Eva Fitriani, Pangkalan Bun – More than 80% of Indonesia's palm oil exports now consist of value-added downstream products rather than crude palm oil, reflecting the growing impact of the government's industrialization strategy, an official said.
Zaid Burhan Ibrahim, finance director of the Palm Oil Plantation Fund Management Agency (BPDP), said palm oil remains one of Indonesia's leading export commodities, generating more than $20 billion in annual export revenue.
"More than 80% of Indonesia's palm oil exports are now in the form of downstream products. This shows that downstream industrialization is creating greater added value for the national economy," Zaid said during a press briefing in Pangkalan Bun, Central Kalimantan.
He said Indonesia's downstream palm oil industry has expanded through four major sectors.
The first is food and consumer products, which process crude palm oil (CPO) and crude palm kernel oil (CPKO) into products such as cooking oil, margarine, bakery ingredients, and vitamins A and E.
The second is the oleochemical industry, which supplies raw materials for products including soap, detergents, cosmetics, and skincare items.
The third is renewable energy, where palm oil is processed into biodiesel, sustainable aviation fuel, and blended gasoline.
The fourth utilizes palm biomass, including empty fruit bunches, fronds, trunks, and fibers, to produce products such as animal feed, handicrafts, and bioethanol.
According to Zaid, the expansion of these downstream industries has not only increased the value of Indonesia's exports but also broadened the economic benefits generated by the palm oil sector.
BPDP estimates that the industry currently supports around 16.5 million jobs, both directly and indirectly.
About 9.7 million people work directly in plantations, including 5.2 million employed by smallholders and 4.5 million by state-owned and private plantation companies. Another 8 million jobs are supported by related industries, including transportation, fertilizer production, plantation equipment, logistics, and other services.
"When we talk about palm oil, we are really talking about the livelihoods of millions of Indonesians," Zaid said.
He added that palm oil's contribution extends beyond export earnings. In 2025, the plantation sector accounted for 4.56% of Indonesia's gross domestic product, while independent smallholders managed about 41% of the country's oil palm plantations.
Those plantations produce more than 16 million tons of palm oil annually, with productivity continuing to improve.
"These figures show that smallholders are not merely supporting players in Indonesia's palm oil industry – they are among the key actors in the national supply chain," Zaid said.