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PalmTrack—Sep 2022 Wrap Up
PalmTrack—Sep 2022 Wrap Up

Indonesia

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Indonesia's policy, growth, and political-economic shifts

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The robust nature of Forest management policies from Jokowi to the Prabowo Regime

According to the Haze Outlook 2025, the Prabowo administration is set to continue Indonesia’s forest governance by building on the policies established under President Jokowi. Key measures carried over include:

  • The establishment of the Peatland Restoration Agency and the continuation of its restoration targets.

  • High-profile rulings and prosecutions of companies responsible for fires, setting a precedent for the high cost of non-compliance.

  • Jokowi’s commitment to achieving a net carbon sink in the forestry and other land use (FOLU) sector by 2030, along with the issuance of carbon pricing and trading regulations, has opened the door to carbon credit generation through ecosystem conservation and restoration projects.

Under Prabowo, it is hoped that this enforcement remains in fire monitoring and land-use compliance, even as the government shifts economic priorities toward domestic food and fuel production.

The Realities: Rapid Growth and Agricultural Expansion with Environmental Protection

The Prabowo administration has set a target of 8% GDP growth by the end of his first term, part of a broader vision to transition Indonesia into a high-income economy by 2045.

Yet, as the Haze Outlook 2025 notes, this goal presents a difficult balancing act. Indonesia enters this next phase of development with limited fiscal space and relatively high debt levels, even before factoring in the added strain of recent global economic uncertainty. While initiatives such as free school meals may help stimulate domestic consumption and economic growth, they also risk placing additional pressure on public spending.

Palm oil remains central to Indonesia’s economic strategy, contributing 2.5–5% of GDP and supporting 16 million jobs. However, the report warns that “this intensifies the need to manage competing demands: boosting food security, meeting energy needs, and sustaining export revenues, all while avoiding environmental degradation.” 

The Outlook further notes, the administration must ensure that agricultural development moves in step with meaningful environmental protection. Several policy initiatives now underway will serve as critical tests of whether this balance can be maintained.

The future of Indonesia through Agrinas, Papua, and Biofuel mandates, amidst constrained fiscal space, high debt levels

Central to the Prabowo administration's development strategy is Agrinas, a new state-owned enterprise formed through the merger of three companies and backed by the Danantara sovereign wealth fund. The Haze Outlook 2025 notes that Agrinas Palma Nusantara aims to manage up to one million hectares of plantations, potentially accounting for 6–7% of national palm oil output. This reflects a broader push to consolidate land control and accelerate downstream industrialization.

The report also highlights Indonesia’s plan to raise its biodiesel blend from B35 to B40 in early 2025, “consuming palm oil volumes comparable to major export markets like the US and EU.” A B50 target is set for Prabowo’s term, alongside the introduction of E5 bioethanol in gasoline by 2026, policies aimed at bolstering energy security and domestic palm oil demand.

Papua is identified as a strategic frontier for agricultural and energy expansion. However, the report cautions that “high land costs and the need to respect indigenous rights and sustainability” must be taken into account.

Despite these ambitions, fiscal constraints and high public debt limit the government’s capacity to fully fund sustainability efforts. At the same time, the expansion of agriculture, food security programs, and biofuel mandates continues to place pressure on land use and forest governance.

The Outlook underscores the central challenge ahead: balancing economic growth, energy and food security, and environmental protection without undermining fire prevention and emissions reduction targets.

The Annual Haze Outlook Report 2025 can be found here. Part 1 of the analysis of the Haze Outlook report 2025 can be found here.

Reach us at khorreports[at]gmail.com

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Outlook on forest fires, market indicators, farmers, and EU trade compliance

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The Shift from Low to Medium Haze Risk in 2025 (Transboundary Haze in Sumatra)

The Haze Outlook 2025 has raised the regional risk level from green (low risk) to amber (medium risk), citing elevated agricultural prices, an uptick in deforestation, and economic and policy shifts driven by pressure to boost agricultural output for food security as attributes to this change.

Key points to note from the report:

  • While deforestation declined between 2017 and 2022, it has increased again from 2023 into 2024, particularly in Sumatran provinces near Singapore and Peninsular Malaysia, where fire activity surged in July 2025.

