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The global impact of Indonesia’s export policy shift

admin — Thu, 28 May 2026 13:49:00 +0000

Indonesian President Prabowo Subianto (right) at the Parliament building in Jakarta on May 20, 2026.
| Photo Credit: AFP

In a major overhaul of trade policy, resource-rich Indonesia announced that key commodities can soon only be exported via a state-run agency. Speaking to Parliament on May 20, President Prabowo Subianto said the Government Regulation on Natural Resource Commodity Export Governance, as the measure is called, would mean that the Indonesian Government will be the sole exporter of natural resource products, beginning with palm oil, coal and ferro alloys.

The new policy requires the resource producers to sell their commodities to PT Danantara Sumberdaya Indonesia, a state-run agency under the sovereign wealth fund Danantara. From here, the agency will engage in transactions with foreign buyers, eradicating direct sales between private resource companies and international buyers.

“This policy will optimise tax revenue and state revenue over the management and sale of our natural resources,” Mr. Prabowo said. Analysts say the announcement signals a major tightening of the government’s grip over the Indonesian economy. Indonesia is the world’s biggest producer and exporter of palm oil and thermal coal, and a major source of nickel. The move has sent commodities markets into a frenzy, with experts warning that its impact will be felt globally. The centralisation is set to come into effect by September, with a transition period of at least three months beginning in June. Details of the plan including the legislation and members of the agency are yet to be announced.

In his address, Mr. Prabowo said Indonesia had lost over $900 billion in revenue over the past 34 years because of fraud and under-invoicing. The new mandate would give the state control over the tax revenue and pricing, while strengthening overall oversight to to minimise revenue leaks. Despite being resource-rich, Indonesia has struggled to convert that wealth into consistent economic growth, with state revenue-to-GDP at around 12%, whereas the Asia-Pacific average is 19.5%, and the OECD average is 33.9%. Increasing tax revenue and plugging leaks allows for investment into the country’s development goals and supports its reserves, which have taken a hit due to energy shocks from the war in West Asia. The plan’s State controlled pricing would also ensure fair transfer pricings. “If they don’t support our price, then they don’t have to buy it. We can use it ourselves,” Mr. Prabowo said.

Market response

Following Mr. Prabowo’s announcement, Indonesian stocks dropped to the lowest in over a year. The Jakarta Composite Index fell by 2.4% on May 20, with major declines in energy and mining firms.

Traders and buyers are still understanding the impact of the decision and how the immediate changes will unfold. The commodities in question are vital to daily life and found in products globally. Palm oil is used globally in everything from processed foods to cosmetics, and half of the world’s thermal coal exports in 2025 came from Indonesia, with China, India, Vietnam and the Philippines being the top importers. Shortages in LNG supply because of the standstill in Iran is further pushing Asian nations, like Japan and South Korea, to lean on coal to fill energy gaps. Fears around the new regulations are leading to private companies selling the resources, like palm oil, in bulk and at discounts, with India and Malaysia among the buyers.China, in particular, is a major buyer of Indonesian nickel pig iron, a cheap alternative that is used in stainless steel production. The mineral is also a key material used in electric vehicle manufacturing. Experts say that the Asian superpower, which has come to rely heavily on Indonesia for its critical minerals, is monitoring the situation closely. Ahead of Mr. Prabowo’s announcement, the China Chamber of Commerce in Indonesia, a group representing Chinese companies, wrote a five-page letter to the President, regarding their fears over the rise in “excessively stringent regulation, over-enforcement and even corruption and extortion by competent authorities.”

Concerns over the centralisation

In 2020, the then administration suddenly and immediately banned the export of raw nickel ore. The move intended to force global companies to invest in Indonesian nickel processing plants, thereby increasing the value of exports and bringing more revenue into the country. It was this move that led to Indonesia’s nickel dominance. Last year, Jakarta created Danantara, the country’s second sovereign wealth fund. The fund has become an instrumental part of Indonesia’s economic policy. However, it has done little to soothe investors about its commitment and staying power, especially in the face of political uncertainty and corruption risks.

Similar worries have been raised now. Private companies are expected to be hit hardest, as the state-run agency monopolises their role. Many also worry about how this will affect existing contracts and any limitations this will cause on Indonesia’s access to the global market.

Published – May 27, 2026 08:30 am IST

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India’s Palm Oil Imports Hit 14-Year Low

admin — Wed, 12 Feb 2025 11:31:06 +0000

Mumbai:

India’s palm oil imports in January fell to their lowest in nearly 14 years as refiners turned to cheaper soyoil, driven by negative refining margins for palm oil, a leading trade body said on Wednesday.

Lower palm oil imports by India, the world’s biggest buyer of vegetable oils, are likely to weigh on benchmark Malaysian palm oil prices and support US soyoil futures.

Palm oil imports in January fell 45% from December to 275,241 metric tons, the lowest since March 2011, the Solvent Extractors’ Association of India (SEA) said.

