highest in almost three years.
As reference, the broader market as measured by the Straits Times Index is up just 6.1 per cent on the year.
Price of palm oil
One of the key drivers behind the stock rallies has been the price of palm oil itself. The average spot month settlement price of crude palm oil (CPO) futures on Bursa Malaysia increased from RM4,043.82 per tonne in December 2025 to RM4,570.36 per tonne in April 2026, a 13 per cent hike.
That pricing strength rests on three factors, two of which are related to the Iran war. The first is that the closure of the Strait of Hormuz has driven up energy prices; since palm oil can be substituted for mineral oils in some fuels and consumer products, higher oil and gas prices also tend to raise prices for palm oil.
The second factor is that the ongoing supply disruption has strengthened South-east Asian governments’ resolve on biodiesel adoption.
Most notably, Indonesian Agriculture Minister Andi Amran Sulaiman said on Apr 19 that Indonesia will stop importing subsidised low-grade diesel from Jul 1 as the country imposes a mandate for B50 biodiesel. The number in B50 is the percentage of biofuel blended with mineral diesel, and B40 is the current mandate in Indonesia.
Malaysia also said in April that it will gradually raise its biodiesel mandate to B15 from the current B10 policy. Thailand currently subsidises B20 fuel.
The third factor is weather related. The general expectation is that higher surface temperatures due to the El Nino effect this year could hurt palm oil production, which would raise prices.
In March, OCBC analysts Chu Peng, Ada Lim and Ahmad A Enver raised their CPO target to RM4,300 per tonne from RM4,200 per tonne. OCBC has “buy” ratings on Wilmar and Bumitama Agri : P8Z -1.09%, and a “hold” call on Golden Agri-Resources : E5H 0%.
Fitch Solutions’ BMI is also forecasting RM4,300 per tonne for CPO in 2026, and expects RM4,460 per tonne by 2030. Well-followed edible oils analyst Dorab Mistry is going even further, calling for palm oil futures to hit around RM5,000 per tonne by June and possibly RM5,200 per tonne by mid-July.
Moving alongside those supportive factors are sustainability-related issues where the impact on the business hinges on how well the company meets market and regulatory expectations.
One of the more imminent ones is the European Union Deforestation Regulation, which aims to ban imports that originate from recently deforested land or have contributed to forest degradation. Products that use palm oil are among those covered by the rule.
This week, the EU completed a simplification review of the long-delayed rule and issued a draft for public comment. Among the proposed changes is an expansion of the scope to include more palm oil derivatives, including soap.
Perhaps more important is that the December 2026 implementation timeline is still intact. The good news is that the palm oil companies will now have greater visibility about the timing and the requirements of the new law. But the work to achieve compliance – and to protect revenue – lies ahead.
Another major transition event worthy of attention is ongoing progress towards standards for nature reporting.
In April, the International Sustainability Standards Board, which drafts global accounting rules on sustainability disclosures, agreed to propose a practice statement on nature-related disclosures. An exposure draft is expected to be put up for public comment in October.
The practice statement will not change requirements of the existing sustainability reporting standards, and instead provide guidance on how to disclose nature-related risks and opportunities within the current rules. But it is one step in a committed journey by the accounting body to address nature reporting.
The policy trajectory suggests that the palm oil companies will have to be more conscientious about their nature-related disclosures. This will take more resources, but if done well it could also raise a company’s profile with investors that incorporate nature factors into their deployment decisions.
The number and sophistication of those investors is likely to grow, in the same way that sustainability and climate factors are now integrated into the assessments by most major fund managers.
The supportive fundamental conditions – an energy crisis, a structural fuel transition and weather – don’t always fall in place at the same time, and the stock prices suggest that the market has big expectations for the year ahead.
Shareholders will no doubt be looking for dividends or some form of reward, but the companies might also want to consider diverting some of the profits towards future-proofing the company against the climate and sustainability transition risks that lay ahead. Business Times
----------
APOA welcomes Sri Lanka's rethink on palm oil ban with sustainability caveat
NEW DELHI: (May 11) The Asian Palm Oil Alliance (APOA) on Monday welcomed Sri Lanka's move to reconsider a ban on oil palm cultivation, saying responsible farming practices could help the country meet both food security and environmental goals.
Sri Lanka is weighing lifting the prohibition subject to final approvals and sustainability safeguards.
APOA Chairman Atul Chaturvedi said oil palm ranks among the most efficient vegetable oil crops globally in terms of yield per hectare and that economic and environmental objectives need not conflict. PTI News
--------
P100 – a constant for 25 years
At Case & Brewer, more than 25 years of using P100 palm oil has delivered the consistency and reliability the business depends on
Oly Smyth, owner of Case & Brewer in Dorchester, Dorset, aims for consistency every day. First stepping into the shop aged 15 in 1985, he took ownership in 2022 after seeing the business through Covid. Today, the shop remains firmly rooted in tradition, offering walk-ins only – no delivery or click-and-collect – and a clear focus on fish.
n example of that consistency is the continued use of P100 palm oil. “I’ve used it for as long as I can remember, since 2000 at least,” says Oly. The decision predates his ownership, but it is one he has continued to uphold. “Customers like it and we’ve always found it a better value oil than other ones,” he explains. “We have tried other brands of palm oil and other types of oil, like rapeseed, which just held in the food and it wasn’t nice at all. None of them worked for a busy takeaway like ours.”
Case & Brewer is a high volume shop with fish its biggest seller. As well as serving cod and haddock, Oly has successfully added hoki to the menu in a bid to tackle rising fish prices and offer customers a more cost-effective alternative. “It’s selling really well,” he says. “I don’t think hoki ever will catch up with cod, but we’re getting returning customers.”
With the frying range in constant use, Oly needs an oil that can perform under pressure and that is reliable. “P100 is very consistent, I’ve never had any troubles with it, and it lasts really well,” he says. “In fact, we don’t throw any away, we’re so busy, it goes out through the food, and we just keep topping it up.”
Longevity and consistency go hand in hand, giving Oly no reason to change brand over the last two decades. He adds: “A good cooking oil is paramount, it’s what you cook your food in, it has to be good. If you change something like your frying medium and it’s not good enough, customers will notice and that’s the last thing I want. I don’t want to scare off customers, I want to keep the ones I’ve got.”
With Case & Brewer a member of the Sustainable Palm Oil Community, sustainability has also become part of the reason why Oly won’t switch. He explains: “The fact that P100 is sustainable means we are doing the right thing. I like to use good quality products, but knowing our oil is better for the environment is a win-win.” Fry Magazine
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May 10, 2026
A new B50 diesel plan could save $9.18 billion, but the 50% palm blend may redraw the fuel market overnight
Indonesia says it wants to flip a big switch on July 1, 2026. The plan is to move the country’s diesel pool to B50, a blend that doubles down on palm-based biodiesel, while the government publishes a fresh reference price every month.
For anyone who runs a delivery fleet or pays for generator fuel, the details are where the stress lives. If pricing, supply, and engine reliability line up, B50 could cut imports and emissions together. If they do not, the country risks turning energy security into a new kind of volatility.
B50 in plain English
B50 means a diesel fuel that is 50% conventional petroleum diesel and 50% biodiesel, typically a palm-derived FAME component (fatty acid methyl ester). Indonesia already mandates B40, so this is an escalation of an existing system, not a brand new experiment.
Officials have tied the move to security as much as climate. The Energy and Mineral Resources Ministry says the B50 shift is meant to strengthen resilience against global supply disruptions.
The monthly reference price is the real pressure point
Energy officials say they are finalizing the B50 pricing formula and will keep using the established approach, then publish the reference price each month. Eniya Listiani Dewi has described it plainly, saying the government will follow the formula and issue the price monthly.
That is good for transparency, but it can also move market swings into everyday costs faster. In the United States, fuel regulators note that storing and dispensing blends above B20 often triggers additional compatibility requirements, which is one reason higher blends tend to come with extra testing and documentation.
So the question is simple. Will the policy smooth bills, or just make the fluctuations easier to track?
Emissions targets look big because the blend is big
Indonesia’s energy ministry has said B50 is expected to reduce greenhouse gas emissions by up to 46.72 million metric tons of CO2 in 2026, which is roughly 51.5 million U.S. tons. Treat it as a target, not a guarantee, because outcomes depend on how much B50 is used and how consistently it meets quality standards.
There is a clear baseline in today’s program. Officials say B40 has reduced diesel imports by 3.3 million kiloliters, about 872 million gallons, and cut emissions by 38.88 million metric tons of CO2 equivalent, about 42.9 million U.S. tons.
The foreign exchange math is why the government is moving fast
Antara reported that officials project B50 could save up to 157.28 trillion rupiah, about $9.18 billion, in foreign exchange in 2026. In that same report, Eniya Listiani Dewi said “God willing, it can take effect on July 1.”
Officials also say the B50 estimate is higher than the earlier B40 savings target of 140 trillion rupiah, which is about $8.2 billion using the same conversion in the government estimate.
Separately, Indonesia’s Cabinet Secretariat quoted Coordinating Minister Airlangga Hartarto saying B50 could reduce fossil-based fuel use by 4 million kiloliters, about 1.06 billion gallons, and deliver savings including lower biodiesel subsidies.
Palm oil supply and subsidy funding are the hard constraints
Energy officials have said they expect FAME supply to be sufficient for a July rollout, but they also acknowledge they are still working through consumption projections with the oil and gas directorate.
Kumparan reported that biodiesel distribution by mid-April reached 3.90 million kiloliters, about 1.03 billion gallons, which officials described as roughly a quarter of the year’s initial allocation of 15.65 million kiloliters, about 4.13 billion gallons.
On the industry side, Reuters has cited estimates that a full move to B50 would push biodiesel demand toward about 19 million kiloliters a year, roughly 5.0 billion gallons, and could require additional production capacity. Reuters has also reported that Indonesia has considered raising palm oil export levies to keep the biodiesel funding pool healthy as blend levels climb.
Road tests are about more than mileage
Indonesia’s Energy and Mineral Resources Ministry says its B50 testing started with lab work in early 2025 and expanded into road and field trials across six sectors on December 9, 2025. The list includes automotive, mining, maritime transport, rail, agriculture machinery, and power generation, which is exactly where diesel demand is hardest to replace.
The early readout has been cautiously positive. The ministry says heavier diesel vehicles over 3.5 metric tons, about 7,700 pounds, completed a 40,000 kilometer run, about 24,855 miles, and lighter vehicles were at 40,000 kilometers on a 50,000 kilometer target, about 31,069 miles, with engine and fuel filter conditions still within manufacturer recommendations.
Officials are also tightening the fuel specs behind the scenes. The ministry has highlighted stricter limits on water content and monoglycerides, alongside higher oxidation stability targets (including a 300 ppm water limit, a 0.47% mass cap on monoglycerides, and a 900 minute minimum for oxidation stability) to keep the fuel stable in storage and distribution.
A defense use case is already emerging
This is not only a civilian story. Antara reported that Indonesia’s Navy plans to use B50 for patrol vessels, and the Navy chief said “Going forward, we will use B50 fuel,” while noting it will require engine adjustments. Voz Populi
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Biofuels, potential to double capacity in Italia
Today plants for three million tonnes will increase with the new conversion of Eni's Livorno hub
Significant industrial potential, the sword of Damocles of European legislation to 2035 and the need for greater recognition. The biofuel industry in Italia has significant operators and conversion projects, but in some ways risks remaining in the lurch. Although the current Gulf crisis continues to show the limits of Italy's energy dependency.
"In the current context, all fuels are critical, but biofuels have the undoubted advantage of being decarbonised and reducing dependence on imports of finished products or oil," summarises Unem President Gianni Murano. "Moreover, they open up ample possibilities for the creation of European and national supply chains for their production," he continues, "as highlighted by a very recent study by the European Commission Mobilization of Industrial Capacity Building for Advanced Biofuels. The obstacles lie in European legislation that on the one hand indicates the need for them, and on the other hand still does not recognise them as energy carriers to power zero-emission vehicles post 2035. On top of that, there is excessive regulation that tends to complicate the agricultural potential of biofuels.
Domestic Production
Domestic production is around 1.5 million tonnes against a demand of around 2 million. 'We have an already installed production capacity of more than 3 million tonnes that is destined to grow thanks to a third biorefinery under construction in Livorno and other projects,' Murano clarifies.
The reference is to the conversion of Eni's 500 thousand tonne/year plant in Tuscany, which will be ready by 2026. The group's total biorefining capacity currently stands at 1.65 million tonnes per year, with production of Hvo (hydrotreated vegetable oil, usable as diesel) in Venice (400 thousand tonnes, which will become 600 thousand by 2027), in Gela and the USA, and Saf (sustainable aviation fuel), also in Gela from 2025. Products sold in Italia and Europe. By 2030 Eni aims to reach over 5 million tonnes of biofuel production capacity and over 2 million tonnes of Saf; it has several projects under development including in Sannazzaro de' Burgondi and Priolo in Italia, as well as in Malaysia and South Korea.
"With an enabling regulatory framework," Murano further emphasises, "it would be possible to double production capacity and launch specific investments for the partial or total reconversion of refineries and the construction of dedicated plants. According to estimates by Unem's Research Centre, the consumption of petroleum products by 2030 will be reduced by almost 10 million tonnes compared to today, while biofuels and other low-carbon fuels will grow to 6 million tonnes, touching 10 million by 2040.
The potential of biodiesel
Alongside Hvo, biodiesel is also making a comeback (both in fact have the same production base, vegetable oil residues), with producers gathered in Assitol's Biodiesel Group claiming 'industrial and technological maturity' (in Italia we also have the big player Masol Continentale) and calling for a tax adjustment 'that would put biodiesel in a position to compete on equal terms with Hvo and diesel'.
The European Red III regulation envisages that advanced biofuels will cover more than one third of all renewable energy consumed in the transport sector by 2030. In 2023, Italia, first in Europe, legislated on the matter and recognised the possibility of using liquid biofuels not only mixed with diesel, but in purity. 'There are technologies on the market,' says Carlotta Trucillo, deputy director of Assitol's Biodiesel Group, 'that can ensure that biofuels can be optimally adapted to traditional engines, even when used 100% pure. One of these technologies was developed in Italia and we presented it in April'.
