The Indonesia Edible Oil Market, valued at IDR 53,298.8 billion in 2022, is expected to reach IDR 62,070.5 billion by 2027. Explore growth drivers, market insights, and competitive trends.
Market Overview
Indonesia Edible Oil Market Overview
The Indonesia Edible Oil Market reached a market size of IDR 53,298.8 Bn with a CAGR of 19.6% during the historic period 2017–2022. The Indonesia Edible Oil Market is expected to reach a market size of IDR 62,070.5 Bn by 2027 with a CAGR of 3.1% during the forecast period 2022–2027. Technological advancements, rise in palm oil exports, and the growth of the food manufacturing sector are some of the major growth drivers of the Indonesia Edible Oil Market. Salim Ivomas Pratama, SMART Tbk PT, Bina Karya Prima PT, Multimas Nabati Asahan PT, and Sari Agrotama Persada PT are some of the major players in the Indonesia Edible Oil Market.
Indonesia Edible Oil Market Definition
Definition of Edible Oil Market: In this report, Indonesia Edible Oil Market has been defined as the sum of total revenue generated from all types of edible oil in Indonesia (excluding exports). The market is segmented by type of oil (palm oil, olive oil, soy oil, corn oil, others), by retail channels (retail offline, retail e-commerce), by sales channel (small local grocers, retail e-commerce, convenience stores, hypermarkets, supermarkets). The report encompasses of all the major players such as Salim Ivomas Pratama, SMART Tbk PT, Bina Karya Prima PT, Multimas Nabati Asahan PT, and Sari Agrotama Persada PT. Additionally, the report will analyze market future projections, industry analysis, and key factors influencing Indonesia Edible Oil Market Oil Market.
Taxonomy
Indonesia Edible Oil Market Ecosystem
Indonesia Edible Oil Market Size (Revenue in IDR Bn), 2017-2022
The significant growth of the Indonesia edible oil market from IDR 21,785 billion in 2017 to IDR 53,298.8 billion in 2022 can be attributed to several key factors. Firstly, Indonesia's growing population and rising income levels have led to increased consumption of edible oils for cooking and food processing purposes. Additionally, the expanding food processing industry and the rising popularity of packaged and convenience foods have driven demand for edible oils. Furthermore, the government's supportive policies and initiatives to promote the agricultural sector, including palm oil production, have contributed to market growth. The highest annual growth rate of 52% in 2022 reflects a culmination of these factors, coupled with robust market demand and favorable economic conditions. The compound annual growth rate (CAGR) of 19.6% over the historic period underscores the sustained and rapid expansion of the market, indicating its resilience and potential for future growth.
Indonesia Edible Oil Market Industry Analysis
Technological Advancements benefits Indonesia Edible Oil Market
The Indonesian edible oil market has grown majorly due of technological improvements. In 2022, investments in technology reached USD 50 million, a 15% rise from the year before. In 2023, these expenditures had increased productivity by 12%, making the industry more competitive on the international stage. The demand for processed oils has increased as a result of the better product quality and nutritional content brought about by the implementation of modern oil extraction technology. Sales of premium speciality oils increased by 20% in the Indonesian edible oil industry in 2021, which was indicative of consumer preferences for healthier and more specialized oil products. Technical developments' impact on the Indonesian edible oil market includes enhanced effectiveness, as the edible oil business in Indonesia has reduced energy consumption by 10% and water usage by 15% as a result of adopting sophisticated oil extraction technology, which has improved sustainability and reduced costs. Product innovation has also been significant, with new goods such as specialty oils and fortified oils, which together accounted for 25% of the industry's revenue in 2022, having been developed as a result of technological integration in the Indonesian edible oil market. Additionally, supply chain improvement has occurred, with 20% faster delivery times, lower transportation costs, and higher customer satisfaction resulting from the supply chain's usage of digital technologies.
