The imposition of a 19% import tariff does not scare the palm oil industry. In fact, they are confident that Indonesia'scrude palm oil exports to the United States are still promising despite the 19% tariff that came into effect on August 7, 2025.

Chairman of the Indonesian Palm Oil Association (Gapki) Eddy Martono said that Indonesia was lucky because the import tariff that was planned to be 32% has been reduced to 19%.

After all, Gapki still hopes that the government will continue to negotiate with the US Government to reduce import tariffs to 0%.

Based on Gapki data, in the last five years, Indonesian palm oil exports to the United States have shown an increasing trend. In 2020, the export volume reached 1.5 million tons. Then, it increased to 2.5 million tons in 2023, although it declined slightly to 2.2 million tons in 2024.

The value of palm oil exports in 2024 reached US$ 2.9 billion, with Indonesia's market share in the US reaching 89%.

"Palm oil is the main ingredient of the food industry in America, such as margarine, which cannot be replaced by other vegetable oils," Eddy told SUAR on August 5, 2025.

"Palm oil is the main ingredient of the food industry in America, such as margarine, which cannot be replaced by other vegetable oils," Eddy said.

Need for market diversification

After all, palm oil entrepreneurs cannot rely solely on existing markets, while global conditions are plagued by uncertainty. So, Eddy emphasized the importance of market diversification, especially in anticipation of the possibility of further trade wars that could affect other markets such as China and the European Union.

"Latin America and Africa are alternative markets that are being explored," Eddy said.

He also expressed concern over the risk of a global recession that could depress export demand in general. Thus, he emphasized the importance of a strategy that is not only reactive to the US, but also anticipatory of global dynamics.

One example of a company that is able to show resilience and positive growth amid these conditions is PT Astra Agro Lestari Tbk (AALI).

PT Astra Agro Lestari Tbk (AALI) made a positive performance throughout the first semester of 2025, with significant growth, both in terms of revenue and net profit. The financial report as of June 30, 2025 recorded a jump in net profit to Rp 702.12 billion.

President Director of Astra Agro Lestari Tbk (AALI) Djap Tet Fa said that the figure jumped by 40.13% year-on-year (YoY) from Rp 501.04 billion in the same period the previous year. This increase also hoisted basic earnings per share to Rp 364.80; from previously Rp 260.32.

"The profit growth is in line with AALI's net income which shot up 40.05% YoY to Rp 14.44 trillion, compared to Rp 10.31 trillion in the first semester of 2024," he said in an official statement received by SUAR on August 5, 2025.

For AALI, the sale of crude palm oil and its derivatives is still the backbone of its revenue, with the value being boosted from IDR 9.63 trillion to IDR 12.81 trillion.

Sales of palm kernel and its derivatives also jumped sharply to Rp 1.60 trillion, from only Rp 643.60 billion previously. Meanwhile, contribution from other income was recorded at Rp 22.16 billion.

Indonesia is the world's largest producer and exporter of CPO and the second largest producer of coconut. The palm oil industry has played a vital role in the national economy. Not only as the largest contributor of foreign exchange from the non-oil and gas sector, but also as a source of livelihood for millions of workers.

The palm oil industry has always played a vital role. Not only as the largest contributor of foreign exchange, but also as a source of livelihood for millions of workers.

Most CPO products from Indonesia are exported to countries such as India, China, and the European Union. However, the industry faces complex challenges - especially in relation to environmental issues.

Oil palm clearing is often criticized for causing deforestation and loss of habitat for animals in forest areas.

In addition, geopolitical dynamics and trade policies of destination countries also affect the stability of the Indonesian CPO market, thus encouraging industry players to continue to adapt and look for alternative markets.

Push for ISPO certification

The government, as the regulator, is trying to strengthen its commitment to sustainable palm oil management through various strategic steps. One of them is by issuing Presidential Regulation Number 16 Year 2025.

This regulation is an important step in expanding the scope and strengthening the Indonesian Sustainable Palm Oil (ISPO) certification system.

Ratna Sariati, Chairperson of the Substance Group for the Application and Supervision of Plantation Product Quality, Ministry of Agriculture, explained that ISPO is not just a label, but a comprehensive system that ensures that oil palm businesses are carried out in an economically viable, socio-cultural, and environmentally friendly manner and in accordance with laws and regulations.

"ISPO certification is written evidence that the management of oil palm plantations has met these sustainability principles so as to encourage export sustainability," he told SUAR recently.

The legal basis of ISPO refers to Law No. 39/2014 on Plantations, specifically Articles 2, 3, and 62.

Its implementation is outlined in Presidential Regulation No. 44/2020, which is now updated to Presidential Regulation No. 16/2025. This change includes an expansion of the scope from upstream to downstream, including the processed and bioenergy industry sectors.

Thus, ISPO is not only the responsibility of the Ministry of Agriculture, but also involves the Ministry of Industry (MoI) for the downstream sector and the Ministry of Energy and Mineral Resources for bioenergy.