The Indonesia palm oil market reached USD 15.42 billion in 2025 and is expected to expand at a CAGR of 4.6% from 2025 to 2030. Rising consumption of palm oil across food processing, cosmetics manufacturing, and renewable energy sectors continues to propel market expansion. Indonesia’s palm oil sector remains a cornerstone of the national economy, supporting over 18 million jobs and serving as the country’s leading agricultural export commodity.
The Indonesian market represents a vital economic pillar, generating substantial agricultural revenue and foreign exchange earnings. Recent production gains stem from plantation expansion and enhanced processing technologies. Small-scale farmers manage approximately 42% of the nation’s oil palm cultivation area, while larger commercial operations controlled by domestic and international corporations comprise the remainder. In 2025, the Indonesian Palm Oil Association (GAPKI) reported that the sector contributed USD 42.5 billion to the national economy.
Palm oil production continues its upward trajectory driven by population growth and government policies promoting renewable fuel adoption. Authorities actively encourage sustainable production methods while collaborating with industry stakeholders to minimize environmental impact. In early 2025, Indonesia introduced B40 biodiesel, containing 40% palm oil content, representing a significant advancement in renewable fuel integration and environmental sustainability initiatives.
The industry demonstrates moderate growth momentum with accelerating expansion rates. Indonesia’s palm oil sector exhibits measured innovation levels, exemplified by developments such as advanced processing technologies introduced in 2025 by PT Green Palm Solutions, which launched an innovative “zero-waste” processing method in Sumatra designed to maximize oil extraction while reducing environmental impact.
The Indonesian palm oil industry shows moderate merger and acquisition activity among major players. In 2025, Sinar Mas Agro Resources expanded its operations through the acquisition of Tropical Palm Estates, strengthening its position in North Sumatra’s plantation sector.
Indonesia’s palm oil industry operates under strict regulatory oversight, with mandatory Indonesian Sustainable Palm Oil (ISPO) certification for all producers. Government regulations ensure adequate domestic supply, sustainability compliance, and adherence to international standards.
In mid-2025, Indonesia implemented updated export licensing requirements to maintain domestic price stability and guarantee sufficient local supply. These measures include enhanced monitoring of export volumes and strengthened domestic market obligations for producers before export authorization.
Palm oil’s unique characteristics make it difficult to substitute in many applications, resulting in moderate substitution levels. The market demonstrates medium end-user concentration as palm oil serves diverse sectors including food processing, personal care products, and renewable energy.
The fractionated palm oil segment maintained its market leadership with 40.1% revenue share in 2025 and is projected to experience the strongest growth throughout the forecast period. This dominance reflects its adaptability, broad industrial demand, cost advantages, and alignment with sustainability trends. Fractionated oil serves applications across food manufacturing, cosmetics production, pharmaceutical formulation, and various industrial sectors.
Demand for crude palm oil (CPO) and refined, bleached, and deodorized (RBD) palm oil is expected to grow substantially during the forecast period. CPO remains popular in food and beverage applications due to superior productivity compared to alternative vegetable oils. RBD palm oil, as a more processed form of CPO, suits diverse food industry applications. Growing consumer preference for processed and packaged foods in Indonesia fuels RBD oil demand as a preferred manufacturing ingredient.
The market segments into conventional and organic categories, with conventional palm oil dominating revenue share in 2025. Conventional production prevails due to lower production costs and higher yields compared to organic alternatives, making it attractive to producers, particularly smallholders. Conventional palm oil offers extended shelf life, natural preservation properties in food products, and heat stability for cooking applications.
The organic segment is anticipated to experience rapid growth during the forecast period. This expansion reflects sustainable and environmentally conscious production methods that avoid synthetic chemicals. Despite organic products’ smaller market share relative to conventional alternatives, global demand increases due to heightened consumer awareness regarding sustainability and environmental concerns.
The food and beverages segment dominated the market with the highest revenue share in 2025, driven by extensive palm oil use in cooking oils, margarine, snack foods, baked products, and processed foods. Indonesia’s food and beverage industry maintains strong palm oil demand due to cost-effectiveness and versatility. Palm oil’s high-temperature stability makes it ideal for frying applications.
The biofuel and energy segment is expected to achieve the fastest CAGR during the forecast period. This growth stems from the global transition toward renewable energy sources, with palm oil biodiesel emerging as a viable alternative to conventional fossil fuels. Increasing biofuel demand creates lucrative export opportunities for Indonesian palm oil producers. The Indonesian government actively promotes carbon emission reduction and biofuel adoption in aviation, further driving market growth. In 2025, Indonesia launched its first regular commercial aviation route using palm oil-based sustainable aviation fuel.
Major market participants include Wilmar International, Provident Agro, Golden Agri-Resources, Astra Agro Lestari, and Asian Agri.
| Report Attribute | Details |
| Market size in 2025 | USD 15.42 billion |
| Revenue forecast in 2030 | USD 19.28 billion |
| Growth rate | CAGR of 4.6% from 2025-2030 |
| Base year for estimation | 2024 |
| Historical data | 2019 – 2024 |
| Forecast period | 2025 – 2030 |
| Quantitative units | Revenue in USD million/billion, and CAGR from 2025 to 2030 |
| Report coverage | Revenue forecast, company ranking, competitive landscape, growth factors, and trends |
| Segments covered | Product, application, nature |
| Country scope | Indonesia |
| Key companies profiled | Wilmar International; Provident Agro; Golden Agri-Resource; Astra Agro Lestari; Asian Agri; First Resources Limited; PT SMART Tbk; Musim Mas; PT Salim Ivomas Pratama Tbk; M.P. Evans Group PLC |
This report projects revenue growth at national and segment levels while analyzing industry trends across sub-segments from 2019 to 2030. The Indonesia palm oil market report segments include product, application, and nature categories:
What is the current size of Indonesia’s palm oil market?
Indonesia’s palm oil market was valued at USD 15.42 billion in 2025.
What is the projected growth rate for Indonesia’s palm oil market?
The market is expected to grow at a CAGR of 4.6% from 2025 to 2030, reaching USD 19.28 billion by 2030.
Which product segment leads Indonesia’s palm oil market?
Fractionated palm oil dominated with a 40.1% revenue share in 2025, driven by its versatility, broad industrial applications, economic advantages, and sustainability alignment.
Who are the leading companies in Indonesia’s palm oil market?
Major market players include Wilmar International, Golden Agri-Resources, Asian Agri, Astra Agro Lestari, and Provident Agro.
What factors drive Indonesia’s palm oil market growth?
Key growth drivers include expanding demand from food processing, cosmetics manufacturing, and biofuel sectors, supported by Indonesia’s position as the world’s largest palm oil producer and its significant economic contribution to the national economy.