Rise in Palm Oil Exports Driving Growth of Indonesia Edible Oil Market
The palm oil sector in Indonesia has grown significantly; in 2023, the exports accounted for 32.2 million metric tons, a 2.7% decrease from 33.1 million tons in 2022. With 58% of the world's palm oil export volume in 2021, Indonesia is still the biggest exporter in the world and is predicted to maintain its dominant position in the market. Exports of palm oil from Indonesia is essential to major buyers including China, Pakistan, and India. Indonesia imported about 42% palm oil to India, 74% to China and around 88% of palm oil was imported to Pakistan. With $28.7 billion in palm oil exports in 2022, Indonesia became the world's biggest exporter. The United States, Bangladesh, China, India, and Pakistan are the top markets for Indonesian palm oil exports. Indonesia's production and export policies affect international palm oil pricing and commerce, and the country's palm oil exports have a major impact on the world market. By focusing on downstream products instead of upstream ones and expanding export target markets, the Indonesian government's downstream policy seeks to make the nation more influential in the world's palm commodity pricing.
Rise in Demand from Food Manufacturing Sector Driving the Growth of Indonesia Edible Oil Market
The edible oil market has grown significantly as a result of Indonesia's expanding food manufacturing sector. The food processing business is important and has room to grow, as seen by its USD 34.2 billion contribution to the national economy in 2021. The industry saw a 7% rise in processed food product manufacturing in 2022, which increased demand for edible oils as essential components of a range of food products. The exports in Indonesia have been on rise due to Indonesia food processing sector, with processed food exports reaching USD 12.5 billion in 2022—a 10% increase from 2021. From 2021 to 2025, the Indonesian edible oil market is expected to expand at a compound annual growth rate (CAGR) of 4.8%, driven by expanding processed food consumption and rising palm oil demand for food processing applications. The food processing industry is driving up demand for edible oils, as seen by the constant increase in per capita consumption of edible oils in Indonesia from 21.3 kilograms in 2021 to 22.5 kilograms in 2023. With the consumption of edible oils included, the Indonesian food processing industry's revenue grew significantly from USD 40 billion in 2022 to USD 45 billion in 2023.
Labor Shortages Affecting Indonesia Edible Oil Market
The Indonesian edible oil market has been facing labor shortages, which have impacted the production and supply of palm oil, a key ingredient in edible oils. In 2021, the labor shortages in Indonesia resulted in a decline in the production of palm oil by 2%, which further led to an increase in the prices of palm oil. The shortage of skilled labor in the palm oil industry has been a significant challenge, with the industry facing a shortage of 20% of the required workforce. The labor shortages in Indonesia have been due to the COVID-19 pandemic, which has disrupted the supply of migrant workers from Indonesia and South Asia, forcing plantations to operate with two-thirds or less of the required workforce. In 2023, the labor shortages in Indonesia have eased, with the country lifting its ban on palm oil exports, which had been imposed due to the domestic shortage of cooking oil. The lifting of the ban is expected to bring relief to the global market, with prices for palm oil falling by about 2% at the opening of the Malaysian Bourse night-trading session. The labor shortages in Indonesia have been a significant challenge for the edible oil market, impacting the production and supply of palm oil, a key ingredient in edible oils.
Trade Barries Posing a Major Challenge to Indonesia Edible Oil Market
Trade barriers, tariffs, and non-tariff measures imposed by importing countries have significantly impacted Indonesia's palm oil exports in the edible oil market. In 2021, Indonesia faced challenges due to trade barriers related to sustainability and environmental standards, affecting 30% of the country's palm oil exports and leading to a decline in market share and revenue. In 2022, Indonesia's palm oil exports were further impacted by a ban on exports imposed by the government to address domestic shortages. The ban, which lasted for about a month, disrupted global supply chains and led to a 10% increase in global palm oil prices. The ban affected 2.4 million tons of palm oil exports, equivalent to 12% of Indonesia's total palm oil production. In 2023, trade barriers continued to pose challenges for Indonesia's palm oil exports. The lifting of the export ban in May 2022 aimed to ease global supply worries and prices, indicating the significant impact of trade barriers on the industry. However, the lingering effects of trade barriers from previous years continued to affect the market, highlighting the ongoing challenges faced by Indonesia's palm oil sector in the global trade landscape. The European Union (EU) has been a significant player in imposing trade barriers on Indonesia's palm oil exports. In 2019, the EU imposed a ban on the use of palm oil in biofuels due to environmental concerns, affecting 50% of Indonesia's palm oil exports to the EU. In 2021, the EU's imports of Indonesian palm oil decreased by 20% compared to the previous year.
