Prolonged Iran War to Have Positive and Negative Effects on Indonesian Palm Oil Exports - Think Tank

Tungkot Sipayung, the executive director of the Palm Oil Agribusiness Strategic Policy Institute (Paspi), said that the Iran war could raise crude palm oil (CPO) prices, thereby benefiting Jakarta, reported in The Jakarta Globe on March 27. Other vegetable oils have already shown increased prices and palm oil could follow with significant rise on extended war period. 

On the other hand, Indonesia’s palm oil exports mainly go to China, India, Pakistan, and Bangladesh — all regions “not significantly affected by the war”, hence minimizing the blow on the overall palm oil export performance, he said.  In 2025, Indonesia’s palm oil exports reached 177 countries. China was the main buyer, importing almost 6 million tons.  However, a prolonged war can affect global shipments, including those coming from Indonesia, according to Tungkot.

The Indonesian Palm Oil Producer Association (Gapki) admitted there had been logistics cost hikes following the conflict. Gapki chairman Eddy Martono said that the logistics and insurance costs had even soared by up to 50%.  “If the fighting lasts for up to three months, it will definitely affect our palm oil export performance. Importing countries will certainly reduce their CPO purchases. With a 50% increase in logistics and insurance costs, it seems to have inflicted a slight impact,” Eddy said. .