  • Despite forecasts of a shorter dry season, hotspots and smoke haze in parts of Sumatra in mid-July have already affected air quality in parts of Peninsular Malaysia, indicating that fire risk remains elevated even under average weather conditions.

With climate trends pointing to another unusually dry season between 2027 and 2030, and structural drivers like land clearing and commodity demand continuing to fuel haze episodes, the report recommends prioritizing sustainability measures “to avoid creating more fire-prone conditions.”

The surging of commodity prices with deforestation on the uptick (Most especially, palm oil prices surpassing soybean)

Linked to these structural pressures, the Outlook notes that agricultural commodity prices, especially for palm oil, have surged due to supply failing to keep pace with rising global demand.

According to the report, palm oil from Indonesia and Malaysia, typically the world’s cheapest vegetable oil, has traded above soybean oil prices at key destinations for nine consecutive months, an unprecedented trend. This price surge is significant because historical spikes in commodity prices have often preceded increased deforestation in subsequent years. 

Although the rate of primary forest loss between 2015 and 2019 remained largely flat or declined despite fluctuations in commodity prices, the report notes that the current cycle may differ: “estimates show some uptick in deforestation in Indonesia from 2023–2024.”

Will EUDR be further delayed to 2028? How will smallholders cope with these regulations

The report also highlights the approaching enforcement of the European Union’s Regulation on Deforestation-free Products (EUDR), scheduled to take effect for large companies on 30 December 2025. The regulation targets seven commodities, palm oil, soy, wood, cocoa, coffee, cattle, and natural rubber, and requires proof that imports are not linked to deforestation after 31 December 2020.

According to the report, key developments related to the EUDR include:

  • The regulation imposes strict reporting requirements, which critics argue may exclude smallholder farmers unable to meet compliance standards.

  • In response, the EU has simplified some administrative rules, allowing annual submissions and reuse of due diligence statements for reimported goods, cutting estimated compliance costs by 30%.

  • Indonesia and Malaysia have developed national digital platforms to provide legality and traceability data, while respecting data protection laws. These systems aim to support smallholders and enable international buyers to file EUDR-compliant submissions through national dashboards.

  • Indonesia has urged the EU to postpone full implementation until 2028 to allow more time for preparation and alignment across all stakeholders.

The report suggests that while the EUDR aims to curb deforestation linked to commodity trade, its real-world impact will depend on how effectively origin countries and the EU implement and enforce these measures, especially regarding smallholder inclusion.

The Annual Haze Outlook Report can be found here.

Reach us at khorreports[at]gmail.com

PalmTrack—Sep 2022 Wrap Up

Here is a wrap up of the some of the issues PalmTrack covered in Sep 2022:

  1. Malaysia plantation labour issues seem to be escalating. There is now worrying talk about destination market checks and signs that at-risk suppliers are facing buyer jitters. Indonesia suppliers may gain. This is amidst heightened problems for authorities to deal smoothly with migrant labour recruitment compliant with Indonesia, Bangladesh, and other requirements.

  2. Going by Malaysia’s palm oil production in the last 15 years, it is clear that yield-productivity management is in a major rut, a warning to producers in other countries. The more recent ups-and downs seem to be driven more by the climate cycle of El Niño dry/La Niña wet than anything else, at least at the aggregate level. Read more on PalmTrack.

  3. HCPO or high FFA CPO is the big new trend at palm oil mills. The processing of loose and rejected fruits gives a product with 35-40% FFA that suits HVO and more. But Malaysia’s unfavourable pricing for loose fruit is likely to hinder its supply. Indonesia prices a premium for loose fruits and buyers should see better prospects here. We talked to specialists to find out more.

  4. BOM officially declared a La Niña on 13 Sep 2022. However, the meteorological agency has stated that projections indicate this third dip to be short-lived and is expecting the phenomenon to peter out by early 2023.

  5. The EU Parliament has adopted the proposal on deforestation-free products. The regulation aims to eliminate deforestation in the import supply chain for the EU for several key commodities and products, including palm oil and soy.

Khor Reports’ PalmTrack is an independent research service that tracks palm tanker movements and reports trade of palm products (and shipments, upon request) for selected trade routes. It features a forward-looking market topic and sharp analysis every quarter, e.g. palm biofuels issues & opportunities for Jan–Mar 2022. Subscribe now!

