Published on: 2025-04-13

Intelligence Report: Indonesia Palm Oil Firms Eye New Markets As US Trade War Casts Shadow – International Business Times

1. BLUF (Bottom Line Up Front)

Indonesian palm oil companies are actively seeking new markets in Europe, Africa, and the Middle East to mitigate the impact of potential US tariffs. The US trade measures have created uncertainty, prompting Indonesia to diversify its export destinations. Key recommendations include maintaining negotiations with the US and exploring alternative markets to sustain export levels.

2. Detailed Analysis

The following structured analytic techniques have been applied for this analysis:

General Analysis

Indonesian palm oil firms are responding to the US trade war by diversifying their market base. The imposition of a 32% tariff on Indonesian palm oil has prompted companies to explore new markets in Africa, the Middle East, Central Asia, and Eastern Europe. Despite a temporary 90-day pause on tariffs, the uncertainty remains high. Indonesia’s palm oil exports to the US have grown significantly, but the threat of tariffs necessitates strategic market diversification.

3. Implications and Strategic Risks

The potential imposition of US tariffs poses significant risks to Indonesia’s economy, particularly affecting the palm oil sector, which is a major export industry. The uncertainty may lead to decreased revenue for Indonesian producers and impact smallholder farmers. Additionally, regional stability could be affected if economic pressures lead to increased competition and trade tensions in Southeast Asia.

4. Recommendations and Outlook

Recommendations:

• Engage in diplomatic negotiations with the US to seek tariff exemptions or reductions.
• Expand market access initiatives in Africa, the Middle East, and Europe to reduce dependency on the US market.
• Implement technological advancements in palm oil production to increase competitiveness.

Outlook:

In the best-case scenario, successful negotiations with the US could lead to the removal or reduction of tariffs, stabilizing export levels. In the worst-case scenario, failure to secure alternative markets could result in significant economic losses. The most likely outcome involves a moderate decline in US exports, offset by increased sales in new markets.

5. Key Individuals and Entities

The report mentions significant individuals and organizations:

• Donald Trump
• Eddy Martono
• Sri Mulyani
• Mansuetus Darto
• Indonesian Palm Oil Association (GAPKI)
• Palm Oil Farmers Union (SPKS)