21 October 2026, Jakarta: Indonesia, the world’s largest palm oil producer, is in the final stretch of a year-long transition that will hand control of nearly all palm oil derivative exports to state-owned trading entities by January 1, 2027, a structural shift that is already reshaping how exporters, traders and importing countries such as India plan for the months ahead.
The transition is governed by Trade Ministerial Regulation (Permendag) No. 16/2026, which took effect on June 1, 2026, replacing an earlier 2024 regulation, and covers crude palm oil, refined bleached deodorized palm oil, refined bleached deodorized palm olein, used cooking oil and palm residue. Under the rule, once full implementation begins on January 1, 2027, only state-owned export enterprises holding a valid Export Permit will be allowed to ship these products abroad. Private exporters can secure export rights either by participating in Indonesia’s domestic market obligation programme, tied to its Minyakita subsidised cooking oil initiative, or by formally transferring their export rights to one of the designated state enterprises.
Bayu Wicaksono Putro, acting director of agricultural and forestry product exports at Indonesia’s Trade Ministry, said at a briefing in Jakarta that the new rule keeps the regulated product list unchanged but is “tightly reining in” the distribution channel through which palm oil leaves the country. He said existing exporters would continue operating largely as usual through the transition period, which runs to the end of 2026, with the Coordinating Ministry for Economic Affairs leading a formal evaluation of the new system during its first three months.
October pricing shows the market still moving independently of the policy shift
Even as the structural transition unfolds, Indonesia continues to set its monthly crude palm oil reference price, the benchmark used to calculate export duties and levies. For October 2026, the government set the reference price at $1,042.15 a tonne, up 3.44%, or $34.64, from September’s $1,007.51, according to Indonesian trade data. That reference price translates into an export duty of $178 a tonne and an export levy of 12.5%, or roughly $130.27 a tonne, on CPO shipments this month. The reference price is calculated from a basket of three markets, the Indonesia CPO Exchange, the Malaysia CPO Exchange and the Rotterdam CPO port price, with the two sources closest to the median used when the spread between them exceeds $40, as it did this cycle.
Existing exporters are being allowed to keep using their current customs and foreign exchange reporting systems during the transition, and export documents will continue to be issued in their own names, though they will need to submit additional electronic reports to the newly designated state trading enterprises as the system shifts. Indonesia’s government has framed the changes as a way to strengthen state-owned exporters and give private businesses time to adapt, while insisting the overhaul is not meant to disrupt the country’s roughly $20 billion-plus annual palm oil export trade.
Why the shift matters well beyond Indonesia
Indonesia and neighbouring Malaysia together account for the large majority of global palm oil supply, and any structural change to how Indonesian exports are licensed and channelled has direct consequences for buyers worldwide, since palm oil is the most widely traded vegetable oil globally and a key input for food processing, cooking oil blends and, increasingly, biodiesel programmes. Centralising export approval through state enterprises introduces a new layer of administrative process between growers, crushers and overseas buyers, and the coming three-month evaluation period will be closely watched for signs of whether the new system creates bottlenecks or pricing distortions as it scales up toward full enforcement.
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