Exports of palm oil (CPO) and its derivatives began 2026 with positive performance. According to the latest data from the Central Statistics Agency (BPS), the value of shipments of this leading Indonesian commodity rose significantly in January, although this growth was not enough to stem the trend of shrinking national trade surpluses.
The export value of CPO and its derivatives reached US$2.29 billion in January 2026. This figure represents a significant jump compared to the same period in 2025, which was only US$1.44 billion.
“Our palm oil exports increased 59.63% year-on-year (yoy),” said Ateng Hartono, Deputy for Distribution and Services Statistics at the Statistics Indonesia (BPS), in a press release in Jakarta on Monday (March 2).
In terms of volume, there was also a significant increase of 77.07% year-on-year, from 1.27 million tons to 2.24 million tons. The palm oil sector now contributes approximately 10.78% of Indonesia’s total non-oil and gas export value in the first month of this year.
Despite the increase in export volume, international market price dynamics show a mixed trend. Global CPO prices in January rose 1.81% month-on-month compared to the previous month, averaging US$997.82 per metric ton. However, compared to January of last year, this price actually declined by 6.77%.
On the other hand, this strong palm oil export performance has not yet boosted Indonesia’s overall trade surplus. Indonesia’s goods trade balance declined sharply to just US$950 million at the start of this year, down drastically from US$2.51 billion in December 2025. This figure is also far below the US$3.49 billion surplus recorded in January 2025.
Despite the decline, Indonesia has still managed to maintain a record trade surplus for 69 consecutive months since May 2020.
Global markets continue to exhibit volatility. Strong demand comes from India, the world’s largest palm oil buyer, which recorded a 51% increase in imports in January, reaching a four-month high. More competitive palm oil prices compared to soybean oil have encouraged Indian refiners to significantly increase purchases.
However, market sentiment was slightly dampened by weak purchasing managers’ index (PMI) data from China, indicating an economic slowdown in that major consumer country. Meanwhile, competition from Malaysia also looms, as the strengthening of the ringgit tends to undermine the competitiveness of its exports.
Amid export optimism, the direction of national policy under President Prabowo Subianto has begun to show a shift in priorities. The government is now placing greater emphasis on the use of palm oil for domestic needs as part of the energy independence agenda.
The government is boosting the production of palm-based biodiesel and aviation fuel (bioavtur). This policy directs CPO and its byproducts—including used cooking oil—to domestic biofuel production, which is predicted to tighten export restrictions in the future.
This measure aims to reduce dependence on fossil fuel imports and stabilize national energy costs. However, industry players warn that without significant production growth, this policy has the potential to trigger a trade-off between domestic mandate needs and potential foreign exchange earnings from global exports.
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