InfoSAWIT, JAKARTA — Indonesia may be the world’s largest palm oil producer, but experts warn that productivity, supply chain efficiency, and technological readiness remain below expectations—especially compared to Malaysia, which has advanced faster over the past decade.
The assessment was delivered by Umi Mu’Awanah, Head of the Economic, Industrial, Services, and Trade Research Center at BRIN. She argued that Indonesia’s palm oil industry is at a crossroads. With the government pursuing aggressive biofuel targets—from biodiesel to bio-jet fuel—the key question is whether Indonesia can dominate the entire value chain or remain a raw material supplier.
“We are the largest producer, but our pace in boosting productivity and technology is slow,” she noted.
The urgency increases as discussions on implementing B50 biodiesel continue, amid concerns over domestic feedstock capacity.
Much of Indonesia’s machinery and processing technology remains imported, while local research potential remains underutilized. Umi urged the strengthening of research innovation ecosystems involving government, industry, academia, financial institutions such as BPDP, and researchers.
“Research must not remain on paper. It must answer real industrial needs—from higher yields and more efficient processing to accelerated downstreaming,” she said during an event attended by InfoSAWIT in early October 2025.
She emphasized palm oil’s crucial role in sustainable energy and national resilience, noting the need for integrated research strategies addressing productivity, environmental concerns, and waste mitigation.
Global competition is intensifying, and sustainability standards continue evolving. Without concrete execution, Indonesia risks losing its competitive edge despite immense potential.
“It’s time for Indonesia’s palm sector to move up the value chain—not just as an export commodity, but as a strategic pillar of national energy security and economic sustainability,” Umi asserted.