The Ministry of Transport, in November, approved vehicles that adopt systems to use biodiesel safely, but there is a lack of fiscal equalisation of the biofuel used mainly in heavy transport compared to diesel and commercial Hvo, particularly for engines above Euro5. 'Generally speaking,' adds Trucillo, 'we need more regulatory confidence in biodiesel, looking for example at vehicles used by public administration and construction sites in cities, to encourage the use of this type of fuel in purity'.
Benefits and Challenges
The environmental impact of biofuels is estimated to be up to 95 per cent less than that of diesel (considering the entire life cycle), as well as less particulate matter, estimated at around 60 per cent less. However, an essential issue remains in the background, that of the certification of supply chains, to reduce the risks linked to fraudulent imports of uncontrolled feedstocks, to avoid conflicts with agriculture connected, for example, with the intensive cultivation of palm oil and rapeseed. And to ensure a real environmental benefit. Ilsole24ore
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A new B50 diesel plan could save $9.18 billion, but the 50% palm blend may redraw the fuel market overnight
Indonesia says it wants to flip a big switch on July 1, 2026. The plan is to move the country’s diesel pool to B50, a blend that doubles down on palm-based biodiesel, while the government publishes a fresh reference price every month.
For anyone who runs a delivery fleet or pays for generator fuel, the details are where the stress lives. If pricing, supply, and engine reliability line up, B50 could cut imports and emissions together. If they do not, the country risks turning energy security into a new kind of volatility.
B50 in plain English
B50 means a diesel fuel that is 50% conventional petroleum diesel and 50% biodiesel, typically a palm-derived FAME component (fatty acid methyl ester). Indonesia already mandates B40, so this is an escalation of an existing system, not a brand new experiment.
Officials have tied the move to security as much as climate. The Energy and Mineral Resources Ministry says the B50 shift is meant to strengthen resilience against global supply disruptions.
The monthly reference price is the real pressure point
Energy officials say they are finalizing the B50 pricing formula and will keep using the established approach, then publish the reference price each month. Eniya Listiani Dewi has described it plainly, saying the government will follow the formula and issue the price monthly.
That is good for transparency, but it can also move market swings into everyday costs faster. In the United States, fuel regulators note that storing and dispensing blends above B20 often triggers additional compatibility requirements, which is one reason higher blends tend to come with extra testing and documentation.
So the question is simple. Will the policy smooth bills, or just make the fluctuations easier to track?
Emissions targets look big because the blend is big
Indonesia’s energy ministry has said B50 is expected to reduce greenhouse gas emissions by up to 46.72 million metric tons of CO2 in 2026, which is roughly 51.5 million U.S. tons. Treat it as a target, not a guarantee, because outcomes depend on how much B50 is used and how consistently it meets quality standards.
There is a clear baseline in today’s program. Officials say B40 has reduced diesel imports by 3.3 million kiloliters, about 872 million gallons, and cut emissions by 38.88 million metric tons of CO2 equivalent, about 42.9 million U.S. tons.
The foreign exchange math is why the government is moving fast
Antara reported that officials project B50 could save up to 157.28 trillion rupiah, about $9.18 billion, in foreign exchange in 2026. In that same report, Eniya Listiani Dewi said “God willing, it can take effect on July 1.”
Officials also say the B50 estimate is higher than the earlier B40 savings target of 140 trillion rupiah, which is about $8.2 billion using the same conversion in the government estimate.
Separately, Indonesia’s Cabinet Secretariat quoted Coordinating Minister Airlangga Hartarto saying B50 could reduce fossil-based fuel use by 4 million kiloliters, about 1.06 billion gallons, and deliver savings including lower biodiesel subsidies.
Palm oil supply and subsidy funding are the hard constraints
Energy officials have said they expect FAME supply to be sufficient for a July rollout, but they also acknowledge they are still working through consumption projections with the oil and gas directorate.
Kumparan reported that biodiesel distribution by mid-April reached 3.90 million kiloliters, about 1.03 billion gallons, which officials described as roughly a quarter of the year’s initial allocation of 15.65 million kiloliters, about 4.13 billion gallons.
On the industry side, Reuters has cited estimates that a full move to B50 would push biodiesel demand toward about 19 million kiloliters a year, roughly 5.0 billion gallons, and could require additional production capacity. Reuters has also reported that Indonesia has considered raising palm oil export levies to keep the biodiesel funding pool healthy as blend levels climb.
Road tests are about more than mileage
Indonesia’s Energy and Mineral Resources Ministry says its B50 testing started with lab work in early 2025 and expanded into road and field trials across six sectors on December 9, 2025. The list includes automotive, mining, maritime transport, rail, agriculture machinery, and power generation, which is exactly where diesel demand is hardest to replace.
The early readout has been cautiously positive. The ministry says heavier diesel vehicles over 3.5 metric tons, about 7,700 pounds, completed a 40,000 kilometer run, about 24,855 miles, and lighter vehicles were at 40,000 kilometers on a 50,000 kilometer target, about 31,069 miles, with engine and fuel filter conditions still within manufacturer recommendations.
Officials are also tightening the fuel specs behind the scenes. The ministry has highlighted stricter limits on water content and monoglycerides, alongside higher oxidation stability targets (including a 300 ppm water limit, a 0.47% mass cap on monoglycerides, and a 900 minute minimum for oxidation stability) to keep the fuel stable in storage and distribution.
A defense use case is already emerging
This is not only a civilian story. Antara reported that Indonesia’s Navy plans to use B50 for patrol vessels, and the Navy chief said “Going forward, we will use B50 fuel,” while noting it will require engine adjustments. Voz Populi
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Biofuels, potential to double capacity in Italia
Today plants for three million tonnes will increase with the new conversion of Eni's Livorno hub
Significant industrial potential, the sword of Damocles of European legislation to 2035 and the need for greater recognition. The biofuel industry in Italia has significant operators and conversion projects, but in some ways risks remaining in the lurch. Although the current Gulf crisis continues to show the limits of Italy's energy dependency.
"In the current context, all fuels are critical, but biofuels have the undoubted advantage of being decarbonised and reducing dependence on imports of finished products or oil," summarises Unem President Gianni Murano. "Moreover, they open up ample possibilities for the creation of European and national supply chains for their production," he continues, "as highlighted by a very recent study by the European Commission Mobilization of Industrial Capacity Building for Advanced Biofuels. The obstacles lie in European legislation that on the one hand indicates the need for them, and on the other hand still does not recognise them as energy carriers to power zero-emission vehicles post 2035. On top of that, there is excessive regulation that tends to complicate the agricultural potential of biofuels.
Domestic Production
Domestic production is around 1.5 million tonnes against a demand of around 2 million. 'We have an already installed production capacity of more than 3 million tonnes that is destined to grow thanks to a third biorefinery under construction in Livorno and other projects,' Murano clarifies.
The reference is to the conversion of Eni's 500 thousand tonne/year plant in Tuscany, which will be ready by 2026. The group's total biorefining capacity currently stands at 1.65 million tonnes per year, with production of Hvo (hydrotreated vegetable oil, usable as diesel) in Venice (400 thousand tonnes, which will become 600 thousand by 2027), in Gela and the USA, and Saf (sustainable aviation fuel), also in Gela from 2025. Products sold in Italia and Europe. By 2030 Eni aims to reach over 5 million tonnes of biofuel production capacity and over 2 million tonnes of Saf; it has several projects under development including in Sannazzaro de' Burgondi and Priolo in Italia, as well as in Malaysia and South Korea.
"With an enabling regulatory framework," Murano further emphasises, "it would be possible to double production capacity and launch specific investments for the partial or total reconversion of refineries and the construction of dedicated plants. According to estimates by Unem's Research Centre, the consumption of petroleum products by 2030 will be reduced by almost 10 million tonnes compared to today, while biofuels and other low-carbon fuels will grow to 6 million tonnes, touching 10 million by 2040.
The potential of biodiesel
Alongside Hvo, biodiesel is also making a comeback (both in fact have the same production base, vegetable oil residues), with producers gathered in Assitol's Biodiesel Group claiming 'industrial and technological maturity' (in Italia we also have the big player Masol Continentale) and calling for a tax adjustment 'that would put biodiesel in a position to compete on equal terms with Hvo and diesel'.
The European Red III regulation envisages that advanced biofuels will cover more than one third of all renewable energy consumed in the transport sector by 2030. In 2023, Italia, first in Europe, legislated on the matter and recognised the possibility of using liquid biofuels not only mixed with diesel, but in purity. 'There are technologies on the market,' says Carlotta Trucillo, deputy director of Assitol's Biodiesel Group, 'that can ensure that biofuels can be optimally adapted to traditional engines, even when used 100% pure. One of these technologies was developed in Italia and we presented it in April'.
The Ministry of Transport, in November, approved vehicles that adopt systems to use biodiesel safely, but there is a lack of fiscal equalisation of the biofuel used mainly in heavy transport compared to diesel and commercial Hvo, particularly for engines above Euro5. 'Generally speaking,' adds Trucillo, 'we need more regulatory confidence in biodiesel, looking for example at vehicles used by public administration and construction sites in cities, to encourage the use of this type of fuel in purity'.
Benefits and Challenges
The environmental impact of biofuels is estimated to be up to 95 per cent less than that of diesel (considering the entire life cycle), as well as less particulate matter, estimated at around 60 per cent less. However, an essential issue remains in the background, that of the certification of supply chains, to reduce the risks linked to fraudulent imports of uncontrolled feedstocks, to avoid conflicts with agriculture connected, for example, with the intensive cultivation of palm oil and rapeseed. And to ensure a real environmental benefit. Ilsole24ore
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May 09, 2026
Biodiesel demand booms amidst Middle East conflict
The closure of the Strait of Hormuz has cut off more than 14 million barrels of crude oil per day from the global supply
ASKATOON — Global demand for bio-based diesel is soaring, which is spurring consumption of vegetable oil feedstocks.
“This is massive,” said Fred Ghatala, president of Advanced Biofuels Canada.
“It is very apparent that the energy security benefits of biofuels are being leaned on around the globe, especially in countries with the fastest growth in fuel demand.”
The closure of the Strait of Hormuz has cut off more than 14 million barrels of crude oil per day from the global supply, and that is reinforcing plans that were already in the works to diversify fuel supplies in many countries.
The U.S. Environmental Protection Agency recently announced its final Renewable Volume Obligation (RVO) blending rule for biomass-based diesel.
The EPA set the blending mandate for biodiesel and renewable diesel to 5.4 billion gallons in 2026 and 5.5 billion gallons in 2027.
That is a 61 to 64 per cent increase over the 2025 level of 3.35 billion gallons. Producer
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European Union: EU Commission Publishes Simplification Review of EUDR
In brief
On 4 May 2026, the European Commission published its long‑awaited report on the simplification of the EU Deforestation Regulation (EUDR), accompanied by an updated guidance document, updated Frequently Asked Questions (FAQ) and a draft Delegated Act amending the EUDR’s product scope. The measures are expected to reduce annual compliance costs for companies subject to EUDR obligations by about 75% compared to the original EUDR. At the same time, the report signals regulatory certainty by highlighting that the EUDR will not be reopened and that the existing timelines for its implementation continue to apply.
This client alert highlights the key modifications of the proposed changes.
In depth
Modifying the product scope
The draft Delegated Act proposes to reduce the product scope of the EUDR set out in Annex I of the Regulation by:
Removing several categories of cattle hides, skins, and leather products including raw bovine hides and skins, tanned or crust bovine hides and skins without hair and further prepared leather (Harmonized System (HS) codes ex 4101, 4104, 4107), as well as retreaded tyres, particularly relevant for the automotive and transport sector;
Clarifying that waste, used, and second‑hand products fall outside the scope of the EUDR;
Exempting product samples and products used for examination, analysis, or testing; and
Excluding items and correspondence entirely from the EUDR’s scope.
At the same time, the draft Delegated Act also proposes to extend the product scope, most notably to soluble coffee, palm oil derivatives (for example, soap made with palm oil), and frozen cattle tongues.
These proposed changes to the product scope likely affect a variety of industries, including the automotive and transport industry, the fashion industry, the consumer good and retail sector as well as the chemical industry.
Clarifying extent of due diligence obligations of upstream operators
To specify the extent of the obligation of upstream operators to exercise due diligence with respect to the compliance of relevant products with the national law, the Commission plans to establish a repository of relevant legislation on a dedicated website by December 2026. Countries of production will be able to contribute lists of their applicable legislation. Similarly, the Commission intends to establish a web‑based repository of certification schemes applicable to EUDR‑relevant commodities. With these measures, the Commission addresses two of the major challenges companies were facing when implementing the EUDR.
While the updated guidance document elaborates on simplified due diligence obligations for commodities and products originating from low-risk countries, the simplification package does not introduce a “no‑risk” or “negligible‑risk” country classification that would fully exempt operators from their obligations.
Downstream supply chain obligations
The Commission further clarifies that first downstream operators or traders are not required to actively request reference numbers or declaration identifiers. Instead, they can rely on upstream operators to pass on reference numbers or declaration identifiers.
It also clarifies that re‑importing products qualifies as a downstream activity. This means that importers who can demonstrate that a product has previously been placed on the EU market will also benefit from the reduced due diligence obligations for downstream entities.
Downstream entities would, however, remain obligated to inform the competent authorities where they have information indicating non-compliance with the EUDR. The guidance documents provide practical direction on how downstream actors can verify the exercise of required due diligence by upstream actors where substantiated concerns arise. This includes checking the validity of reference numbers and declaration identifiers, consulting additional sources (e.g., benchmarking or publicly available reports), or requesting further information from their suppliers.
Information system
The Commission intends to relaunch the information system, to which due diligence statements must be submitted, in June 2026. Subsequent updates introducing additional functionalities are scheduled for later in the summer, ahead of the EUDR’s application. These updates will reflect the legislative changes made to the EUDR, allowing for the registration of micro and small primary operators, downstream operators, and traders, as well as for the submission of simplified declarations.
Next steps
Against this background, companies should:
Continue to prepare for compliance with the EUDR by 30 December 2026 (large and medium-sized companies) or 30 June 2027 (small and micro-sized companies);
Re-evaluate their scoping exercise to determine which products continue to be covered products by the EUDR;
Monitor the ongoing legislative process with respect to the delegated act and consider providing feedback to the Commission until 1 June 2026; and Review and adapt their compliance system to the applicable due diligence obligations. Baker McKenzie
Biodiesel demand booms amidst Middle East conflict
The closure of the Strait of Hormuz has cut off more than 14 million barrels of crude oil per day from the global supply
ASKATOON — Global demand for bio-based diesel is soaring, which is spurring consumption of vegetable oil feedstocks.