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PalmTrack—Aug 2022 Wrap Up

Here is a wrap up of the some of the issues PalmTrack covered in Aug 2022:

  1. The rise and fall of key agri-food commodity prices feels like a blast from the past, but many prices remain at multi-year elevated levels, notably fertilizers and also the likes of palm oil. In this two-part series, we look at recent news views from The Economist, FAO, and what some say about the 2008/09 price bubble and food speculation in Part 1 before moving on to what commodity traders say about the role of "non-commercial traders” in the recent early 2022 food price bubble in Part 2.

  2. PalmTrack has been updating on recent and upcoming palm oil sustainability issues. There are three parts to this series, and each highlight the following points of interest gathered from close observers: greenwashing, legality, product pricing for smallholders (fair trade), traceability to farms, carbon emissions, and political-policy challenges.

  3. In our posting ‘Sarawak CPO production to overtake Sabah’, we covered the forecast for Sarawak to be the biggest CPO producing state in Malaysia, the timber-to-palm transition of its big state suppliers, and the decline of its timber business segment, especially downstream amidst log supply woes. Now, we look at market access and dip into some issues for Sarawak timber and palm supplies.

  4. Our latest discussion with labour experts revealed a wider regional competition for agricultural workers rising and expanding. We expect the Covid recovery to drive change toward a more formal and compliant agricultural labour supply. We case study Australia, who are reportedly now focusing on Indonesia and Oceania, and Taiwan who has opened up for agricultural labour workers from Southeast Asia in 2020.

  5. BOM raised a La Niña alert on 16 Aug, the final step before an official La Niña. In the meantime, BMKG on 12 Aug revealed that while the dry season in Indonesia is expected to last from August to October, La Niña may still result in heavier-than-usual rainfall within the country.

Khor Reports’ PalmTrack is an independent research service that tracks palm tanker movements and reports trade of palm products (and shipments, upon request) for selected trade routes. It features a forward-looking market topic and sharp analysis every quarter, e.g. palm biofuels issues & opportunities for Jan–Mar 2022. Subscribe now!

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PalmTrack—Jul 2022 Wrap Up

Here is a wrap up of the some of the issues PalmTrack covered in Jul 2022:

  1. The 2022 Trafficking in Persons (TIP) Report was released recently, and Malaysia remains at Tier 3 for a second year. In this two part-series, we look at key excerpts of the report, which should give a sense as to what national policy and implementation could or should be as well as other non-Western labour standards Malaysia is struggling with.

  2. Palm oil price is looking to find a footing with the ramp up of Indonesia domestic demand via an expanded biodiesel mandate whereby Indonesia plans to implement B35 in biodiesel by end of July. In another two part-series, we contemplate two questions: with demand side worries abound amidst inflationary and other concerns, what are some of the economic issues and is there demand destruction with 4–10% contractions?

  3. Malaysia made a confusing price control lift, with rapid response among politicians on maintaining subsidies. But there is little regard on the leakage from the billions that go into food subsidies. Read our post for our full analysis.

  4. BOM reported on 5 Jul that there is about a 50% chance of La Niña occurring later in 2022. BMKG made similar a forecast, warning that Indonesia may face heavier-than-usual rainfall up until the end of 2022.

Khor Reports’ PalmTrack is an independent research service that tracks palm tanker movements and reports trade of palm products (and shipments, upon request) for selected trade routes. It features a forward-looking market topic and sharp analysis every quarter, e.g. palm biofuels issues & opportunities for Jan–Mar 2022. Subscribe now!

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PalmTrack—June 2022 Wrap Up

Here is a wrap up of the some of the issues PalmTrack covered in May 2022:

  1. Neste Oyj is a leader in HVO-SAF products using 95% waste/residue input (bio)share—that's a bit different from co-processed HVO-SAF. We looked at recent news on its margins, deals, and Singapore expansion.

  2. The shock of the Russia-Ukraine conflict added tremendous pressure to the already tight vegoil, grains and input markets. We listened in on a global fertilizer briefing, and it seems like markets have gotten used to and are indeed getting over the conflict impacts. We also took a look at what observers are saying about freight rates and port congestion, which are of relevance to agricultural inputs.

  3. How quickly prices move and relative prices can reverse, with palm oil now cheaper than gas oil and making voluntary blending viable! We chatted with a trader to find out what’s been happening and what’s next in the violent price correction, and another on potential demand-side issues in energy demand and Chinese restocking. 