India imported an average of more than 750,000 tons of palm oil every month in the marketing year that ended in October 2024, according to the SEA.

Palm oil usually trades at a discount to soyoil and sunflower oil, but falling stocks have lifted its prices above rival oils, whose supplies are abundant.

Imports of soyoil in January increased 5.6% to 444,026 tons, the highest in seven months, and sunflower oil imports rose 8.9% to 288,284 tons, the industry body said.

Lower shipments of palm oil reduced the country’s total vegetable oil imports in January by 14.8% to 1 million tons, the lowest in 11 months, it said.

The drop in vegetable oil imports over recent months lowered vegetable oil inventories to 2.18 million tons at the start of February, the lowest since April 2022, the SEA said.

Palm oil imports could slightly increase in February from the multi-year low hit in January but will remain lower than usual, said Rajesh Patel, managing partner at GGN Research, an edible oil trader.

He said soyoil imports could fall and sunflower oil could rise marginally in February.

India buys palm oil mainly from Indonesia, Malaysia and Thailand, and imports soyoil and sunflower oil from Argentina, Brazil, Russia and Ukraine.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

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Lay’s Chips To Soon Have New Oil Blend? What It Means For Your Health

admin — Fri, 10 May 2024 11:36:59 +0000

Lay’s chips may soon use new oil blend. (Representational)

New Delhi:

PepsiCo, the brand that owns the famous potato chips Lay’s – has initiated trials to substitute palm oil with a blend of Sunflower Oil and Palmolein Oil in some of its products. The development surfaced after a post by social media influencer Revant Himatsingka about the food giant’s decision to reduce the use of palm oil in its chips.

“Big win! Lay’s India to reduce palm oil usage…After Lay’s stops palm oil, it will also put pressure on all other brands like Bingo, Haldiram to potentially replace palm oil!” he wrote on X.

PepsiCo, however, told NDTV that the trials started last year. “PepsiCo India initiated trials of a blend of Sunflower Oil and Palmolein Oil in certain parts of our portfolio last year, becoming one of the few players in the food industry in India to do so,” PepsiCo India Spokesperson said in a statement.

“PepsiCo is dedicated to producing high-quality, great-tasting products in every market where we operate. There are often different recipes for foods or drinks in different countries, which is attributed to several factors such as local preferences, manufacturing capabilities, ingredient availability and market dynamics. Ingredients are listed on every product we sell in India, allowing consumers to make conscious decisions about their purchases,” it added.

Mr Himatsingka also pointed to another video by him that highlighted that PepsiCo uses palm oil in the Indian product but not in the Lay’s USA.

Big win! Lay’s India to reduce palm oil usage!

Last month, I made a video showcasing how Lay’s India uses palm oil but Lay’s USA does not use Palm oil!

After a lot of public pressure, Lays India has set a public statement that they have begun the process to replace palm oil in… pic.twitter.com/qAJOUdNxhV

— Revant Himatsingka “Food Pharmer” (@foodpharmer2) May 9, 2024

PepsiCo Uses “Heart Healthy” Oil In US Products

On its US website, the company says that their chips are cooked in oils that may be considered “heart healthy” because they have at least “80% unsaturated fat, less than 20% saturated fat, and 0 grams of trans fat”. Sunflower, corn and canola oils contain “good mono- and polyunsaturated fats, which can help lower LDL bad” cholesterol and maintain HDL good” cholesterol level as part of a calorie-controlled diet”, it said.

Palm oil is an edible vegetable oil derived from the reddish pulp of the fruit of oil palms. The oil is used in food manufacturing, in beauty products, and as biofuel. Its use has attracted the concern of environmental and human right groups as the palm oil industry is a significant contributor to deforestation in the tropics where palms are grown, and has been cited as a factor in social problems due to allegations of human rights violations among growers.

Asian buyers traditionally rely on palm oil because of low costs but recently concerns have been raised over its use due to high saturated fat content in it. About 50% of palm oil is made up of saturated fat and a high intake of this type of fat can increase blood LDL or ‘bad’ cholesterol levels.

Difference Between Palm Oil And Palmolein

Although palm oil and palmolein are produced from the same plant, the main difference between them is their chemical state at room temperature. Semi-solid palm oil is used more frequently as fat in bakery products, whereas liquid palmolein is considered the “gold standard” and is the most widely used oil for frying in the world.

Sunflower Oil

Sunflower oil is often termed as a healthy oil because it contains polyunsaturated fatty acids which are essential fats beneficial for heart health. It is also one of the best dietary sources of vitamin E. However, according to several studies, varying the oil consumption with other varieties like olive, avocado and rapeseed may provide a better balance to diet.

Top Medical Body’s Dietary Guidelines

The development comes close on the heels of a set of 17 dietary guidelines by the Indian Council of Medical Research and National Institute of Nutrition (ICMR-NIN). It calls for the moderating intake of oil and fats and choosing a variety of oil seeds, nuts, nutri cereals and legumes to meet daily needs of fats and essential fatty acids (EFA).

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