“This is massive,” said Fred Ghatala, president of Advanced Biofuels Canada.
“It is very apparent that the energy security benefits of biofuels are being leaned on around the globe, especially in countries with the fastest growth in fuel demand.”
The closure of the Strait of Hormuz has cut off more than 14 million barrels of crude oil per day from the global supply, and that is reinforcing plans that were already in the works to diversify fuel supplies in many countries.
The U.S. Environmental Protection Agency recently announced its final Renewable Volume Obligation (RVO) blending rule for biomass-based diesel.
The EPA set the blending mandate for biodiesel and renewable diesel to 5.4 billion gallons in 2026 and 5.5 billion gallons in 2027.
That is a 61 to 64 per cent increase over the 2025 level of 3.35 billion gallons. Producer
---------
European Union: EU Commission Publishes Simplification Review of EUDR
In brief
On 4 May 2026, the European Commission published its long‑awaited report on the simplification of the EU Deforestation Regulation (EUDR), accompanied by an updated guidance document, updated Frequently Asked Questions (FAQ) and a draft Delegated Act amending the EUDR’s product scope. The measures are expected to reduce annual compliance costs for companies subject to EUDR obligations by about 75% compared to the original EUDR. At the same time, the report signals regulatory certainty by highlighting that the EUDR will not be reopened and that the existing timelines for its implementation continue to apply.
This client alert highlights the key modifications of the proposed changes.
In depth
Modifying the product scope
The draft Delegated Act proposes to reduce the product scope of the EUDR set out in Annex I of the Regulation by:
Removing several categories of cattle hides, skins, and leather products including raw bovine hides and skins, tanned or crust bovine hides and skins without hair and further prepared leather (Harmonized System (HS) codes ex 4101, 4104, 4107), as well as retreaded tyres, particularly relevant for the automotive and transport sector;
Clarifying that waste, used, and second‑hand products fall outside the scope of the EUDR;
Exempting product samples and products used for examination, analysis, or testing; and
Excluding items and correspondence entirely from the EUDR’s scope.
At the same time, the draft Delegated Act also proposes to extend the product scope, most notably to soluble coffee, palm oil derivatives (for example, soap made with palm oil), and frozen cattle tongues.
These proposed changes to the product scope likely affect a variety of industries, including the automotive and transport industry, the fashion industry, the consumer good and retail sector as well as the chemical industry.
Clarifying extent of due diligence obligations of upstream operators
To specify the extent of the obligation of upstream operators to exercise due diligence with respect to the compliance of relevant products with the national law, the Commission plans to establish a repository of relevant legislation on a dedicated website by December 2026. Countries of production will be able to contribute lists of their applicable legislation. Similarly, the Commission intends to establish a web‑based repository of certification schemes applicable to EUDR‑relevant commodities. With these measures, the Commission addresses two of the major challenges companies were facing when implementing the EUDR.
While the updated guidance document elaborates on simplified due diligence obligations for commodities and products originating from low-risk countries, the simplification package does not introduce a “no‑risk” or “negligible‑risk” country classification that would fully exempt operators from their obligations.
Downstream supply chain obligations
The Commission further clarifies that first downstream operators or traders are not required to actively request reference numbers or declaration identifiers. Instead, they can rely on upstream operators to pass on reference numbers or declaration identifiers.
It also clarifies that re‑importing products qualifies as a downstream activity. This means that importers who can demonstrate that a product has previously been placed on the EU market will also benefit from the reduced due diligence obligations for downstream entities.
Downstream entities would, however, remain obligated to inform the competent authorities where they have information indicating non-compliance with the EUDR. The guidance documents provide practical direction on how downstream actors can verify the exercise of required due diligence by upstream actors where substantiated concerns arise. This includes checking the validity of reference numbers and declaration identifiers, consulting additional sources (e.g., benchmarking or publicly available reports), or requesting further information from their suppliers.
Information system
The Commission intends to relaunch the information system, to which due diligence statements must be submitted, in June 2026. Subsequent updates introducing additional functionalities are scheduled for later in the summer, ahead of the EUDR’s application. These updates will reflect the legislative changes made to the EUDR, allowing for the registration of micro and small primary operators, downstream operators, and traders, as well as for the submission of simplified declarations.
Next steps
Against this background, companies should:
Continue to prepare for compliance with the EUDR by 30 December 2026 (large and medium-sized companies) or 30 June 2027 (small and micro-sized companies);
Re-evaluate their scoping exercise to determine which products continue to be covered products by the EUDR;
Monitor the ongoing legislative process with respect to the delegated act and consider providing feedback to the Commission until 1 June 2026; and Review and adapt their compliance system to the applicable due diligence obligations. Baker McKenzie
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May 07, 2026
Energy shock and conflict tighten global palm oil supply
Rising geopolitical tensions between the US and Iran are sending shockwaves through global commodity markets, triggering an energy-driven supply squeeze that is rapidly reshaping the outlook for palm oil.
At the heart of the disruption are threats to key maritime routes, particularly the Strait of Hormuz and the Red Sea. These critical arteries for global energy and commodity trade have come under increasing strain, pushing fuel prices sharply higher. Over the past month alone, gasoil prices have surged by 86%, while crude oil has climbed 31%.
This energy shock is now feeding directly into vegetable oil markets, with palm oil emerging as one of the biggest beneficiaries.
Palm oil gains as biofuel economics shift
Palm oil prices have rallied strongly in recent weeks, underpinned by their growing link to the energy complex.
Since the escalation of the West Asia conflict on Feb 28, crude palm oil futures on Bursa Malaysia had risen 11% as at April 17, while physical prices in Europe were up 10%. Soybean oil also strengthened, gaining 12% in the US and 4% in Argentina over the same period.
However, other major vegetable oils such as sunflower and rapeseed showed modest gains, reflecting weaker policy support and less direct exposure to biofuel demand.
The key driver is the sharp narrowing in the palm oil-gasoil (POGO) spread, which tightened by 79% — from US$310 per tonne on Feb 23 to US$24 per tonne on April 17. As gasoil prices outpace palm oil, the economics of biodiesel production have improved significantly, making palm oil a more attractive feedstock.
US biofuel policy adds further support
Policy developments in the US are reinforcing these market dynamics. On March 26, the Environmental Protection Agency issued its final rule setting renewable volume obligations under the Renewable Fuel Standard (RFS) for 2026 and 2027. The agency confirmed higher blending targets than those proposed in June last year, despite rising consumer fuel prices linked to ongoing geopolitical tensions, including the Iran conflict.
The RFS remains a key driver of demand for clean fuels, requiring refiners to either blend specified volumes of biofuels or purchase compliance credits — known as Renewable Identification Numbers — based on their gasoline and diesel output.
Higher US biofuel mandates are expected to increase demand for domestically produced feedstocks such as soybean oil, tightening global vegetable oil supplies. This, in turn, is likely to trigger substitution effects across the wider oils and fats complex, lending additional upward support to crude palm oil prices.
A strategic commodity beyond food
Palm oil, the world’s most widely consumed vegetable oil, plays a dual role in global markets. It is a staple ingredient in food products as well as a key input in consumer goods.
Increasingly, however, it is also an energy commodity. Indonesia has expanded biodiesel blending mandates over the past decade, tying palm oil demand more closely to fuel markets. This dual function means that geopolitical shocks — especially those affecting oil prices — can have immediate and far-reaching effects on palm oil supply and demand.
Southeast Asia prioritises energy security
Governments across Southeast Asia are accelerating efforts to secure domestic energy supply, with biodiesel policies playing a central role in reshaping palm oil demand.
Indonesia is preparing to implement a B50 biodiesel mandate in July, initially targeting the public service obligation (subsidised diesel) segment. This phase alone could absorb an additional 1.5 million tonnes of palm oil annually. The non-subsidised segment is expected to adopt B50 by 2028. Once fully implemented, total biodiesel consumption could reach 15 million to 16 million tonnes, significantly tightening exportable supply.
Thailand has adopted a more immediate intervention. Since April 7, exports of crude palm oil require government approval, with controls expected to remain in place for up to one year. The measures are complemented by B20 blending under its biodiesel subsidy programme. Although Thailand is a relatively small exporter, the policy underscores a broader regional shift — energy security is increasingly taking precedence over export expansion.
Malaysia is also advancing its biodiesel strategy, with plans to raise the mandate from B10 to B15, beginning with B12 — a level that can be supported by existing infrastructure without major upgrades. Malaysia has maintained its B10 mandate since 2019, largely due to historically high crude palm oil prices, but there is considerable scope for expansion given installed biodiesel capacity of 2.4 million tonnes and utilisation rates below 50%. The policy supports domestic palm oil demand while reinforcing the government’s longer-term commitment to biodiesel expansion and enhances energy security by reducing dependence on imported diesel, particularly as domestic fuel prices have surged by nearly 90% — from RM3.15/litre on Feb 27 to RM5.97/litre on April 17 amid escalating tensions in West Asia. A transition toward B15 represents a strategic response to global fuel market volatility, with limited impact on retail fuel prices, while potentially reducing reliance on imported diesel by about 5% and providing a more stable and predictable source of domestic demand.
The overall impact on palm oil supply and demand will depend on the pace of implementation. Between 2020 and 2025, Malaysia’s biodiesel production averaged 1.05 million tonnes, with exports at around 300,000 tonnes, implying domestic consumption of about 700,000 tonnes annually under the B10 mandate.
A shift to B12 would increase domestic usage by an estimated 140,000 tonnes, while a move to B15 would require an additional 300,000 tonnes. Even under B15, biodiesel consumption would account for only 4% to 5% of Malaysia’s total palm oil production, suggesting a relatively modest impact on export availability.
From a price perspective, palm oil markets remain supported by elevated crude oil prices and stronger biodiesel demand, underpinned by a favourable POGO spread. Across major producing countries, rising domestic consumption is gradually tightening exportable supply.
Rising geopolitical tensions between the US and Iran are sending shockwaves through global commodity markets, triggering an energy-driven supply squeeze that is rapidly reshaping the outlook for palm oil.
At the heart of the disruption are threats to key maritime routes, particularly the Strait of Hormuz and the Red Sea. These critical arteries for global energy and commodity trade have come under increasing strain, pushing fuel prices sharply higher. Over the past month alone, gasoil prices have surged by 86%, while crude oil has climbed 31%.
This energy shock is now feeding directly into vegetable oil markets, with palm oil emerging as one of the biggest beneficiaries.
Palm oil gains as biofuel economics shift
Palm oil prices have rallied strongly in recent weeks, underpinned by their growing link to the energy complex.
Since the escalation of the West Asia conflict on Feb 28, crude palm oil futures on Bursa Malaysia had risen 11% as at April 17, while physical prices in Europe were up 10%. Soybean oil also strengthened, gaining 12% in the US and 4% in Argentina over the same period.
However, other major vegetable oils such as sunflower and rapeseed showed modest gains, reflecting weaker policy support and less direct exposure to biofuel demand.
The key driver is the sharp narrowing in the palm oil-gasoil (POGO) spread, which tightened by 79% — from US$310 per tonne on Feb 23 to US$24 per tonne on April 17. As gasoil prices outpace palm oil, the economics of biodiesel production have improved significantly, making palm oil a more attractive feedstock.
US biofuel policy adds further support
Policy developments in the US are reinforcing these market dynamics. On March 26, the Environmental Protection Agency issued its final rule setting renewable volume obligations under the Renewable Fuel Standard (RFS) for 2026 and 2027. The agency confirmed higher blending targets than those proposed in June last year, despite rising consumer fuel prices linked to ongoing geopolitical tensions, including the Iran conflict.
The RFS remains a key driver of demand for clean fuels, requiring refiners to either blend specified volumes of biofuels or purchase compliance credits — known as Renewable Identification Numbers — based on their gasoline and diesel output.
Higher US biofuel mandates are expected to increase demand for domestically produced feedstocks such as soybean oil, tightening global vegetable oil supplies. This, in turn, is likely to trigger substitution effects across the wider oils and fats complex, lending additional upward support to crude palm oil prices.
A strategic commodity beyond food
Palm oil, the world’s most widely consumed vegetable oil, plays a dual role in global markets. It is a staple ingredient in food products as well as a key input in consumer goods.
Increasingly, however, it is also an energy commodity. Indonesia has expanded biodiesel blending mandates over the past decade, tying palm oil demand more closely to fuel markets. This dual function means that geopolitical shocks — especially those affecting oil prices — can have immediate and far-reaching effects on palm oil supply and demand.
Southeast Asia prioritises energy security
Governments across Southeast Asia are accelerating efforts to secure domestic energy supply, with biodiesel policies playing a central role in reshaping palm oil demand.
Indonesia is preparing to implement a B50 biodiesel mandate in July, initially targeting the public service obligation (subsidised diesel) segment. This phase alone could absorb an additional 1.5 million tonnes of palm oil annually. The non-subsidised segment is expected to adopt B50 by 2028. Once fully implemented, total biodiesel consumption could reach 15 million to 16 million tonnes, significantly tightening exportable supply.
Thailand has adopted a more immediate intervention. Since April 7, exports of crude palm oil require government approval, with controls expected to remain in place for up to one year. The measures are complemented by B20 blending under its biodiesel subsidy programme. Although Thailand is a relatively small exporter, the policy underscores a broader regional shift — energy security is increasingly taking precedence over export expansion.
Malaysia is also advancing its biodiesel strategy, with plans to raise the mandate from B10 to B15, beginning with B12 — a level that can be supported by existing infrastructure without major upgrades. Malaysia has maintained its B10 mandate since 2019, largely due to historically high crude palm oil prices, but there is considerable scope for expansion given installed biodiesel capacity of 2.4 million tonnes and utilisation rates below 50%. The policy supports domestic palm oil demand while reinforcing the government’s longer-term commitment to biodiesel expansion and enhances energy security by reducing dependence on imported diesel, particularly as domestic fuel prices have surged by nearly 90% — from RM3.15/litre on Feb 27 to RM5.97/litre on April 17 amid escalating tensions in West Asia. A transition toward B15 represents a strategic response to global fuel market volatility, with limited impact on retail fuel prices, while potentially reducing reliance on imported diesel by about 5% and providing a more stable and predictable source of domestic demand.
