Indonesia Palm Oil Industry Synopsis
Globally, most of the palm oil is produced in Asia, Africa and South America because of the suitable weather
conditions in these regions. Indonesia is the largest palm oil producer in the world, followed by Malaysia and
Our analysts are of the opinion that the Indonesian palm oil industry has a pressing need to adhere to
sustainability norms and improve infrastructure, for the sector to attain high sustainable productivity.
Production of palm oil in Indonesia has been under criticism, as it is the primary reason for deforestation,
destroying the natural habitat of endangered animals and contributing to climate change. Though the sector
provides employment avenues, benefiting the local community, it is now imperative that various rules,
policies and initiatives introduced by the Indonesian Government to make the sector sustainable be strictly
In 2015, Indonesia would continue to be the leading palm oil producer globally, while the production in
Malaysia and Thailand is expected to be impacted by weather conditions. The sector’s growth is hampered
by the country’s poor infrastructure, which is responsible for low consumption of both palm oil and biodiesel
within the country. We believe that, with adequate government support and infrastructural development,
the Indonesian palm oil industry will continue growing through 2020.
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