  4. The US CBP conducted a virtual workshop on forced labour facilitated by MPOC on 8 June, which provided a guide as to how the agency generally enforces its anti-forced labour tools, as well as how it modifies and revokes imposed export bans. 

  5. There were several updates in the palm industry in the week of 10 June, including Indonesia allowing exporters not on its list of companies approved for bulk cooking oil distribution to ship palm oil subject to a extra charge on top of the existing export tax and levy.

Khor Reports’ PalmTrack is an independent research service that tracks palm tanker movements and reports trade of palm products (and shipments, upon request) for selected trade routes. It features a forward-looking market topic and sharp analysis every quarter, e.g. palm biofuels issues & opportunities for Jan–Mar 2022. Subscribe now!

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PalmTrack—May 2022 Wrap Up

Here is a wrap up of the some of the issues PalmTrack covered in May 2022:

  1. We’ve been updating a lot on the changed political-policy landscape for Indonesian palm oil. Note that the Jokowi administration has been struggling to get cooking oil at the right price to Indonesia consumers for months, toggling between the export-restricting DMO-DPO rules and export duty/levies. 

  2. Experts expressed surprise at Indonesia’s intentions to reimpose a domestic sales requirement effective 31 May 2022. CIMB in its agribusiness brief dated 23 May expects the potential impact of the regulation to depend on the new volumes and price obligations set by the government, it is overall still too early to conclude how the DMO will impact the market and/or palm oil players due to the lack of details.

  3. Weather and rainfall: On notable rainfall events (30 days to 11 May 2022), 30 days accumulated rainfall was est. above 500mm in Central and East Kalimantan, where a significant area has within those regions recorded an accumulated rainfall of est. above 500mm. On 13 May, BMKG issued a warning of heavy rainfall accompanied by storms and strong winds for several Indonesian provinces, including Aceh, and West and South Sumatra.

  4. Tankers from Indonesia: Port calls for 25 Apr–8 May 2022 (14 days) count, c.50 palm-related tankers, with sample net tonnage c.295k (versus 14 days to 10 Apr, c.60 tankers with sample net tonnage c.330k). These two weeks (25 Apr–8 May), the share of port calls was higher for European ports; conversely, the share is lower for CIS and American ports (versus 14 days to 10 Apr).

  5. On 7 May, the Indonesian navy seized its third vessel, the Mathu Bhum, after seizing two others, the World Progress and Annabelle, a week earlier. A review of the Mathu Bhum’s movement shows that the vessel was doing unloading/loading operations on 7 May 2022 at Belawan’s container port.

Khor Reports’ PalmTrack is an independent research service that tracks palm tanker movements and reports trade of palm products (and shipments, upon request) for selected trade routes. It features a forward-looking market topic and sharp analysis every quarter, e.g. palm biofuels issues & opportunities for Jan–Mar 2022. Subscribe now!

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Indonesia Lifts Palm Oil Export Ban

Indonesia has lifted its palm oil export ban following an announcement made by President Joko Widodo today on 19 May. Exports of CPO and other refined products, including cooking oil, may resume on 23 May this Monday.

According to the President, the decision to lift the said ban was made in consideration of the welfare of the 17 million workers in the palm oil industry in spite of the fact that cooking oil has not reached the target price of Rp14,000 per litre, although bulk cooking oil has reportedly reached more than national needs. In the meantime, the government will continue monitoring the supply and price of cooking oil. The government had been facing mounting pressure to reopen its export routes since the implementation of the ban on 28 April.

PalmTrack—April 2022 Wrap Up

Here is a wrap up of the some of the issues PalmTrack covered in April 2022:

  1. Indonesia’s palm oil export ban: Indonesia has recently banned the export of palm oil. The ban encompasses several products—CPO, PAO, POME, RBDPL, RBDPL, RBDPO, and UCO—coming to a total of 12 HS codes. We turned to several sources following news of three executives of key palm companies and a senior bureaucrat charged in connection to the country’s cooking oil crisis that occurred just ahead of the ban, with one stating that “[t]he image of the industry is bad. If it is true, it has to be proved in court, but it is as if the whole industry is guilty.”