The overall impact on palm oil supply and demand will depend on the pace of implementation. Between 2020 and 2025, Malaysia’s biodiesel production averaged 1.05 million tonnes, with exports at around 300,000 tonnes, implying domestic consumption of about 700,000 tonnes annually under the B10 mandate.
A shift to B12 would increase domestic usage by an estimated 140,000 tonnes, while a move to B15 would require an additional 300,000 tonnes. Even under B15, biodiesel consumption would account for only 4% to 5% of Malaysia’s total palm oil production, suggesting a relatively modest impact on export availability.
From a price perspective, palm oil markets remain supported by elevated crude oil prices and stronger biodiesel demand, underpinned by a favourable POGO spread. Across major producing countries, rising domestic consumption is gradually tightening exportable supply. The Edge
---------
Palm oil rally seen continuing on biodiesel demand boost, analyst Mistry says
By Rajendra Jadhav
MUMBAI, May 6 (Reuters) - Malaysian palm oil prices are likely to rise about 12% to 5,200 ringgit ($1,316) a metric ton by mid-July, as higher energy prices from the U.S.-Israeli war on Iran boost biodiesel demand and tighten supplies, analyst Dorab Mistry said on Wednesday.
The benchmark palm oil contract on the Bursa Malaysia Derivatives Exchange fell 1.34% to 4,647 ringgit at the midday break on Wednesday, though it is up about 15% since the war began in late February.
Palm oil futures are expected to extend gains to around 5,000 ringgit by June and potentially reach 5,200 ringgit by mid-July on biodiesel demand, said Mistry, the director of Indian consumer goods company Godrej International.
One of the most closely watched analysts of edible oils, Mistry's forecasts for supply and prices often move markets.
Global oil prices hit a four-year high of more than $126 a barrel last week. This rally has made the use of vegetable oils for biofuel production more attractive.
Refined fuels like diesel and gasoline rose more sharply than crude after the Iran war began, Mistry said
As a result, the spread between fossil diesel and palm biodiesel narrowed, cutting subsidy requirements and - in some markets - making palm biodiesel cheaper than fossil diesel, he said.
"Rising energy prices prompted Indonesia to reinstate its B50 palm biodiesel programme from 1 July 2026," Mistry said. "Biodiesel mandates are being increased in other countries like Malaysia, Thailand and others too."
Indonesia, the world's biggest palm oil producer, said it would raise the mandatory blending rate for palm-based biodiesel to 50% from 40% on July 1.
Palm oil competes with soyoil, which has rallied in recent weeks as top producers - the U.S., Brazil and Argentina - increase its use for biofuels.
"The U.S. has announced its long-awaited jumbo biodiesel programme for 2026 and 2027, which has, as expected, lit a fuse under soybean oil futures," Mistry said.
Higher edible oil prices are leading to demand destruction in key consuming countries like India, where stocks have fallen and imports will need to be stepped up from June, he said.
https://www.reuters.com/sustainability/climate-energy/palm-oil-rally-seen-continuing-biodiesel-demand-boost-analyst-mistry-says-2026-05-06/#:~:text=Palm%20oil%20futures,began%2C%20Mistry%20said
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Palm Oil Prices Set to Surge Amid Escalating Global Tensions
Malaysian palm oil prices are projected to climb by 12% due to increased biodiesel demand triggered by higher energy prices amid geopolitical tensions. Analyst Dorab Mistry forecasts a rise to 5,200 ringgit per metric ton by mid-July, with the rally bolstered by new biodiesel mandates in key producing countries.
Amid escalating geopolitical tensions, Malaysian palm oil prices are predicted to surge by approximately 12%, reaching 5,200 ringgit per metric ton by mid-July. This anticipated increase is largely attributed to heightened demand for biodiesel, driven by rising energy prices stemming from the U.S.-Israeli conflict with Iran.
The benchmark palm oil contract on the Bursa Malaysia Derivatives Exchange saw a decline of 1.34% to 4,647 ringgit on Wednesday; however, it has gained about 15% since the onset of hostilities in late February. According to Dorab Mistry, director of Indian consumer goods company Godrej International, this upward trend is expected to continue, potentially reaching 5,200 ringgit fueled by robust biodiesel demand.
Global oil prices recently soared to a four-year peak, exceeding $126 a barrel, making the biofuel industry increasingly attractive. The narrowing price differential between fossil diesel and palm biodiesel has resulted in reduced subsidy needs, and in some markets, palm biodiesel has even become cheaper than its fossil fuel counterpart. Consequently, major palm oil producers are revamping their biodiesel programs to boost demand and support market growth. Devdiscourse
---------
European Commission Releases New EU Deforestation Regulation Measures
Posted on May 7, 2026
Posted in Environmental Regulation, Environmental, Social, and Governance, European Environmental and Public Law
The measures include a new delegated act on scope, updated FAQs, and an updated guidance document.
By Michael D. Green and James Bee
The measures include: (1) a simplification review report; (2) updated FAQs and an updated guidance document; (3) a draft delegated act on the product scope (published for a four-week public feedback period); and (4) updates to the Information System by way of a draft implementing act.
In this blog post, we set out the background and status of the EUDR, and summarise elements of the measures. Global ELR
---------
European Commission’s proposed regulatory update would phase out use of soybean-based biofuels
The European Commission in April adopted a delegated regulation to update the methodology and data for high indirect land use change (ILUC) risk biofuels. The change, if adopted by the European Council and European Parliament, is expected to phase out the use of soybean oil as a biofuel feedstock in the European Union by 2030, according to a report filed with the USDA Foreign Agricultural Service’s Global Agricultural Information Network.
The EU Renewable Energy Directive II introduced specific rules for high-risk ILUC biofuels. Under current rules, the Commission defines high ILUC-risk feedstock as feedstock for which the share of expansion into land with high-carbon stocks is higher than 10% since 2008, with an annual expansion of more than 1%. Only palm oil qualifies as a high ILUC-risk feedstock under that calculation.
The delegated regulation adopted by the European Commission on April 10 proposes to amend the methodology by which high-risk ILUC feedstocks are measured. It also proposes to use 2014 data, as opposed to the current 2008 data.
Under the proposed calculations, both palm oil and soybean would surpass the threshold for high ILUC-risk feedstocks. Biomass Magazine
Energy shock and conflict tighten global palm oil supply
Rising geopolitical tensions between the US and Iran are sending shockwaves through global commodity markets, triggering an energy-driven supply squeeze that is rapidly reshaping the outlook for palm oil.
At the heart of the disruption are threats to key maritime routes, particularly the Strait of Hormuz and the Red Sea. These critical arteries for global energy and commodity trade have come under increasing strain, pushing fuel prices sharply higher. Over the past month alone, gasoil prices have surged by 86%, while crude oil has climbed 31%.
This energy shock is now feeding directly into vegetable oil markets, with palm oil emerging as one of the biggest beneficiaries.
Palm oil gains as biofuel economics shift
Palm oil prices have rallied strongly in recent weeks, underpinned by their growing link to the energy complex.
Since the escalation of the West Asia conflict on Feb 28, crude palm oil futures on Bursa Malaysia had risen 11% as at April 17, while physical prices in Europe were up 10%. Soybean oil also strengthened, gaining 12% in the US and 4% in Argentina over the same period.
However, other major vegetable oils such as sunflower and rapeseed showed modest gains, reflecting weaker policy support and less direct exposure to biofuel demand.
The key driver is the sharp narrowing in the palm oil-gasoil (POGO) spread, which tightened by 79% — from US$310 per tonne on Feb 23 to US$24 per tonne on April 17. As gasoil prices outpace palm oil, the economics of biodiesel production have improved significantly, making palm oil a more attractive feedstock.
US biofuel policy adds further support
Policy developments in the US are reinforcing these market dynamics. On March 26, the Environmental Protection Agency issued its final rule setting renewable volume obligations under the Renewable Fuel Standard (RFS) for 2026 and 2027. The agency confirmed higher blending targets than those proposed in June last year, despite rising consumer fuel prices linked to ongoing geopolitical tensions, including the Iran conflict.
The RFS remains a key driver of demand for clean fuels, requiring refiners to either blend specified volumes of biofuels or purchase compliance credits — known as Renewable Identification Numbers — based on their gasoline and diesel output.
Higher US biofuel mandates are expected to increase demand for domestically produced feedstocks such as soybean oil, tightening global vegetable oil supplies. This, in turn, is likely to trigger substitution effects across the wider oils and fats complex, lending additional upward support to crude palm oil prices.
A strategic commodity beyond food
Palm oil, the world’s most widely consumed vegetable oil, plays a dual role in global markets. It is a staple ingredient in food products as well as a key input in consumer goods.
Increasingly, however, it is also an energy commodity. Indonesia has expanded biodiesel blending mandates over the past decade, tying palm oil demand more closely to fuel markets. This dual function means that geopolitical shocks — especially those affecting oil prices — can have immediate and far-reaching effects on palm oil supply and demand.
Southeast Asia prioritises energy security
Governments across Southeast Asia are accelerating efforts to secure domestic energy supply, with biodiesel policies playing a central role in reshaping palm oil demand.
Indonesia is preparing to implement a B50 biodiesel mandate in July, initially targeting the public service obligation (subsidised diesel) segment. This phase alone could absorb an additional 1.5 million tonnes of palm oil annually. The non-subsidised segment is expected to adopt B50 by 2028. Once fully implemented, total biodiesel consumption could reach 15 million to 16 million tonnes, significantly tightening exportable supply.
Thailand has adopted a more immediate intervention. Since April 7, exports of crude palm oil require government approval, with controls expected to remain in place for up to one year. The measures are complemented by B20 blending under its biodiesel subsidy programme. Although Thailand is a relatively small exporter, the policy underscores a broader regional shift — energy security is increasingly taking precedence over export expansion.
Malaysia is also advancing its biodiesel strategy, with plans to raise the mandate from B10 to B15, beginning with B12 — a level that can be supported by existing infrastructure without major upgrades. Malaysia has maintained its B10 mandate since 2019, largely due to historically high crude palm oil prices, but there is considerable scope for expansion given installed biodiesel capacity of 2.4 million tonnes and utilisation rates below 50%. The policy supports domestic palm oil demand while reinforcing the government’s longer-term commitment to biodiesel expansion and enhances energy security by reducing dependence on imported diesel, particularly as domestic fuel prices have surged by nearly 90% — from RM3.15/litre on Feb 27 to RM5.97/litre on April 17 amid escalating tensions in West Asia. A transition toward B15 represents a strategic response to global fuel market volatility, with limited impact on retail fuel prices, while potentially reducing reliance on imported diesel by about 5% and providing a more stable and predictable source of domestic demand.
The overall impact on palm oil supply and demand will depend on the pace of implementation. Between 2020 and 2025, Malaysia’s biodiesel production averaged 1.05 million tonnes, with exports at around 300,000 tonnes, implying domestic consumption of about 700,000 tonnes annually under the B10 mandate.
A shift to B12 would increase domestic usage by an estimated 140,000 tonnes, while a move to B15 would require an additional 300,000 tonnes. Even under B15, biodiesel consumption would account for only 4% to 5% of Malaysia’s total palm oil production, suggesting a relatively modest impact on export availability.
From a price perspective, palm oil markets remain supported by elevated crude oil prices and stronger biodiesel demand, underpinned by a favourable POGO spread. Across major producing countries, rising domestic consumption is gradually tightening exportable supply.
Rising geopolitical tensions between the US and Iran are sending shockwaves through global commodity markets, triggering an energy-driven supply squeeze that is rapidly reshaping the outlook for palm oil.
At the heart of the disruption are threats to key maritime routes, particularly the Strait of Hormuz and the Red Sea. These critical arteries for global energy and commodity trade have come under increasing strain, pushing fuel prices sharply higher. Over the past month alone, gasoil prices have surged by 86%, while crude oil has climbed 31%.
This energy shock is now feeding directly into vegetable oil markets, with palm oil emerging as one of the biggest beneficiaries.
Palm oil gains as biofuel economics shift
Palm oil prices have rallied strongly in recent weeks, underpinned by their growing link to the energy complex.
Since the escalation of the West Asia conflict on Feb 28, crude palm oil futures on Bursa Malaysia had risen 11% as at April 17, while physical prices in Europe were up 10%. Soybean oil also strengthened, gaining 12% in the US and 4% in Argentina over the same period.
However, other major vegetable oils such as sunflower and rapeseed showed modest gains, reflecting weaker policy support and less direct exposure to biofuel demand.
The key driver is the sharp narrowing in the palm oil-gasoil (POGO) spread, which tightened by 79% — from US$310 per tonne on Feb 23 to US$24 per tonne on April 17. As gasoil prices outpace palm oil, the economics of biodiesel production have improved significantly, making palm oil a more attractive feedstock.
US biofuel policy adds further support
Policy developments in the US are reinforcing these market dynamics. On March 26, the Environmental Protection Agency issued its final rule setting renewable volume obligations under the Renewable Fuel Standard (RFS) for 2026 and 2027. The agency confirmed higher blending targets than those proposed in June last year, despite rising consumer fuel prices linked to ongoing geopolitical tensions, including the Iran conflict.
The RFS remains a key driver of demand for clean fuels, requiring refiners to either blend specified volumes of biofuels or purchase compliance credits — known as Renewable Identification Numbers — based on their gasoline and diesel output.
Higher US biofuel mandates are expected to increase demand for domestically produced feedstocks such as soybean oil, tightening global vegetable oil supplies. This, in turn, is likely to trigger substitution effects across the wider oils and fats complex, lending additional upward support to crude palm oil prices.
A strategic commodity beyond food
Palm oil, the world’s most widely consumed vegetable oil, plays a dual role in global markets. It is a staple ingredient in food products as well as a key input in consumer goods.
Increasingly, however, it is also an energy commodity. Indonesia has expanded biodiesel blending mandates over the past decade, tying palm oil demand more closely to fuel markets. This dual function means that geopolitical shocks — especially those affecting oil prices — can have immediate and far-reaching effects on palm oil supply and demand.
Southeast Asia prioritises energy security
Governments across Southeast Asia are accelerating efforts to secure domestic energy supply, with biodiesel policies playing a central role in reshaping palm oil demand.
Indonesia is preparing to implement a B50 biodiesel mandate in July, initially targeting the public service obligation (subsidised diesel) segment. This phase alone could absorb an additional 1.5 million tonnes of palm oil annually. The non-subsidised segment is expected to adopt B50 by 2028. Once fully implemented, total biodiesel consumption could reach 15 million to 16 million tonnes, significantly tightening exportable supply.