In 2021, Wilmar International announced several sustainability initiatives, including commitments to zero deforestation and sustainable sourcing practices in its palm oil supply chain. In 2021, Musim Mas Group expanded its presence in the sustainable palm oil sector by investing in eco-friendly processing technologies and collaborating with NGOs to promote responsible palm oil production. In 2022, PT SMART Tbk, a subsidiary of Golden Agri-Resources, announced the acquisition of a palm oil refinery in Malaysia as part of its expansion strategy to strengthen its presence in the global palm oil market. In 2023, PT Astra Agro Lestari Tbk launched initiatives to enhance smallholder inclusion in its supply chain, providing training and support to improve productivity and livelihoods of small-scale palm oil farmers. In 2023, Sime Darby Plantation Berhad, a major palm oil producer, announced strategic partnerships with local communities and NGOs to promote sustainable livelihoods and biodiversity conservation in palm oil-producing regions.
B35 Biodiesel Program
In 2022, Indonesia launched the mandatory B35 biodiesel program, which requires a 35% blend of palm oil in diesel fuel. This program aims to reduce the country's dependence on fossil fuels and promote the use of renewable energy sources
B40 Biodiesel Program
In 2023, the Indonesian government implemented a B40 biodiesel program, which would require a 40% blend of palm oil in diesel fuel. This program is expected to further increase the demand for palm oil in the country.
Subsidies for Replanting Aging Plantations
In March 2024, the Indonesian government is planning to double subsidies for replanting aging palm oil plantations from 30 million rupiah ($2,000) per hectare to 60 million rupiah ($3,800) per hectare. This initiative aims to boost the productivity and sustainability of the palm oil industry.
EU Deforestation Regulation
The Indonesian government is urging the European Union to postpone the implementation of the EU Deforestation Regulation, which is scheduled for January 2025. This regulation aims to reduce deforestation and forest degradation associated with the production of commodities, including palm oil.
Cooperation with Uzbekistan
Indonesia and Uzbekistan signed an MoU in 2023 to strengthen cooperation in the vegetable oil industry. This cooperation aims to increase Uzbekistan's domestic production of vegetable oil by utilizing Indonesia's knowledge, technology, and best practices.
Indonesia Edible Oil Market Segmentation
Indonesia Edible Oil Market Segmentation by Type of Oil (by revenue in %), 2022
The segmentation of the Indonesia edible oil market reveals a clear dominance of palm oil, which holds a staggering 95% share. This substantial share can be attributed to several factors, including Indonesia's status as one of the world's leading producers of palm oil, abundant availability of palm oil plantations, and its versatility in various food processing applications. Olive oil, with a 3.1% share, represents a smaller yet notable segment favored for its perceived health benefits and culinary versatility. Soy oil and corn oil each hold a 0.4% share, reflecting modest but growing demand driven by changing consumer preferences and increased awareness of healthier cooking oils. The remaining 1.1% share attributed to other oils such as palm kernel, peanut, and rapeseed underscores the market's diversity, catering to niche preferences and specialized culinary uses. Overall, the segmentation highlights palm oil's dominant position in the market, supported by a growing interest in alternative oils for specific dietary needs and culinary applications.
