Indonesia's Economy
Indonesia's Palm Oil Power
How Indonesia became the world's largest palm oil producer, its importance to smallholders and India, and the 2022 export ban that shook global markets.
Indonesia produces over half of the world’s palm oil.
Importance
- Palm oil is a major export and employs millions, including smallholders.
- Plantations in Sumatra and Kalimantan.
India’s link
India is among the largest buyers of Indonesian palm oil for cooking oil.
Deforestation
Expansion cleared rainforests and peatlands, contributing to haze from fires and carbon emissions.
Biodiesel
Indonesia blends palm oil into biodiesel (B35 and moving higher), using more at home.
The 2022 export ban
- In April 2022, facing high domestic cooking oil prices, Indonesia banned palm oil exports for about three weeks.
- Global prices spiked, affecting India and others.
EU rules
The EU Deforestation Regulation requires proof products aren’t from deforested land, affecting exports.
When Indonesia banned palm oil exports in 2022, Indian cooking oil prices rose, as importers scrambled for alternatives.
Indonesia's decisions move global and Indian cooking oil prices.
- Indonesia produces over half the world's palm oil.
- India is a major buyer.
- Expansion caused deforestation and haze.
- A 2022 export ban spiked global prices.
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