Thailand has adopted a more immediate intervention. Since April 7, exports of crude palm oil require government approval, with controls expected to remain in place for up to one year. The measures are complemented by B20 blending under its biodiesel subsidy programme. Although Thailand is a relatively small exporter, the policy underscores a broader regional shift — energy security is increasingly taking precedence over export expansion.
Malaysia is also advancing its biodiesel strategy, with plans to raise the mandate from B10 to B15, beginning with B12 — a level that can be supported by existing infrastructure without major upgrades. Malaysia has maintained its B10 mandate since 2019, largely due to historically high crude palm oil prices, but there is considerable scope for expansion given installed biodiesel capacity of 2.4 million tonnes and utilisation rates below 50%. The policy supports domestic palm oil demand while reinforcing the government’s longer-term commitment to biodiesel expansion and enhances energy security by reducing dependence on imported diesel, particularly as domestic fuel prices have surged by nearly 90% — from RM3.15/litre on Feb 27 to RM5.97/litre on April 17 amid escalating tensions in West Asia. A transition toward B15 represents a strategic response to global fuel market volatility, with limited impact on retail fuel prices, while potentially reducing reliance on imported diesel by about 5% and providing a more stable and predictable source of domestic demand.
The overall impact on palm oil supply and demand will depend on the pace of implementation. Between 2020 and 2025, Malaysia’s biodiesel production averaged 1.05 million tonnes, with exports at around 300,000 tonnes, implying domestic consumption of about 700,000 tonnes annually under the B10 mandate.
A shift to B12 would increase domestic usage by an estimated 140,000 tonnes, while a move to B15 would require an additional 300,000 tonnes. Even under B15, biodiesel consumption would account for only 4% to 5% of Malaysia’s total palm oil production, suggesting a relatively modest impact on export availability.
From a price perspective, palm oil markets remain supported by elevated crude oil prices and stronger biodiesel demand, underpinned by a favourable POGO spread. Across major producing countries, rising domestic consumption is gradually tightening exportable supply. The Edge
---------
Palm oil rally seen continuing on biodiesel demand boost, analyst Mistry says
By Rajendra Jadhav
MUMBAI, May 6 (Reuters) - Malaysian palm oil prices are likely to rise about 12% to 5,200 ringgit ($1,316) a metric ton by mid-July, as higher energy prices from the U.S.-Israeli war on Iran boost biodiesel demand and tighten supplies, analyst Dorab Mistry said on Wednesday.
The benchmark palm oil contract on the Bursa Malaysia Derivatives Exchange fell 1.34% to 4,647 ringgit at the midday break on Wednesday, though it is up about 15% since the war began in late February.
Palm oil futures are expected to extend gains to around 5,000 ringgit by June and potentially reach 5,200 ringgit by mid-July on biodiesel demand, said Mistry, the director of Indian consumer goods company Godrej International.
One of the most closely watched analysts of edible oils, Mistry's forecasts for supply and prices often move markets.
Global oil prices hit a four-year high of more than $126 a barrel last week. This rally has made the use of vegetable oils for biofuel production more attractive.
Refined fuels like diesel and gasoline rose more sharply than crude after the Iran war began, Mistry said
As a result, the spread between fossil diesel and palm biodiesel narrowed, cutting subsidy requirements and - in some markets - making palm biodiesel cheaper than fossil diesel, he said.
"Rising energy prices prompted Indonesia to reinstate its B50 palm biodiesel programme from 1 July 2026," Mistry said. "Biodiesel mandates are being increased in other countries like Malaysia, Thailand and others too."
Indonesia, the world's biggest palm oil producer, said it would raise the mandatory blending rate for palm-based biodiesel to 50% from 40% on July 1.
Palm oil competes with soyoil, which has rallied in recent weeks as top producers - the U.S., Brazil and Argentina - increase its use for biofuels.
"The U.S. has announced its long-awaited jumbo biodiesel programme for 2026 and 2027, which has, as expected, lit a fuse under soybean oil futures," Mistry said.
Higher edible oil prices are leading to demand destruction in key consuming countries like India, where stocks have fallen and imports will need to be stepped up from June, he said.
https://www.reuters.com/sustainability/climate-energy/palm-oil-rally-seen-continuing-biodiesel-demand-boost-analyst-mistry-says-2026-05-06/#:~:text=Palm%20oil%20futures,began%2C%20Mistry%20said
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Palm Oil Prices Set to Surge Amid Escalating Global Tensions
Malaysian palm oil prices are projected to climb by 12% due to increased biodiesel demand triggered by higher energy prices amid geopolitical tensions. Analyst Dorab Mistry forecasts a rise to 5,200 ringgit per metric ton by mid-July, with the rally bolstered by new biodiesel mandates in key producing countries.
Amid escalating geopolitical tensions, Malaysian palm oil prices are predicted to surge by approximately 12%, reaching 5,200 ringgit per metric ton by mid-July. This anticipated increase is largely attributed to heightened demand for biodiesel, driven by rising energy prices stemming from the U.S.-Israeli conflict with Iran.
The benchmark palm oil contract on the Bursa Malaysia Derivatives Exchange saw a decline of 1.34% to 4,647 ringgit on Wednesday; however, it has gained about 15% since the onset of hostilities in late February. According to Dorab Mistry, director of Indian consumer goods company Godrej International, this upward trend is expected to continue, potentially reaching 5,200 ringgit fueled by robust biodiesel demand.
Global oil prices recently soared to a four-year peak, exceeding $126 a barrel, making the biofuel industry increasingly attractive. The narrowing price differential between fossil diesel and palm biodiesel has resulted in reduced subsidy needs, and in some markets, palm biodiesel has even become cheaper than its fossil fuel counterpart. Consequently, major palm oil producers are revamping their biodiesel programs to boost demand and support market growth. Devdiscourse
---------
European Commission Releases New EU Deforestation Regulation Measures
Posted on May 7, 2026
Posted in Environmental Regulation, Environmental, Social, and Governance, European Environmental and Public Law
The measures include a new delegated act on scope, updated FAQs, and an updated guidance document.
By Michael D. Green and James Bee
- The Commission has unveiled a package of EUDR measures aimed at providing guidance and easing implementation.
- The delegated act will adjust the range of commodities and products falling within the EUDR’s scope.
- The Commission has confirmed that it will not reopen the text of the EUDR, so companies should continue preparing for the 30 December 2026 application date (or 30 June 2027 for micro and small operators).
The measures include: (1) a simplification review report; (2) updated FAQs and an updated guidance document; (3) a draft delegated act on the product scope (published for a four-week public feedback period); and (4) updates to the Information System by way of a draft implementing act.
In this blog post, we set out the background and status of the EUDR, and summarise elements of the measures. Global ELR
---------
European Commission’s proposed regulatory update would phase out use of soybean-based biofuels
The European Commission in April adopted a delegated regulation to update the methodology and data for high indirect land use change (ILUC) risk biofuels. The change, if adopted by the European Council and European Parliament, is expected to phase out the use of soybean oil as a biofuel feedstock in the European Union by 2030, according to a report filed with the USDA Foreign Agricultural Service’s Global Agricultural Information Network.
The EU Renewable Energy Directive II introduced specific rules for high-risk ILUC biofuels. Under current rules, the Commission defines high ILUC-risk feedstock as feedstock for which the share of expansion into land with high-carbon stocks is higher than 10% since 2008, with an annual expansion of more than 1%. Only palm oil qualifies as a high ILUC-risk feedstock under that calculation.
The delegated regulation adopted by the European Commission on April 10 proposes to amend the methodology by which high-risk ILUC feedstocks are measured. It also proposes to use 2014 data, as opposed to the current 2008 data.
Under the proposed calculations, both palm oil and soybean would surpass the threshold for high ILUC-risk feedstocks. Biomass Magazine
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May 05, 2026
Asean’s biodiesel push fuels palm oil rally, but will SGX-listed players gain?
Higher crude palm oil prices support upstream plantation earnings, but could be a double-edged sword for integrated operators: analysts
[SINGAPORE] A crude oil supply shortfall from the prolonged closure of the Strait of Hormuz has accelerated biodiesel mandates in South-east Asia, driving up crude palm oil (CPO) prices and lifting Singapore Exchange-listed plantation stocks.
Biodiesel – a substitute for petroleum-based diesel fuel produced by reacting vegetable oil or animal fat with alcohol – is becoming more cost-competitive.
Following the US-Iran war, CPO’s premium to gas oil has narrowed to around US$14 a tonne, from an average of around US$271 a tonne over the past year.
In Indonesia, the price of B50 – the blend of 50 per cent palm oil-based fuel with diesel – is now around 13,000 rupiah (S$0.96) a litre, compared to diesel at 17,800 rupiah a litre.
The country’s biodiesel mandate has scaled from B20 in 2016 to B40 in 2025. Although Indonesia’s B50 mandate was postponed in early 2026 due to capacity constraints, the government has accelerated its roll-out to Jul 1, subject to the completion of technical tests and infrastructure readiness.
Under this mandate, Indonesia’s diesel usage will be a 50-50 mix of palm oil-based fuel and diesel from 2028, making it the highest mandatory biodiesel blend rate globally.
Meanwhile, Malaysia announced in mid-April that it would gradually raise its biodiesel mandate from B10 to B15. This comes as the country aims to reduce reliance on imported fossil fuels and safeguard its domestic diesel supply.
Similarly, Thailand’s government has implemented a subsidy for B20, keeping it cheaper than unblended diesel.
Analysts expect CPO prices to be supported by a supply deficit amid the Middle East conflict and the prospect of El Nino, which could curb rainfall in South-east Asia. Business Times
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Indonesia’s Palm Oil Exports Tumble 35.08% YOY
Jakarta. Indonesia’s palm oil exports tumbled 35.08% year-on-year (yoy) in March, marking a slowdown despite the world’s largest supplier’s consistency in notching double-digit increases.
The Central Statistics Agency (BPS) reported that palm oil products remained a key contributor to Indonesia’s trade balance, enabling the country to register 71 consecutive months of surplus since May 2020. However, exports of crude palm oil (CPO) and its derivative products had severely weakened in March, a time when the ongoing Iran war had only just begun. The agency did not say why overseas shipments of the commodity found in nearly everything had slumped.
“Our exports of CPO and its derivatives amounted to $1.42 billion and weighed 1.31 million tons in March 2026. This indicates a 35.08% yoy drop from a value standpoint,” Ateng Hartono, a deputy at BPS, told a press conference in Jakarta on Monday.
The quarterly shipments still saw increases, but only in single digits. Value-wise, the figure reached $6.11 billion in January-March 2026, up by around 3.56% compared to the same period the previous year, when exports totaled $5.90 billion. The Q1 2026 export volume only hit 5.85 million tons, up by around 9.30%. BPS did not disclose who the biggest buyers of Indonesian palm oil were, but China and India have been the traditional go-to markets.
Indonesia started 2026 strong as the value of its palm oil exports skyrocketed 59.63% year-on-year (yoy) in the first month. The January-February exports also rose 26.40%, value-wise.
Ateng told the same conference that palm oil prices in international markets “had been rising since the beginning of the year”. It hit $1,149.33 per metric ton in April, quite a jump from $980.12 a metric ton seen in December 2025. At home, Indonesian palm oil producers group Gapki had previously complained about the 50% hike in transport and logistics costs for exports following the Iran war. The clashes -- which triggered the blockade of the Strait of Hormuz -- forced seaborne shipments to look for alternative routes, hence longer voyages.
Indonesia is gearing up to increase the mandatory palm oil blend in its diesel from the current 40% to 50%, starting in July. The move -- aimed at easing the war-fueled fiscal pressures -- will likely see Indonesia allocate more of its palm oil to meet the growing domestic demand, unless it increases the existing production. Jakarta Globe
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Africa seeks sustainable reclaim of palm oil industry
While the oil palm is native to Africa, the continent currently imports nearly half of its palm oil consumption, primarily from Southeast Asia. As African nations seek to bridge this production gap to save foreign currency and ensure food security, experts warn against the massive deforestation seen in major producers such as Indonesia and Malaysia. In Africa, 70% of production comes from smallholder farmers whose yields average just 6 tons per hectare, compared to over 20 tons on commercial plantations. Africa shows strong potential to increase palm oil production, with governments and multinational companies increasingly looking to invest in the industry. However, this creates pressure to expand farmland, with the Congo Basin and Cameroon’s ancient rainforests particularly at risk. Meanwhile, experts are advocating for an alternative approach, with sustainable certification programs demonstrating that yields can be improved on existing farmland. Already, one Ghanaian smallholder cooperative boosted output to 21 tons per hectare. Unfortunately, certification costs remain prohibitive without external financial support. African Business
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EU removes leather from flagship anti-deforestation law
The European Commission has excluded imports of leather from its anti-deforestation simplification review package, with compliance costs for businesses expected to be reduced by up to 75%.
The European Union Deforestation Regulation (EUDR) mandates that products derived from beef, cocoa, coffee, palm oil, natural rubber, soy, or wood must be “deforestation-free” and legally produced to be placed on the EU market.
The burden of compliance, or explanation, lies with importing businesses, and deforestation occurring after 2020 is taken into account.
The regulation has now been delayed twice. It was originally meant to enter into force on December 30, 2024, for large businesses, and to expand to micro and small businesses a year later.
However, after a revision late last year, the dates have been moved to December 30, 2026, for large businesses and June 30, 2027, for small firms. The proposals were also delayed, with green groups expecting a revised publication to be published on 1 May. The Commission finally published the revisions on Monday, 4 May.
Publications include a report to the European Parliament and the Council, an updated guidance document and Frequently Asked Questions, and a draft delegated act on the product scope of the EUDR.
The Commission claims that changes will reduce annual compliance costs for companies subject to EUDR obligations by about 75%, compared to the first iteration of the directive. Edie
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Global Witness calls out 'scandalous' exclusion of leather in EU deforestation regulation (EUDR) review
Responding to the European Commission's publication of the EUDR package on Monday 4th of May, Beate Beller, senior EU campaigner for Global Witness, said:
“Caving to industry pressure by excluding leather from EU deforestation rules is nothing short of scandalous.
“Cattle products, including leather and hides, are major drivers of deforestation in EU supply chains - leaving them out will have catastrophic consequences for people and planet.
