InfoSAWIT, JAKARTA – Rising prices of inorganic fertilizers over the past several years have not diminished optimism about the outlook for Indonesia’s palm oil industry. Instead, industry players are adapting by pursuing more efficient fertilization strategies, including the use of organic fertilizers and land application (LA) to support plantation productivity.
Azis Hidayat, Chairman of the Plantation Division at the Indonesian Palm Oil Association (GAPKI), said fertilizer prices remain one of the challenges facing the plantation sector. Higher chemical fertilizer costs can increase plantation maintenance expenses, particularly as companies and smallholders are expected to maintain productivity.
At the same time, however, the pressure has encouraged plantation operators to explore alternative and more efficient approaches to managing plant nutrition.
“Palm oil nutrient management does not always have to rely entirely on inorganic fertilizers,” Azis said at an event attended by InfoSAWIT in late May 2026.
According to Azis, the use of organic fertilizer is increasingly becoming part of fertilization strategies in palm oil plantations. One approach is land application, which enables organic materials to be utilized as part of nutrient management within plantation areas.
The use of organic fertilizer does not necessarily mean completely replacing chemical fertilizer. Instead, it can serve as a complementary approach to meeting crop nutrient requirements while helping companies and smallholders manage production costs more efficiently.
Higher Fertilizer Costs, but Palm Oil Production Continues to Grow
Azis said Indonesia’s palm oil production performance is one indication that the industry has the ability to adapt to rising production costs.
Despite fertilizer prices becoming a major concern for industry players over the past year, Indonesia’s palm oil production has continued to show growth.
The development indicates that plantation operators are actively responding to higher input costs. Innovations in plantation management, more efficient fertilization and productivity optimization continue to be pursued to maintain plantation performance.
“This shows that industry players continue to adapt through various innovations and more efficient plantation management strategies,” Azis said.
Nevertheless, Azis emphasized that the sustainability of the palm oil industry should not be viewed solely from the perspective of plantation companies. The condition of farmers and communities whose livelihoods depend on the plantation sector must also be considered when developing policies.
Rising production costs, combined with increasing household expenses, can create additional pressure on communities, including smallholder palm oil farmers. Policies related to the palm oil industry therefore need to take into account the ability of communities to cope with changing economic conditions.
Optimism Remains for Indonesia’s Palm Oil Outlook
Despite these challenges, Azis remains positive about the future of Indonesia’s palm oil industry. He said the sector continues to demonstrate strong resilience and remains an important contributor to the national economy.
Palm oil industry growth, estimated at around 7.2%, is viewed as one indication that the sector still has room to expand while maintaining its strategic role for Indonesia.
“Amid these various challenges, I remain optimistic about the outlook for Indonesia’s palm oil industry,” Azis said.
He added that if commodity prices remain at reasonable levels and market conditions stay favorable, the palm oil industry could maintain its position as one of Indonesia’s important sources of foreign exchange.
The contribution of palm oil extends beyond state revenues. The industry supports a broad economic chain encompassing plantation activities, trading, processing, transportation and economic activities in major palm oil-producing regions.
The sector also provides livelihoods for millions of families whose incomes are linked to palm oil plantations, both through corporate plantations and smallholder operations. (T2)
Source: InfoSAWIT Magazine, June 2026 edition.
