Indonesia Fixes August Reference Price for Crude Palm Oil at $910.91/MT
Indonesia’s Trade Ministry has officially set the export reference price for crude palm oil (CPO) at $910.91 per metric ton for August 2025. The announcement, made earlier today, is part of the country’s monthly pricing mechanism used to determine export duties and levies on palm oil products. The move comes amid a backdrop of fluctuating global edible oil prices and renewed trade optimism between Indonesia and key importers like India.
Key Highlights from the Announcement
- August reference price for CPO fixed at $910.91/MT
- Price remains below the $930/MT threshold, keeping export duties relatively moderate
- Export levy remains at zero for August, continuing the temporary relief measure
- Indonesia aims to stabilize domestic inventories and maintain global competitiveness
Export Duty and Levy Implications
Indonesia’s export tax structure is tied to monthly reference prices. With the August price set below $930/MT, the export duty on CPO will fall within the $880–930/MT bracket, triggering a duty of $74/MT. However, the export levy—used to fund domestic biodiesel and cooking oil programs—remains suspended through August.
- Export duty on CPO: $74/MT
- Export levy: Zero (temporary suspension extended)
- Duties on refined palm olein and palm kernel shells also remain in lower bands
This pricing structure is designed to balance domestic supply stability with global competitiveness, especially as Indonesia seeks to maintain its position as the world’s top palm oil exporter.
India-Indonesia Trade Dynamics: A Strengthening Partnership
India, the world’s largest importer of edible oils, remains a critical market for Indonesian palm oil. Following
India’s decision to reduce import tariffs on CPO to 10 percent earlier this year, trade volumes are expected to rise.
- Indonesia exported 4.8 million tonnes of palm oil to India in 2024
- Forecast for 2025 exceeds 5 million tonnes, driven by tariff cuts and improved price parity
- Indonesia is also supplying 100,000 germinated palm seeds to support India’s cultivation expansion under the NMEO-OP initiative
The partnership between the Indonesian Palm Oil Association (IPOA) and the Indian Vegetable Oil Producers’ Association (IVPA) is expected to further enhance collaboration and address consumer concerns about palm oil’s health profile.
Market Reaction and Strategic Outlook
Global palm oil prices have traded below soybean oil since April 2025, improving competitiveness. The August reference price signals a stable outlook, though traders remain cautious amid regulatory shifts and sustainability scrutiny.
- Exporters anticipate steady demand from India, Middle East, and Africa
- Domestic producers benefit from lower levies, easing inventory pressure
- Biodiesel producers may see improved margins due to duty relief
Indonesia’s Trade Ministry is reportedly considering more frequent price adjustments to better reflect market volatility, a move welcomed by exporters seeking predictability.
Looking Ahead: Balancing Growth and Sustainability
As Indonesia continues to refine its palm oil policy framework, stakeholders are watching for signals on levy reinstatement, sustainability mandates, and export quota adjustments. The August reference price offers a window of stability, but long-term growth will depend on regulatory clarity and global demand recovery.
Sources: Economic Times Retail, Rediff Money, MSN India, Argus Media, Indonesia Trade Ministry Bulletin,