“The EU must play its part in tackling the global deforestation crisis, by protecting climate-critical forests such as the Amazon and the Gran Chaco.
“The EUDR has the tools, and now we must finally use them. The EU must deliver the deforestation law, and deliver it without compromise.”
The EU’s deforestation law “EUDR” seeks to combat climate change and biodiversity loss by ensuring that products sold in the EU are not sourced from deforested land and are not linked to human rights abuses. Commodities in scope including coffee, timber, palm oil, cattle, soy, rubber and cocoa, as well as products derived from them.
Approved in 2023, the EUDR has been delayed twice and is now expected to come into application by the end of this year. Further amendments to the law were enacted in December 2025, when EU co-legislators agreed on a further 'simplification package', which the EU Commission presented today.
In April 2026, Global Witness revealed that Italian tanneries controlled by the French luxury group, LVMH, had been seeking leather exemptions to the EUDR while importing hides linked to significant Paraguayan forest loss.
A previous analysis by Global Witness found that the EUDR could help save over 8 million hectares of forest over the next decade, an area approximately the size of Austria. Global Witness
---------
Palm oil: lessons for Nigeria from Malaysia
Malaysia’s secret, Nigeria must learn from
Malaysia’s palm oil boom has been defined by deliberate strategy and sustained momentum, driven by a mix of market coordination, policy clarity, and aggressive global positioning.
Before Malaysia’s palm oil boom, the golden red fruit thrived in Nigerian soil, perfuming kitchens and shaping household diets with a taste few could resist.
Over time, however, that same crop journeyed across continents to Southeast Asia, where it found new life in Malaysian plantations. Today, Malaysia stands as a global powerhouse in palm oil exports, while Nigeria, once a dominant force, increasingly looks outward to meet its needs.
Nigeria currently produces between 1.2 million and 1.5 million tonnes of palm oil, far below its estimated domestic demand of about 2.4 million tonnes. The shortfall is routinely bridged through imports from Malaysia and other producing nations. This reversal raises a pressing question. How did a country that once introduced oil palm to Malaysia become dependent on imported supply?
Historically, Nigeria’s position was formidable, because In 1965, when global palm oil demand stood at roughly 1.5 million tonnes, Nigeria accounted for about 43 percent of the market. Today, with global demand at about 14 million tonnes, the country holds just seven percent.
“Due to neglect and lack of strategic investment in the sector by successive governments, Nigeria’s production capacity has dwindled, adding that the country ranks fifth globally in palm oil production, lagging behind Indonesia, Malaysia, Thailand, and Colombia,” noted Alphonsus Inyang, president of the National Palm Produce Association of Nigeria.
Meanwhile, Malaysia’s industry continues to expand. For instance, in 2025, the country recorded its highest ever crude palm oil production at 20.28 million tonnes, a 4.9 percent increase from the previous year, according to the Malaysia Palm Oil Council (MPOC).
The shift in trade patterns is equally striking as sub-Saharan Africa has now overtaken South Asia and the Asia Pacific to become the largest importing region for Malaysian palm oil, exposing a widening opportunity gap for Nigerian investors.
According to the MPOC 2025 annual report, imports into sub-Saharan Africa rose by 11.9 percent to 4.12 million tonnes. Nigeria itself posted a notable increase, with imports climbing by 15.1 percent to 285,825 tonnes, driven by strong domestic consumption.
Kenya led the surge, emerging as the world’s second largest individual importer of Malaysian palm oil in 2025, with volumes reaching about 1.21 million tonnes. BusinessNG
Asean’s biodiesel push fuels palm oil rally, but will SGX-listed players gain?
Higher crude palm oil prices support upstream plantation earnings, but could be a double-edged sword for integrated operators: analysts
[SINGAPORE] A crude oil supply shortfall from the prolonged closure of the Strait of Hormuz has accelerated biodiesel mandates in South-east Asia, driving up crude palm oil (CPO) prices and lifting Singapore Exchange-listed plantation stocks.
Biodiesel – a substitute for petroleum-based diesel fuel produced by reacting vegetable oil or animal fat with alcohol – is becoming more cost-competitive.
Following the US-Iran war, CPO’s premium to gas oil has narrowed to around US$14 a tonne, from an average of around US$271 a tonne over the past year.
In Indonesia, the price of B50 – the blend of 50 per cent palm oil-based fuel with diesel – is now around 13,000 rupiah (S$0.96) a litre, compared to diesel at 17,800 rupiah a litre.
The country’s biodiesel mandate has scaled from B20 in 2016 to B40 in 2025. Although Indonesia’s B50 mandate was postponed in early 2026 due to capacity constraints, the government has accelerated its roll-out to Jul 1, subject to the completion of technical tests and infrastructure readiness.
Under this mandate, Indonesia’s diesel usage will be a 50-50 mix of palm oil-based fuel and diesel from 2028, making it the highest mandatory biodiesel blend rate globally.
Meanwhile, Malaysia announced in mid-April that it would gradually raise its biodiesel mandate from B10 to B15. This comes as the country aims to reduce reliance on imported fossil fuels and safeguard its domestic diesel supply.
Similarly, Thailand’s government has implemented a subsidy for B20, keeping it cheaper than unblended diesel.
Analysts expect CPO prices to be supported by a supply deficit amid the Middle East conflict and the prospect of El Nino, which could curb rainfall in South-east Asia. Business Times
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Indonesia’s Palm Oil Exports Tumble 35.08% YOY
Jakarta. Indonesia’s palm oil exports tumbled 35.08% year-on-year (yoy) in March, marking a slowdown despite the world’s largest supplier’s consistency in notching double-digit increases.
The Central Statistics Agency (BPS) reported that palm oil products remained a key contributor to Indonesia’s trade balance, enabling the country to register 71 consecutive months of surplus since May 2020. However, exports of crude palm oil (CPO) and its derivative products had severely weakened in March, a time when the ongoing Iran war had only just begun. The agency did not say why overseas shipments of the commodity found in nearly everything had slumped.
“Our exports of CPO and its derivatives amounted to $1.42 billion and weighed 1.31 million tons in March 2026. This indicates a 35.08% yoy drop from a value standpoint,” Ateng Hartono, a deputy at BPS, told a press conference in Jakarta on Monday.
The quarterly shipments still saw increases, but only in single digits. Value-wise, the figure reached $6.11 billion in January-March 2026, up by around 3.56% compared to the same period the previous year, when exports totaled $5.90 billion. The Q1 2026 export volume only hit 5.85 million tons, up by around 9.30%. BPS did not disclose who the biggest buyers of Indonesian palm oil were, but China and India have been the traditional go-to markets.
Indonesia started 2026 strong as the value of its palm oil exports skyrocketed 59.63% year-on-year (yoy) in the first month. The January-February exports also rose 26.40%, value-wise.
Ateng told the same conference that palm oil prices in international markets “had been rising since the beginning of the year”. It hit $1,149.33 per metric ton in April, quite a jump from $980.12 a metric ton seen in December 2025. At home, Indonesian palm oil producers group Gapki had previously complained about the 50% hike in transport and logistics costs for exports following the Iran war. The clashes -- which triggered the blockade of the Strait of Hormuz -- forced seaborne shipments to look for alternative routes, hence longer voyages.
Indonesia is gearing up to increase the mandatory palm oil blend in its diesel from the current 40% to 50%, starting in July. The move -- aimed at easing the war-fueled fiscal pressures -- will likely see Indonesia allocate more of its palm oil to meet the growing domestic demand, unless it increases the existing production. Jakarta Globe
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Africa seeks sustainable reclaim of palm oil industry
While the oil palm is native to Africa, the continent currently imports nearly half of its palm oil consumption, primarily from Southeast Asia. As African nations seek to bridge this production gap to save foreign currency and ensure food security, experts warn against the massive deforestation seen in major producers such as Indonesia and Malaysia. In Africa, 70% of production comes from smallholder farmers whose yields average just 6 tons per hectare, compared to over 20 tons on commercial plantations. Africa shows strong potential to increase palm oil production, with governments and multinational companies increasingly looking to invest in the industry. However, this creates pressure to expand farmland, with the Congo Basin and Cameroon’s ancient rainforests particularly at risk. Meanwhile, experts are advocating for an alternative approach, with sustainable certification programs demonstrating that yields can be improved on existing farmland. Already, one Ghanaian smallholder cooperative boosted output to 21 tons per hectare. Unfortunately, certification costs remain prohibitive without external financial support. African Business
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EU removes leather from flagship anti-deforestation law
The European Commission has excluded imports of leather from its anti-deforestation simplification review package, with compliance costs for businesses expected to be reduced by up to 75%.
The European Union Deforestation Regulation (EUDR) mandates that products derived from beef, cocoa, coffee, palm oil, natural rubber, soy, or wood must be “deforestation-free” and legally produced to be placed on the EU market.
The burden of compliance, or explanation, lies with importing businesses, and deforestation occurring after 2020 is taken into account.
The regulation has now been delayed twice. It was originally meant to enter into force on December 30, 2024, for large businesses, and to expand to micro and small businesses a year later.
However, after a revision late last year, the dates have been moved to December 30, 2026, for large businesses and June 30, 2027, for small firms. The proposals were also delayed, with green groups expecting a revised publication to be published on 1 May. The Commission finally published the revisions on Monday, 4 May.
Publications include a report to the European Parliament and the Council, an updated guidance document and Frequently Asked Questions, and a draft delegated act on the product scope of the EUDR.
The Commission claims that changes will reduce annual compliance costs for companies subject to EUDR obligations by about 75%, compared to the first iteration of the directive. Edie
---------
Global Witness calls out 'scandalous' exclusion of leather in EU deforestation regulation (EUDR) review
Responding to the European Commission's publication of the EUDR package on Monday 4th of May, Beate Beller, senior EU campaigner for Global Witness, said:
“Caving to industry pressure by excluding leather from EU deforestation rules is nothing short of scandalous.
“Cattle products, including leather and hides, are major drivers of deforestation in EU supply chains - leaving them out will have catastrophic consequences for people and planet.
“The EU must play its part in tackling the global deforestation crisis, by protecting climate-critical forests such as the Amazon and the Gran Chaco.
“The EUDR has the tools, and now we must finally use them. The EU must deliver the deforestation law, and deliver it without compromise.”
The EU’s deforestation law “EUDR” seeks to combat climate change and biodiversity loss by ensuring that products sold in the EU are not sourced from deforested land and are not linked to human rights abuses. Commodities in scope including coffee, timber, palm oil, cattle, soy, rubber and cocoa, as well as products derived from them.
Approved in 2023, the EUDR has been delayed twice and is now expected to come into application by the end of this year. Further amendments to the law were enacted in December 2025, when EU co-legislators agreed on a further 'simplification package', which the EU Commission presented today.
In April 2026, Global Witness revealed that Italian tanneries controlled by the French luxury group, LVMH, had been seeking leather exemptions to the EUDR while importing hides linked to significant Paraguayan forest loss.
A previous analysis by Global Witness found that the EUDR could help save over 8 million hectares of forest over the next decade, an area approximately the size of Austria. Global Witness
---------
Palm oil: lessons for Nigeria from Malaysia
Malaysia’s secret, Nigeria must learn from
Malaysia’s palm oil boom has been defined by deliberate strategy and sustained momentum, driven by a mix of market coordination, policy clarity, and aggressive global positioning.
Before Malaysia’s palm oil boom, the golden red fruit thrived in Nigerian soil, perfuming kitchens and shaping household diets with a taste few could resist.
Over time, however, that same crop journeyed across continents to Southeast Asia, where it found new life in Malaysian plantations. Today, Malaysia stands as a global powerhouse in palm oil exports, while Nigeria, once a dominant force, increasingly looks outward to meet its needs.
Nigeria currently produces between 1.2 million and 1.5 million tonnes of palm oil, far below its estimated domestic demand of about 2.4 million tonnes. The shortfall is routinely bridged through imports from Malaysia and other producing nations. This reversal raises a pressing question. How did a country that once introduced oil palm to Malaysia become dependent on imported supply?
Historically, Nigeria’s position was formidable, because In 1965, when global palm oil demand stood at roughly 1.5 million tonnes, Nigeria accounted for about 43 percent of the market. Today, with global demand at about 14 million tonnes, the country holds just seven percent.
“Due to neglect and lack of strategic investment in the sector by successive governments, Nigeria’s production capacity has dwindled, adding that the country ranks fifth globally in palm oil production, lagging behind Indonesia, Malaysia, Thailand, and Colombia,” noted Alphonsus Inyang, president of the National Palm Produce Association of Nigeria.
Meanwhile, Malaysia’s industry continues to expand. For instance, in 2025, the country recorded its highest ever crude palm oil production at 20.28 million tonnes, a 4.9 percent increase from the previous year, according to the Malaysia Palm Oil Council (MPOC).
The shift in trade patterns is equally striking as sub-Saharan Africa has now overtaken South Asia and the Asia Pacific to become the largest importing region for Malaysian palm oil, exposing a widening opportunity gap for Nigerian investors.
According to the MPOC 2025 annual report, imports into sub-Saharan Africa rose by 11.9 percent to 4.12 million tonnes. Nigeria itself posted a notable increase, with imports climbing by 15.1 percent to 285,825 tonnes, driven by strong domestic consumption.
Kenya led the surge, emerging as the world’s second largest individual importer of Malaysian palm oil in 2025, with volumes reaching about 1.21 million tonnes. BusinessNG
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May 02, 2026
Indonesia's ITS Develops Scalable, High-Efficiency Palm-Based Biogasoline Production Technology
SURABAYA, INDONESIA, May 2, 2026 - (ACN Newswire) - Institut Teknologi Sepuluh Nopember (ITS) has developed an innovative technology known as Benwit (Palm Gasoline), enabling the conversion of crude palm oil (CPO) into high-quality biogasoline, and presenting a promising alternative for reducing Indonesia’s substantial dependence on imported petroleum and foreign extraction technologies.
Geopolitical tensions have continued to disrupt the global oil market and threaten energy supply security across Southeast Asia, thus emerging economies such as Indonesia are placing greater emphasis on energy sovereignty to safeguard national interests against the volatility of fossil fuel supply chains.
The research, funded by the Indonesian Oil Palm Plantation Fund Management Agency (BPDPKS), applies an advanced catalytic cracking method developed by ITS expert Dr. Eng. Hosta Ardhyananta, S.T., M.Sc., and his team. This method is designed to decompose large triglyceride molecules in crude palm oil (CPO) into lighter hydrocarbon fractions that are suitable for use in combustion engines.