  2. Palm’s Animal Feed Hopes: Biomass from oil palm trees have important uses, but current uses are not always considered optimal by the palm industry. Key applications include empty fruit bunch (EFB) and fronds as mulch in plantations, liquid waste for biogas, PKM as mixture for fodder (for ruminants - cows) and other wastes for fertilizers. PalmTrack has published two posts on this—one on feed for dairy cattle, and the other on chicken feed.

  3. Weather and rainfall: On notable rainfall events (30 days to 11 Apr 2022), 30 days accumulated rainfall was est. above 300mm all across most of Borneo, South & Southeast Sulawesi, and smaller areas of central Peninsular Malaysia. The Australian BOM issued a weather project on 12 Apr 2022, with predictions that La Niña is expected to eventually return to neutral in the southern hemisphere in autumn or early winter.

  4. Tankers from Indonesia: Port calls for 28 Mar–13 Apr 2022 (14 days) count, c.60 palm-related tankers, with sample net tonnage c.330k (versus nearly two months ago, 14 days to 13 Mar, c.60 tankers with sample net tonnage c.297k). These two weeks (28 Mar–13 Apr), the share of port calls was higher for ASEAN (other than Malaysia and Singapore), CIS, and South Asian ports (versus 14 days to 13 Mar).

  5. Prices, projections, and policy jitters: Many in the palm oil world are familiar with the three Gurus of palm oil outlook: Fry (my ex-boss), Mielke, and Dorab. We covered their views (and that of others) from the big KL Price Outlook Conference (POC) 2022 powwow.

Khor Reports’ PalmTrack is an independent research service that tracks palm tanker movements and reports trade of palm products (and shipments, upon request) for selected trade routes. It features a forward-looking market topic and sharp analysis every quarter, e.g. palm biofuels issues & opportunities for Jan–Mar 2022. Subscribe now!

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PalmTrack—March 2022 Wrap Up

Here are the snippets of some of the news PalmTrack covered in March 2022:

  1. Cooking oil angst and Indonesia export policy flip-flop: Indonesia export rules have flip-flopped, with a new export restriction recently abandoned in favour for a higher export levy. Looking more recently (c. 15 March), cooking oil prices in Indonesia have not fallen and some shops have taken to limit purchases were to two litres per person to address supply concerns, with long queues for cooking oil across the country as stocks rapidly diminish. Over in Malaysia, there also some problems, with rationing of subsidised cooking oil and some empty shelves for these plastic-bagged cooking oil

  2. Update on the Sime Darby Plantations (SDP)-USCBP conundrum: CGS-CIMB reports that SDP is optimistic about the improvements the company has made with regard to its labour practices throughout its supply chain in Malaysia and is planning to submit an independent assessment report on these improvements to the US CBP by Mar 2022.

  3. Tankers from Indonesia: Port calls for 28 Feb–13 Mar 2022 (14 days) count, c.60 palm-related tankers, with sample net tonnage c.297k (versus nearly two months ago, 14 days to 23 Jan, c.60 tankers with sample net tonnage c.360k). These two weeks (28 Feb–13 Mar), the share of port calls was higher for CIS, European, and South Asian ports (versus 14 days to 9 Jan).

  4. Weather and rainfall: Australia’s BOM headlines “La Niña retreat stalls as trade winds strengthen” on 15 Mar 2022, but details that the event has passed its peak. On notable rainfall events (30 days to 13 Mar 2022), 30 days accumulated rainfall was est. above 300mm all across central and east Peninsular Malaysia, across the northern and eastern areas of Sumatra, Sarawak, north-east Sabah, and some eastern parts of Kalimantan.

  5. Iceland has announced a reversal of the supermarket chain’s removal of palm oil product (since 2018) amidst a shortage of sunflower oil. Citing it as an “unintended consequence of the [Russia-Ukraine] war,” CEO Richard Walker states that the move is only “a last resort and as a strictly temporary measure.” The U-turn comes amidst calls for urgent action in anticipation of rising food prices and shortages.

Khor Reports’ PalmTrack is an independent research service that tracks palm tanker movements and reports trade of palm products (and shipments, upon request) for selected trade routes. It features a forward-looking market topic and sharp analysis every quarter, e.g. palm biofuels issues & opportunities for Jan–Mar 2022. Subscribe now!

$380.00
Every year
$38.00
Every month