Shifting Policies and Rising Costs in August 2025

Indonesia’s palm oil industry entered August 2025 under stricter export regulations that are reshaping global trade dynamics. The government set the crude palm oil (CPO) reference price at USD 910.91/MT, a 3.76% increase from July’s USD 877.89/MT. Alongside this, export duties rose to USD 74/MT, while levies reached 10% of the reference price, or USD 91.09/MT, in line with PMK 30/2025. These measures aim to stimulate domestic downstream processing, particularly in value-added oleochemicals, yet they also tighten the availability of raw materials for global buyers.

At this point, sourcing strategies become critical. Companies like Tradeasia International, a major distributor in palm-based raw materials and oleochemicals, play a central role in helping industries navigate such volatility. As the company often emphasizes, “palm is not just a commodity—it is the backbone of oleochemical innovation.” With higher levies pressuring exporters, reliable trading partners become indispensable for maintaining supply stability across PFAD, CPO, and refined glycerine.

The impact of these policy shifts quickly spilled into pricing across related feedstocks. PFAD and refined glycerine prices climbed in August, following the upward trajectory of CPO. Export volumes also showed constraints, as Indonesian CPO became less competitive internationally. These pressures are especially relevant for buyers in markets like the EU, which, despite expecting increased palm imports through the IEU-CEPA trade agreement, must now absorb higher costs or diversify sourcing channels to mitigate risks.

Strategic Reactions from Global Buyers

For many international buyers, the situation demands recalibration. Some are turning to alternative suppliers such as Malaysia to balance cost and availability, while others absorb the higher prices, betting that Indonesia’s export restrictions may be temporary. Regardless of approach, one constant remains: the need for agile procurement and vigilant price monitoring.

This environment presents both challenges and opportunities. While higher levies restrict short-term export competitiveness, they also accelerate Indonesia’s shift toward an oleochemical-driven industry, benefiting sectors like surfactants, cosmetics, and pharmaceuticals. For trading companies and downstream manufacturers, aligning with trusted suppliers and anticipating regulatory adjustments will be key to sustaining growth.

In conclusion, the August 2025 export policy adjustments—marked by rising reference prices and higher levies—have tightened global supplies and raised costs across PFAD, CPO, and refined glycerine. Buyers are actively diversifying, reassessing strategies, and leaning on established partners like Tradeasia International to weather uncertainty. The future of palm oil trade is no longer just about raw exports but about strengthening value chains that connect plantations, processors, and global end-users in a more integrated oleochemical landscape.

 

Sources:

  1. Indonesia Palm Oil Exports Analysis and Price Movements - https://www.palm-chemicals.com/blog/indonesia-palm-oil-exports-2025-levy-shift-price-dip

  2. Indonesian Government Report on Palm Oil Export Levies and Biodiesel Mandates -https://apps.fas.usda.gov/newgainapi/api/Report/DownloadReportByFileName?fileName=Oilseeds+and+Products+Annual_Jakarta_Indonesia_ID2025-0015.pdf

  3. Indonesia Palm Oil Reference Price and Export Levy Updates August 2025 - https://en.infosawit.com/news/16156/cpo-reference-price-for-august-2025-rises-to-us--910-91-per-ton--export-levy-reaches-us--91-09-per-ton