Hosta's team successfully optimized the reaction by introducing a bimetallic catalytic composed of Nickel Oxide (Nio) and Copper Oxide (CuO). This catalytic synergy enabled a substantial reduction in operating temperature, from 380°C to 320°C, while simultaneously increasing the biogasoline yield from 60% to an impressive 83%.
The resulting fuel consists of short-chain hydrocarbons (C5–C11), closely resembling the chemical composition of commercial gasoline. In addition to the primary fuel product, the process reflects a zero-emission approach, in which gaseous byproducts are recycled as a heat source for the reactors, while liquid residues are repurposed as fuel for industrial or household stoves.
Hosta noted that the innovation has been applied with agricultural machinery, but testing has been underway since April with conventional internal combustion engines through a blending method with fossil fuels and will continue to enable Benwit as a primary fuel for conventional vehicles, in line with the Indonesian government's plan to implement B50 biodiesel in July.
This innovation aligns with several of the United Nations Sustainable Development Goals (SDGs), particularly Goal 7 on affordable and clean energy, and Goal 12 on responsible consumption and production. A comprehensive Life Cycle Assessment (LCA) conducted by the research team indicates that the production process generates a minimal carbon footprint in comparison with conventional fossil fuels.
The development of Benwit has also received full support from the Indonesian Minister of Agriculture, Amran Sulaiman. In the near future, collaboration with PT Perkebunan Nusantara (PTPN) PalmCo IV is expected to commence following the signing of a Memorandum of Understanding (MoU) with ITS.
Prof. Dr. (HC) Ir. Bambang Pramujati, S.T., M.Sc.Eng., Ph.D., and Rector of ITS, underscored the timeliness of Benwit, noting that the current global situation offers a strategic opportunity for the government to accelerate the transition toward alternative energy sources, while the use of domestic palm oil reserves could help mitigate the effects of external fuel crises.
Benwit bio-based fuel products, for agriculturl machinery and for convetional vehicles, represent a potentially significant policy instrument for advancing the transition to renewable energy, while working to reinforce national energy security.
About ITS
Established in 1960, Institut Teknologi Sepuluh Nopember (ITS) is one of Indonesia’s leading universities, with a strong emphasis on science, engineering, and innovation. Based in Surabaya, ITS is committed to advancing global sustainable development through cutting-edge research, technological innovation, and collaboration with industry. Visit www.its.ac.id/news
Media Contact:
ITS Public Relations (HUMAS)
Email: [email protected]
Instagram: its_campus
Facebook: Institut Teknologi Sepuluh Nopember
Twitter, Line: @its_campus
---------
Indonesia’s B50 Mandate: A $10 Billion Shield Against Fuel Imports or a Fiscal Time Bomb?
The Indonesian government plans to implement a B50 biodiesel mandate by July 2026, targeting a $10.8 billion reduction in foreign exchange spending.
●The palm oil industry is expected to add $1.38 billion in value-added revenue and create nearly 100,000 new jobs through the downstream initiative.
●The Indonesian Palm Oil Association (GAPKI) supports the move but warns that stagnant production must be addressed via accelerated replanting programs.
●Financial regulators at the BPDP warn that the program risks a deficit unless global oil prices stay above $100 per barrel or export levies are doubled.
JAKARTA, Investortrust.id — Indonesia is doubling down on its "energy sovereignty" play, positioning the upcoming B50 biodiesel mandate as a massive $10.8 billion buffer against global volatility.
The shift to a 50% palm-oil-based fuel blend represents a radical decoupling from global oil markets. For investors, this solidifies Indonesia’s status as a "biofuel superpower," but it simultaneously hitches the national budget to the volatile price gap between crude palm oil (CPO) and Brent crude.
The Macro Play: Devisa and Jobs
Ferry Irawan, Deputy for Coordination of SOE Business Development at the Coordinating Ministry for Economic Affairs, revealed that the B50 program is designed to protect the state budget (APBN). The government projects foreign exchange savings will climb to Rp 172.35 trillion ($10.84 billion) in 2026, up from the current 2025 forecast of Rp 133.3 trillion.
"The implementation of B50 does not only impact the energy sector but provides a direct benefit to the state budget," Irawan stated during a national seminar in Jakarta on Thursday. He noted that the downstream push would boost the palm oil industry's value-add to Rp 21.94 trillion ($1.38 billion) and swell the workforce to 1.97 million people.
The Fiscal Risk: The $100 Barrel Threshold
Despite the optimism, the financial backbone of the project faces a potential "crush spread" crisis. Mohammad Alfansyah, Director at the Palm Oil Fund Management Agency (BPDP), warned that the cost of subsidizing the gap between biodiesel and fossil diesel could bleed the agency dry if oil prices soften.
Alfansyah explained that if Brent crude sits at $85 per barrel, the agency must shell out Rp 41.3 trillion ($2.6 billion) in incentives. That burden only drops to a manageable level if oil surges past $100. "In normal conditions, B50 implementation still has the potential to cause a deficit because our primary funding still relies on export levies," Alfansyah cautioned.
Production Stagnation and "Flexible Blending"
The Indonesian Palm Oil Association (GAPKI), the nation's powerful palm oil association, is sounding the alarm on supply. GAPKI Chairman Eddy Martono highlighted that national CPO production has plateaued at around 50 million tons.
To mitigate supply shocks and fiscal strain, GAPKI is lobbying for a "flexible blending" policy. This would allow the government to dial the 50% mandate up or down based on market prices and feedstock availability. "If the Smallholder Oil Palm Replanting (PSR) program runs well, we could hit 60 million tons, which makes B50 very safe," Martono added.
Infrastructure Bottleneck: Pertamina’s Storage Race
The technical reality of B50 is forcing a massive logistical overhaul at PT Pertamina Patra Niaga, the trading and distribution arm of the state energy giant. Sigit Setiawan, VP of Business Development & Subsidiary, revealed that the company is currently mapping its entire infrastructure network to accommodate the higher volume of Fatty Acid Methyl Ester (FAME) required for the 50% blend. This shift necessitates significantly larger storage tanks across the archipelago.
However, Pertamina faces a looming real estate crisis at its fuel terminals. Setiawan noted that while capacity must expand, many key sites—including the critical Plumpang terminal in Jakarta and facilities in Baubau, Sulawesi—are land-locked by surrounding developments that cannot be cleared or purchased.
Furthermore, the "last-mile" delivery of B50 remains a geographic challenge. Currently, only 35 major terminals are equipped to receive direct FAME shipments for on-site blending. Remote regions still rely on receiving pre-blended biodiesel, a logistical dependency that could complicate the nationwide rollout of the B50 mandate.
The success of the B50 rollout will ultimately depend on whether the government can bridge the gap between its high-level fiscal goals and the gritty, physical constraints of Indonesia’s aging fuel infrastructure. Investor Trust
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Biofuel use pushes up food prices: Is demand here to stay?
01-May-2026 by Augustus Bambridge-Sutton
As the price of crude oil is buoyed by the Iran war, the world’s energy markets are scrambling for alternatives
https://www.foodnavigator.com/Article/2026/05/01/food-prices-impacted-by-biofuels/
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Palm oil could strengthen Sri Lanka’s economy
In Colombo, a local industry body said that expanding palm oil production could significantly reduce the country’s import dependence and ease pressure on foreign exchange reserves, following a sector-focused discussion involving industry representatives and academics.
According to participants, Sri Lanka imported 38,210 tonnes of palm oil in 2025, compared with 33,696 tonnes of coconut oil, with total spending reaching about 140 billion rupees. By comparison, palm oil imports stood at 34,708 tonnes in 2024. Experts noted that developing domestic production could substantially cut these costs.
Professor Asoka Nugawela said current restrictions on oil palm cultivation are limiting the use of a high-yield crop. He added that average yields can reach around 4 tonnes of oil per hectare, and at a global price of roughly $1,100 per tonne, this represents a significant economic opportunity.
Participants also said that around 8,000 hectares of suitable land could be allocated for cultivation, supporting agricultural diversification, rural employment and potential export growth. At the same time, they stressed the need for clear regulations and oversight to minimise environmental risks.
The Palm Oil Industry Association said future policy decisions should be based on scientific evidence, economic rationale and sustainability principles, in order to integrate the sector into the country’s broader economic recovery strategy.
It is worth noting that the ban on oil palm cultivation introduced in 2021 has already cost Sri Lanka more than $175 million in edible oil imports and around $35 million annually in lost foreign exchange. Industry groups say the restrictions have left thousands of hectares idle, reduced investment returns and weakened employment, while prior to the ban the sector supported thousands of jobs and covered a significant share of domestic demand. UKR Agroconsult
Indonesia's ITS Develops Scalable, High-Efficiency Palm-Based Biogasoline Production Technology
SURABAYA, INDONESIA, May 2, 2026 - (ACN Newswire) - Institut Teknologi Sepuluh Nopember (ITS) has developed an innovative technology known as Benwit (Palm Gasoline), enabling the conversion of crude palm oil (CPO) into high-quality biogasoline, and presenting a promising alternative for reducing Indonesia’s substantial dependence on imported petroleum and foreign extraction technologies.
Geopolitical tensions have continued to disrupt the global oil market and threaten energy supply security across Southeast Asia, thus emerging economies such as Indonesia are placing greater emphasis on energy sovereignty to safeguard national interests against the volatility of fossil fuel supply chains.
The research, funded by the Indonesian Oil Palm Plantation Fund Management Agency (BPDPKS), applies an advanced catalytic cracking method developed by ITS expert Dr. Eng. Hosta Ardhyananta, S.T., M.Sc., and his team. This method is designed to decompose large triglyceride molecules in crude palm oil (CPO) into lighter hydrocarbon fractions that are suitable for use in combustion engines.
Hosta's team successfully optimized the reaction by introducing a bimetallic catalytic composed of Nickel Oxide (Nio) and Copper Oxide (CuO). This catalytic synergy enabled a substantial reduction in operating temperature, from 380°C to 320°C, while simultaneously increasing the biogasoline yield from 60% to an impressive 83%.
The resulting fuel consists of short-chain hydrocarbons (C5–C11), closely resembling the chemical composition of commercial gasoline. In addition to the primary fuel product, the process reflects a zero-emission approach, in which gaseous byproducts are recycled as a heat source for the reactors, while liquid residues are repurposed as fuel for industrial or household stoves.
Hosta noted that the innovation has been applied with agricultural machinery, but testing has been underway since April with conventional internal combustion engines through a blending method with fossil fuels and will continue to enable Benwit as a primary fuel for conventional vehicles, in line with the Indonesian government's plan to implement B50 biodiesel in July.
This innovation aligns with several of the United Nations Sustainable Development Goals (SDGs), particularly Goal 7 on affordable and clean energy, and Goal 12 on responsible consumption and production. A comprehensive Life Cycle Assessment (LCA) conducted by the research team indicates that the production process generates a minimal carbon footprint in comparison with conventional fossil fuels.
The development of Benwit has also received full support from the Indonesian Minister of Agriculture, Amran Sulaiman. In the near future, collaboration with PT Perkebunan Nusantara (PTPN) PalmCo IV is expected to commence following the signing of a Memorandum of Understanding (MoU) with ITS.
Prof. Dr. (HC) Ir. Bambang Pramujati, S.T., M.Sc.Eng., Ph.D., and Rector of ITS, underscored the timeliness of Benwit, noting that the current global situation offers a strategic opportunity for the government to accelerate the transition toward alternative energy sources, while the use of domestic palm oil reserves could help mitigate the effects of external fuel crises.
Benwit bio-based fuel products, for agriculturl machinery and for convetional vehicles, represent a potentially significant policy instrument for advancing the transition to renewable energy, while working to reinforce national energy security.
About ITS
Established in 1960, Institut Teknologi Sepuluh Nopember (ITS) is one of Indonesia’s leading universities, with a strong emphasis on science, engineering, and innovation. Based in Surabaya, ITS is committed to advancing global sustainable development through cutting-edge research, technological innovation, and collaboration with industry. Visit www.its.ac.id/news
Media Contact:
ITS Public Relations (HUMAS)
Email: [email protected]
Instagram: its_campus
Facebook: Institut Teknologi Sepuluh Nopember
Twitter, Line: @its_campus
---------
Indonesia’s B50 Mandate: A $10 Billion Shield Against Fuel Imports or a Fiscal Time Bomb?
The Indonesian government plans to implement a B50 biodiesel mandate by July 2026, targeting a $10.8 billion reduction in foreign exchange spending.
●The palm oil industry is expected to add $1.38 billion in value-added revenue and create nearly 100,000 new jobs through the downstream initiative.
●The Indonesian Palm Oil Association (GAPKI) supports the move but warns that stagnant production must be addressed via accelerated replanting programs.
●Financial regulators at the BPDP warn that the program risks a deficit unless global oil prices stay above $100 per barrel or export levies are doubled.
JAKARTA, Investortrust.id — Indonesia is doubling down on its "energy sovereignty" play, positioning the upcoming B50 biodiesel mandate as a massive $10.8 billion buffer against global volatility.
The shift to a 50% palm-oil-based fuel blend represents a radical decoupling from global oil markets. For investors, this solidifies Indonesia’s status as a "biofuel superpower," but it simultaneously hitches the national budget to the volatile price gap between crude palm oil (CPO) and Brent crude.
The Macro Play: Devisa and Jobs
Ferry Irawan, Deputy for Coordination of SOE Business Development at the Coordinating Ministry for Economic Affairs, revealed that the B50 program is designed to protect the state budget (APBN). The government projects foreign exchange savings will climb to Rp 172.35 trillion ($10.84 billion) in 2026, up from the current 2025 forecast of Rp 133.3 trillion.
"The implementation of B50 does not only impact the energy sector but provides a direct benefit to the state budget," Irawan stated during a national seminar in Jakarta on Thursday. He noted that the downstream push would boost the palm oil industry's value-add to Rp 21.94 trillion ($1.38 billion) and swell the workforce to 1.97 million people.
The Fiscal Risk: The $100 Barrel Threshold
Despite the optimism, the financial backbone of the project faces a potential "crush spread" crisis. Mohammad Alfansyah, Director at the Palm Oil Fund Management Agency (BPDP), warned that the cost of subsidizing the gap between biodiesel and fossil diesel could bleed the agency dry if oil prices soften.
