Indonesia palm oil exports slump in March 2026 as China and India cut

Indonesia’s palm oil industry faced a sharp contraction in March 2026, with total exports falling 34.25% month‑on‑month to 2.168 million tonnes and the biggest drops in crude palm oil (CPO) shipments to China and India [1]. The decline came amid higher logistics costs, weaker overseas demand and a looming “one‑door” export regime slated for full implementation in 2027 [2].

Key takeaways

• March 2026 CPO production fell to 4.403 million tonnes, down 12.22% from February [1].
• Domestic palm oil consumption dropped 8.25% to 2.115 million tonnes in March [1].
• Exported CPO plunged 75.61% to just 96 000 tonnes, while overall palm oil exports fell 34.25% [1].
• China’s imports shrank by about 314 000 tonnes and India’s by roughly 291 000 tonnes in March [3].
• A government “one‑door” export system via PT Danantara Sumberdaya Indonesia (DSI) will be mandatory from Jan 1 2027, with a trial phase starting June 2026 [2].

Production and domestic demand under pressure

GAPKI data show that March 2026 output of CPO and palm kernel oil (PKO) combined reached 4.821 million tonnes, a 12.35% decline from the previous month [5]. The fall was driven mainly by a 12.22% drop in CPO, while PKO production slipped to 418 000 tonnes [1]. Domestic consumption also contracted, with total use falling 8.25% to 2.115 million tonnes. The biggest domestic declines were in the food segment (‑9.03%), biodiesel (‑7.71%) and oleochemicals (‑7.43%) [1].

Export slump hits key markets

Export volumes plunged across almost all product categories. CPO shipments collapsed by 75.61% to only 96 000 tonnes, down from 395 000 tonnes in February [1]. Processed palm oil exports fell 33.57% to 1.506 million tonnes, and refined palm kernel oil dropped 44.67% to 94 000 tonnes [1]. The only product line showing a modest rise was oleochemicals, up 1.42% to 468 000 tonnes [1]. Geographically, the sharpest export reductions in March were to China (‑314 000 tonnes) and India (‑291 000 tonnes), while Russia recorded a modest gain of 24 000 tonnes [3].

Policy shift and industry concerns

The government announced a “one‑door” export system for strategic commodities, including palm oil, to be fully enforced on 1 January 2027 after a pilot beginning 1 June 2026 [2]. Exporters must register through the Indonesia National Single Window (INSW) and list DSI as co‑exporter, though they may still trade with existing partners during the transition [2]. Officials say the scheme aims to curb data manipulation and close trade gaps that have generated billions of dollars in discrepancies with partner countries [2].

Why it matters

The March downturn highlights the vulnerability of Indonesia’s palm oil sector to external demand shocks, especially from its two largest buyers, China and India. Coupled with rising logistics costs and a pending export‑control regime, the slump could pressure farmgate prices, as already observed by farmer groups fearing lower TBS rates [4]. The government’s one‑door policy seeks to improve trade transparency, but its impact on market dynamics and farmer incomes will depend on how quickly the system is refined before the 2027 rollout. Continued monitoring of production, domestic consumption, and export trends will be essential to gauge the sector’s recovery trajectory.