15 July 2025

U.S. President Donald Trump has officially announced import duties on goods from several countries into the United States. The import tariffs vary for each country. For Indonesia, the import duty to the U.S. is 32 percent, including crude palm oil (CPO).

According to Usli Sarsi, Vice Chairman of DPP APINDOSU for agriculture and plantations, the import duty imposed by President Donald Trump does not significantly affect Indonesia's CPO exports. Only Indonesia’s CPO exports to the U.S. will see a decline due to the high import duty.

"If we say there is a decrease, the answer is yes, but it only applies to exports to the United States. So overall, it doesn’t have much impact because some countries actually show an increase in Indonesia’s CPO exports," explained Usli, who is also the President Director of PT Mahkota Group Tbk.

Usli said that compared to other countries such as European nations, China, India, Pakistan, and others, the volume of Indonesia’s CPO exports to the United States is relatively small.

Based on data from Statistics Indonesia (BPS), since 2021, Indonesia’s CPO exports to India have increased by around 3 million tons with a value reaching US$ 3.28 billion. This figure continued to rise, reaching 5 million tons in 2022 valued at US$ 5.32 billion. The volume of Indonesia's CPO exports continued to grow in 2023 to 5.4 million tons, although the price of CPO declined, resulting in export earnings of only US$ 4.52 billion.

Still referring to BPS data, Indonesia’s CPO and derivative exports in 2024 show a significant trend. India remains the top export destination with 4.27 million tons, followed by Pakistan with 3 million tons. In third place is China with 2.36 million tons, the United States is fourth with 1.4 million tons, and Bangladesh is fifth with 1.02 million tons. Meanwhile, Egypt, Vietnam, Russia, Myanmar, and Saudi Arabia occupy positions six through ten.

"Currently, the demand for CPO and its derivatives remains very high. We hope that export destinations like India and Pakistan continue to grow, so that the import duty set by President Donald Trump does not affect Indonesia’s CPO export volume and revenue," Usli stated.

Competitiveness
 
As a leading commodity that generates income for Indonesia, the government must implement policies that facilitate CPO's ability to compete in the global market.

According to Usli, the burden on Indonesian CPO is already heavy due to both import duties from destination countries and export taxes from the Indonesian government.

He cited that the import duty for Indonesian goods, including CPO, to the U.S. is 32 percent, while Malaysia is only charged 25 percent. This difference in CPO import duty to the United States certainly benefits Malaysia, even though both Indonesia and Malaysia are major CPO exporters to the U.S.

The government should start gradually reducing Export Tax (Bea Keluar/BK) and Export Levy (Pungutan Ekspor/PE) on CPO and its derivative products (BPDPKS fund) so that the competitiveness of Indonesian CPO can regain strength in the international market.