PALMOILMAGAZINE, JAKARTA — As the world’s largest producer of crude palm oil (CPO), Indonesia holds significant power in managing supply to both global and domestic vegetable oil markets. One key channel for domestic CPO distribution is through the government-mandated “Minyak Kita” cooking oil program, which is regulated under the Domestic Market Obligation (DMO) scheme and distributed via the Public Service Obligation (PSO) mechanism.
According to the Indonesian Palm Oil Association (GAPKI), Indonesia’s total production of CPO and Palm Kernel Oil (PKO) in 2024 reached 52.76 million tons — comprising 48.16 million tons of CPO and 4.60 million tons of PKO. This marked a 3.8% decline from 2023’s output of 54.84 million tons.
The drop in production has directly contributed to the decline in CPO and derivative product exports, based on GAPKI data. While most export volumes shrank, some oleochemical products still recorded growth. Interestingly, the lower export volume led to an increase in average Freight on Board (FOB) prices for these products.
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Despite this price rise, Indonesia’s export revenue from palm oil products fell by as much as IDR 23 trillion in 2024. This decline has shifted more CPO into the domestic market — particularly for cooking oil consumption and the national biodiesel B35 program.
Looking ahead, GAPKI projects that Indonesia will move toward implementing the B40 biodiesel program in 2025, requiring about 13.6 million tons of CPO. Total domestic CPO consumption is expected to hit 26.1 million tons, leaving approximately 12.42 million tons available for cooking oil and other derivatives.
Data from the National Food Agency (Bapanas) shows that in 2023, per capita palm cooking oil consumption reached 9.56 kg/year — up 0.9% from the previous year. However, GAPKI data for 2024 indicates a shift: as of November, palm cooking oil consumption had fallen to 9.244 million tons, a 2.76% decrease from 2023.
What’s the current state of Indonesia’s palm cooking oil market?
Field observations by PalmOilMagazine reveal that palm cooking oil remains available in both traditional markets and modern retailers. Supplies appear sufficient to meet consumer demand during Ramadan. However, this adequate supply has been overshadowed by pricing issues and legal violations.
Recent surprise inspections by authorities uncovered widespread irregularities in the government’s “Minyak Kita” program. Packaging labeled as containing 1 liter was often found to contain only 750–800 milliliters — a clear breach of regulations and a form of consumer fraud.
This 2025 palm cooking oil scandal has sparked renewed controversy in Indonesia’s palm oil trade. The mislabeling and underfilling of “Minyak Kita” products are not just regulatory breaches — they damage the credibility of Indonesia’s palm oil in global markets. The contents of these bottles do not match the weight declared on their labels.
Compounding the issue is the long-standing problem of price manipulation. Despite the government’s set retail ceiling price (HET) of IDR 15,700 per liter, many underfilled “Minyak Kita” products are still being sold at or above this official limit.
These developments paint a troubling picture of Indonesia’s palm oil trade in 2025. They highlight systemic issues that not only undermine consumer trust but also tarnish the reputation of palm oil itself — despite the industry’s regulatory framework designed to support fair trade and sustainability.
Palm oil and its derivatives undeniably offer vast benefits — economically, socially, and environmentally. But the misconduct of a few bad actors continues to stain the industry’s image. This must change. If Indonesia wants to uphold its position in the global palm oil supply chain, it must ensure that its domestic practices — especially in public-facing programs like “Minyak Kita” — reflect integrity and transparency.
Author: Ignatius Ery Kurniawan, Editor-in-Chief, PalmOilMagazine