Alfansyah explained that if Brent crude sits at $85 per barrel, the agency must shell out Rp 41.3 trillion ($2.6 billion) in incentives. That burden only drops to a manageable level if oil surges past $100. "In normal conditions, B50 implementation still has the potential to cause a deficit because our primary funding still relies on export levies," Alfansyah cautioned.
Production Stagnation and "Flexible Blending"
The Indonesian Palm Oil Association (GAPKI), the nation's powerful palm oil association, is sounding the alarm on supply. GAPKI Chairman Eddy Martono highlighted that national CPO production has plateaued at around 50 million tons.
To mitigate supply shocks and fiscal strain, GAPKI is lobbying for a "flexible blending" policy. This would allow the government to dial the 50% mandate up or down based on market prices and feedstock availability. "If the Smallholder Oil Palm Replanting (PSR) program runs well, we could hit 60 million tons, which makes B50 very safe," Martono added.
Infrastructure Bottleneck: Pertamina’s Storage Race
The technical reality of B50 is forcing a massive logistical overhaul at PT Pertamina Patra Niaga, the trading and distribution arm of the state energy giant. Sigit Setiawan, VP of Business Development & Subsidiary, revealed that the company is currently mapping its entire infrastructure network to accommodate the higher volume of Fatty Acid Methyl Ester (FAME) required for the 50% blend. This shift necessitates significantly larger storage tanks across the archipelago.
However, Pertamina faces a looming real estate crisis at its fuel terminals. Setiawan noted that while capacity must expand, many key sites—including the critical Plumpang terminal in Jakarta and facilities in Baubau, Sulawesi—are land-locked by surrounding developments that cannot be cleared or purchased.
Furthermore, the "last-mile" delivery of B50 remains a geographic challenge. Currently, only 35 major terminals are equipped to receive direct FAME shipments for on-site blending. Remote regions still rely on receiving pre-blended biodiesel, a logistical dependency that could complicate the nationwide rollout of the B50 mandate.
The success of the B50 rollout will ultimately depend on whether the government can bridge the gap between its high-level fiscal goals and the gritty, physical constraints of Indonesia’s aging fuel infrastructure. Investor Trust
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Biofuel use pushes up food prices: Is demand here to stay?
01-May-2026 by Augustus Bambridge-Sutton
As the price of crude oil is buoyed by the Iran war, the world’s energy markets are scrambling for alternatives
https://www.foodnavigator.com/Article/2026/05/01/food-prices-impacted-by-biofuels/
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Palm oil could strengthen Sri Lanka’s economy
In Colombo, a local industry body said that expanding palm oil production could significantly reduce the country’s import dependence and ease pressure on foreign exchange reserves, following a sector-focused discussion involving industry representatives and academics.
According to participants, Sri Lanka imported 38,210 tonnes of palm oil in 2025, compared with 33,696 tonnes of coconut oil, with total spending reaching about 140 billion rupees. By comparison, palm oil imports stood at 34,708 tonnes in 2024. Experts noted that developing domestic production could substantially cut these costs.
Professor Asoka Nugawela said current restrictions on oil palm cultivation are limiting the use of a high-yield crop. He added that average yields can reach around 4 tonnes of oil per hectare, and at a global price of roughly $1,100 per tonne, this represents a significant economic opportunity.
Participants also said that around 8,000 hectares of suitable land could be allocated for cultivation, supporting agricultural diversification, rural employment and potential export growth. At the same time, they stressed the need for clear regulations and oversight to minimise environmental risks.
The Palm Oil Industry Association said future policy decisions should be based on scientific evidence, economic rationale and sustainability principles, in order to integrate the sector into the country’s broader economic recovery strategy.
It is worth noting that the ban on oil palm cultivation introduced in 2021 has already cost Sri Lanka more than $175 million in edible oil imports and around $35 million annually in lost foreign exchange. Industry groups say the restrictions have left thousands of hectares idle, reduced investment returns and weakened employment, while prior to the ban the sector supported thousands of jobs and covered a significant share of domestic demand. UKR Agroconsult
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May 01, 2026
Nigeria caught in global palm oil squeeze as prices hit new highs
Nigeria is facing higher costs for importing palm oil as global prices continue to rise due to supply problems in Indonesia, the world’s largest producer.
Crude Palm Oil (CPO) prices on the Bursa Malaysia Derivatives Exchange are currently trading between $1,135 and $1,160 per metric ton.
This increase is affecting countries like Nigeria, which depends on imports to meet its supply gap of over 500,000 metric tons each year.
Indonesia plans to increase its palm oil biodiesel blend to 50% (B50) in 2026. The country is also maintaining higher export taxes to support its domestic fuel needs.
These policies reduce the amount of palm oil available for export, pushing global prices higher and increasing costs for importers like Nigeria.
Palm oil prices are also linked to crude oil prices because palm oil is used in biodiesel production. With crude oil around $120 per barrel, palm oil prices are expected to remain high.
Weather conditions are also affecting supply.
A strong dry season and El Niño effects are expected to reduce Indonesia’s output by up to one million tons in 2026.
At the same time, countries like Malaysia and Indonesia are increasing local biodiesel usage, which further limits exports.
Nigeria consumes over 2.5 million metric tons of palm oil yearly but produces only about 1.4 million metric tons.
This shortfall forces the country to import large quantities, costing about $500 million to $600 million annually.
The gap also contributes to food inflation, as palm oil is widely used in households.
Nigeria used to be a major global producer of palm oil in the 1960s, supplying over 40% of the world market. However, production has declined significantly over the years. PM News Nigeria
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Nigeria, Malaysia hit $1.2bn trade boom as new customs deal takes shape
Trade between Nigeria and Malaysia has reached approximately $1.21bn over the past five years, driven largely by a sharp rise in imports from Southeast Asia, according to the Nigeria Customs Service (NCS).
The National Public Relations Officer of the NCS, Abdullahi Maiwada, said the growth reflects both countries’ deepening commercial ties and ongoing efforts to improve customs cooperation. He noted that the development aligns with broader initiatives to strengthen international trade facilitation and regulatory coordination.
Maiwada explained that the latest engagement between the two countries followed a visit by the Comptroller-General of Customs, Adewale Adeniyi, to the Royal Malaysian Customs Department (RMCD) headquarters during his participation in DSA Malaysia 2026. He said the discussions took place against the backdrop of expanding bilateral trade flows.
Adeniyi was received by the Director-General of the RMCD, Dato’ Haji Amran bin Haji Ahmad, with both sides holding talks centred on customs modernisation, institutional collaboration, and coordinated border management systems designed to improve efficiency and compliance.
According to Maiwada, both administrations acknowledged that despite long-standing trade relations, there is currently no formal legal framework guiding customs cooperation between Nigeria and Malaysia. He said this gap has become more apparent as trade volumes continue to rise.
To address this, both sides agreed to begin processes toward establishing a Mutual Recognition Agreement under the World Customs Organisation framework, to be pursued through diplomatic channels. Maiwada said the arrangement is expected to strengthen trust and streamline trade facilitation measures.
Adeniyi stressed that the scale of trade between the two countries now requires a more structured customs partnership. He highlighted Malaysia’s position as a key trading partner for Nigeria, with major imports including crude palm oil, refined palm olein, jet fuel, food products, machinery, and industrial inputs. Business Insider Africa
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EU to remove leather from anti-deforestation law after industry pressure, officials say
BRUSSELS, April 30 (Reuters) - The European Commission is set to exclude imports of leather from its anti-deforestation law, EU officials told Reuters, after a campaign by industry groups which argued that production does not incentivise the cattle farming that fuels forest destruction.
The exemption will remove leather, hides and skins from the world-first law, which from December will require companies selling goods including soy, coffee, beef and palm oil into the EU to prove their products did not cause deforestation.
A Commission spokesperson declined to comment on the plan.
Those breaking the rules risk hefty fines and a potential ban on accessing the EU market.
Environmental groups have urged the EU not to exempt leather, arguing that this would weaken the law's ability to curb deforestation.
Leather industry groups have argued that as a by-product of the meat industry, with a relatively low value, leather's production does not incentivise the cattle farming that drives deforestation. Beef imports are covered by the EU law.
Including leather "will have a devastating impact on the EU tanning industry," Europe's tanning and dressing industry body COTANCE said in a public submission to the EU last year, adding that tanneries would not be able to force cattle farming firms further up the supply chain to comply with the EU law.
Industry groups have stepped up their calls in recent weeks, making their case to EU lawmakers and representatives from the European Commission at an event at the European Parliament on April 8.
Europe's tanning industry is the world's largest supplier of leather, according to the EU.
European tanneries import around 40% of the raw materials - such as hides - they use from countries including Brazil and the U.S., industry data shows.
The Commission's analysis, when it first designed the law in 2021, had said leather is "a relevant factor of deforestation according to literature and feedback from stakeholders".
Brussels had already delayed the launch of the policy by two years, after opposition from Brazil, Indonesia and the United States, which say complying would be costly and hurt their exports to Europe. Reuters
Nigeria caught in global palm oil squeeze as prices hit new highs
Nigeria is facing higher costs for importing palm oil as global prices continue to rise due to supply problems in Indonesia, the world’s largest producer.
Crude Palm Oil (CPO) prices on the Bursa Malaysia Derivatives Exchange are currently trading between $1,135 and $1,160 per metric ton.
This increase is affecting countries like Nigeria, which depends on imports to meet its supply gap of over 500,000 metric tons each year.
Indonesia plans to increase its palm oil biodiesel blend to 50% (B50) in 2026. The country is also maintaining higher export taxes to support its domestic fuel needs.
These policies reduce the amount of palm oil available for export, pushing global prices higher and increasing costs for importers like Nigeria.
Palm oil prices are also linked to crude oil prices because palm oil is used in biodiesel production. With crude oil around $120 per barrel, palm oil prices are expected to remain high.
Weather conditions are also affecting supply.
A strong dry season and El Niño effects are expected to reduce Indonesia’s output by up to one million tons in 2026.
At the same time, countries like Malaysia and Indonesia are increasing local biodiesel usage, which further limits exports.
Nigeria consumes over 2.5 million metric tons of palm oil yearly but produces only about 1.4 million metric tons.
This shortfall forces the country to import large quantities, costing about $500 million to $600 million annually.
The gap also contributes to food inflation, as palm oil is widely used in households.
Nigeria used to be a major global producer of palm oil in the 1960s, supplying over 40% of the world market. However, production has declined significantly over the years. PM News Nigeria
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Nigeria, Malaysia hit $1.2bn trade boom as new customs deal takes shape
Trade between Nigeria and Malaysia has reached approximately $1.21bn over the past five years, driven largely by a sharp rise in imports from Southeast Asia, according to the Nigeria Customs Service (NCS).
- Nigeria and Malaysia recorded approximately $1.21bn in bilateral trade over five years, according to the Nigeria Customs Service.
- Imports from Malaysia rose significantly, reflecting stronger commercial ties between the two countries.
- Both customs authorities have now moved to strengthen cooperation through a proposed Mutual Recognition Agreement.
- The initiative aims to improve trade facilitation, border security and regulatory efficiency amid growing exchange volumes.
The National Public Relations Officer of the NCS, Abdullahi Maiwada, said the growth reflects both countries’ deepening commercial ties and ongoing efforts to improve customs cooperation. He noted that the development aligns with broader initiatives to strengthen international trade facilitation and regulatory coordination.
Maiwada explained that the latest engagement between the two countries followed a visit by the Comptroller-General of Customs, Adewale Adeniyi, to the Royal Malaysian Customs Department (RMCD) headquarters during his participation in DSA Malaysia 2026. He said the discussions took place against the backdrop of expanding bilateral trade flows.
Adeniyi was received by the Director-General of the RMCD, Dato’ Haji Amran bin Haji Ahmad, with both sides holding talks centred on customs modernisation, institutional collaboration, and coordinated border management systems designed to improve efficiency and compliance.
According to Maiwada, both administrations acknowledged that despite long-standing trade relations, there is currently no formal legal framework guiding customs cooperation between Nigeria and Malaysia. He said this gap has become more apparent as trade volumes continue to rise.
To address this, both sides agreed to begin processes toward establishing a Mutual Recognition Agreement under the World Customs Organisation framework, to be pursued through diplomatic channels. Maiwada said the arrangement is expected to strengthen trust and streamline trade facilitation measures.
Adeniyi stressed that the scale of trade between the two countries now requires a more structured customs partnership. He highlighted Malaysia’s position as a key trading partner for Nigeria, with major imports including crude palm oil, refined palm olein, jet fuel, food products, machinery, and industrial inputs. Business Insider Africa
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EU to remove leather from anti-deforestation law after industry pressure, officials say
BRUSSELS, April 30 (Reuters) - The European Commission is set to exclude imports of leather from its anti-deforestation law, EU officials told Reuters, after a campaign by industry groups which argued that production does not incentivise the cattle farming that fuels forest destruction.
The exemption will remove leather, hides and skins from the world-first law, which from December will require companies selling goods including soy, coffee, beef and palm oil into the EU to prove their products did not cause deforestation.
A Commission spokesperson declined to comment on the plan.
Those breaking the rules risk hefty fines and a potential ban on accessing the EU market.
Environmental groups have urged the EU not to exempt leather, arguing that this would weaken the law's ability to curb deforestation.
Leather industry groups have argued that as a by-product of the meat industry, with a relatively low value, leather's production does not incentivise the cattle farming that drives deforestation. Beef imports are covered by the EU law.
Including leather "will have a devastating impact on the EU tanning industry," Europe's tanning and dressing industry body COTANCE said in a public submission to the EU last year, adding that tanneries would not be able to force cattle farming firms further up the supply chain to comply with the EU law.
Industry groups have stepped up their calls in recent weeks, making their case to EU lawmakers and representatives from the European Commission at an event at the European Parliament on April 8.
Europe's tanning industry is the world's largest supplier of leather, according to the EU.
European tanneries import around 40% of the raw materials - such as hides - they use from countries including Brazil and the U.S., industry data shows.
The Commission's analysis, when it first designed the law in 2021, had said leather is "a relevant factor of deforestation according to literature and feedback from stakeholders".
Brussels had already delayed the launch of the policy by two years, after opposition from Brazil, Indonesia and the United States, which say complying would be costly and hurt their exports to Europe. Reuters
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Palm oil news. CSPO Watch May 2026