Jakarta, Indonesia Sentinel — Indonesia and Malaysia, the world’s two largest palm oil producers, have reaffirmed their commitment to strengthening bilateral cooperation in the palm oil sector. Indonesian Trade Minister Budi Santoso accompanied President Prabowo Subianto on an official visit to Malaysia on January 27, 2025, where both nations underscored the importance of palm oil in global trade.
During the visit, President Prabowo highlighted the growing global demand for palm oil, stating that every country he visited expressed interest in the commodity. “Countries like Egypt, India, and Pakistan have all emphasized their need for palm oil,” Prabowo said in a joint statement with Malaysian Prime Minister Anwar Ibrahim at Kuala Lumpur’s Petronas Towers.
Trade Minister Budi Santoso echoed Prabowo’s remarks, emphasizing that Indonesia and Malaysia together account for 80% of the world’s palm oil production. He expressed appreciation for Malaysia’s continued support in strengthening cooperation within the industry. “Indonesia hopes to sustain this collaboration with Malaysia to counter emerging trade barriers against palm oil in various countries,” Budi stated on January 28, 2025.
Push for Palm Oil Expansion
Prabowo also advocated for increasing Indonesia’s palm oil plantations, arguing that palm oil is a strategic commodity crucial to global markets. “I believe we need to expand palm oil plantations. There is no need to fear allegations of deforestation,” Prabowo remarked during a speech at the National Development Planning Meeting (Musrenbang) at Bappenas on December 30, 2024.
He further claimed that oil palm trees help absorb carbon dioxide, pushing back against environmental criticism. “How can we be accused of wrongdoing when palm trees have leaves and absorb carbon dioxide?” he questioned.
Additionally, Prabowo urged local authorities, including regional leaders, law enforcement, and the military, to protect existing palm oil plantations. “Governors, district heads, military personnel, and police officers—safeguard our palm oil plantations. They are national assets,” he asserted.
Environmental Concerns and Criticism
Prabowo’s remarks sparked backlash from environmental activists, particularly Greenpeace Indonesia. The organization condemned the plan to expand palm oil plantations, arguing that it contradicts Indonesia’s commitment to reducing greenhouse gas emissions under the Paris Agreement, which the country ratified through Law No. 6 of 2016.
Iqbal Damanik, a forest campaigner at Greenpeace Indonesia, warned that palm oil expansion would accelerate deforestation and exacerbate climate change. “Clearing forests for palm oil plantations releases massive carbon emissions, worsening climate-related disasters such as droughts, floods, and wildfires,” Damanik stated in a press release on January 7, 2025.
Palm Oil Industry Growth
Despite environmental concerns, Indonesia’s palm oil industry continues to grow. According to the Indonesian Palm Oil Association (Gapki), the country’s crude palm oil (CPO) and palm kernel oil (PKO) production reached 4.8 million tons in October 2024, a 9.69% increase from September’s 4.4 million tons.
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Statistics from Indonesia’s Central Bureau of Statistics (BPS) show that in 2022, Indonesia produced 45.5 million tons of palm oil, accounting for 59% of global production. This solidified Indonesia’s position as the world’s largest palm oil exporter.
Malaysia follows as the second-largest producer, generating 19.3 million tons annually—about 25% of the world’s palm oil supply. Key importers of Malaysian palm oil include the European Union, Pakistan, China, and the United States.
As Indonesia and Malaysia deepen their cooperation in the palm oil sector, the debate over environmental sustainability versus economic benefits remains a critical issue on the global stage.
(Becky)