Indonesia Edible Oil Market Segmentation by Retail Channels (by revenue in %), 2022
The segmentation of the Indonesia edible oil market by retail channels reveals a significant preference for traditional offline retail channels, which hold a dominant share of 92.3%. This substantial share can be attributed to the long-standing tradition of purchasing groceries and food items from brick-and-mortar stores, which remain widely accessible and preferred by a majority of consumers across different demographics. In contrast, retail e-commerce channels hold a smaller yet growing share of 7.7%. This increasing share reflects the evolving consumer behavior towards online shopping, driven by factors such as convenience, wider product selection, and competitive pricing offered by e-commerce platforms. Additionally, the rise of digitalization, improved internet connectivity, and the convenience of doorstep delivery contribute to the gradual adoption of online retail channels for edible oil purchases. While offline retail channels maintain their stronghold in the market, the emergence and growth of e-commerce channels signify a shifting landscape towards digital retailing in Indonesia's edible oil market.
Indonesia Edible Oil Market Future Outlook (Revenue in IDR Bn), 2022-2027
The Indonesia edible oil market reached IDR 53,298.8 billion in 2022 and is projected to grow to IDR 62,070.5 billion by 2027. The forecasted compound annual growth rate (CAGR) for the period 2022-2027 is estimated at 3.1%. This growth is driven by several factors, including population growth, increasing urbanization, and rising consumer demand for cooking oils and processed foods. Additionally, government initiatives to support the agricultural sector and promote sustainable palm oil production contribute to market expansion. The forecasted CAGR indicates a steady but moderate growth rate over the next five years, reflecting a combination of market maturity and ongoing demand for edible oils in Indonesia.
Indonesia Edible Oil Market Company Profile
Company Name
Establishment year
Description
Salim Ivomas Pratama
1992
SIMP was first established on August 12, 1992, under the name PT Ivomas Pratama, and began operating in 1994. Initially, this company was just one small company of many other Salim Group agribusinesses, with a focus on managing the palm oil business in Khayangan, Riau. Ownership, since April 1997 has been owned by Indofood Sukses Makmur (80%), together with PT Argha Giri Perkasa. Its name has become PT Salim Ivomas Pratama since 24, 1994.
Smart Tbk PT
1962
PT SMART Tbk (SMART) is one of the most integrated and leading public palm oil-based consumer products companies in Indonesia committed to sustainable palm oil production. SMART’s oil palm plantations cover more than 138,000 hectares (including plasma). Its main activities are planting and harvesting oil palm trees, processing fresh fruit bunches (FFB) into palm oil (CPO) and palm kernel, and processing CPO into value-added products such as cooking oil, margarine, shortening, specialty fat, biodiesel, and trade palm oil-based products throughout the world. SMART also operates 16 palm oil mills, 5 palm kernel processing plants, and 4 refined mills in Indonesia.
Bina Karaya Prima PT
1981
Since inception in 1981, BKP has grown to become one of the top 15 FMCG companies in Indonesia. Their portfolio includes personal care items such as soap, skincare and fragrances, as well as food items such as cooking oil and margarine. Among our well-known brands are: Tropical Cooking Oil, Shinzui Soap and Personal Care, Zen Antibacterial Soap, Forvita Margarine, and many others.
Wilmar International LTD.
1991
Wilmar International Limited is a Singaporean food processing and investment holding company with more than 300 subsidiary companies. Founded in 1991, it is one of Asia's leading agribusiness groups alongside the COFCO Group. It ranks amongst the largest listed companies by market capitalization on the Singapore Exchange (SGX), being the second largest as of September 2010. It was ranked 211th in the Fortune Global 500 list in 2020. It was ranked 3rd in the World's Most Admired Company (Food Production) by Fortune in 2019.
Indonesia Edible Oil Market Macroeconomic Indicators
The data shows GDP and inflation of Indonesia from 2017-2022. The GDP increased from IDR 15216 tn in 2017 to IDR 18499 Tn in 2022. The inflation rate of Indonesia has also witnessed a steady growth from 3.8% in 2017 to 4.2% in 2022.
The population of Indonesia has been steadily increasing from 264.16 million in 2018 to 274.86 million in 2022.
The data shows city wise population of Indonesia in 2021. The city Sulawesi has recorded the highest population of 20.3 Mn in 2021 followed by 8.5 Mn in Jakarta, 2.3 Mn in Surabaya, and 1.7 Mn in Bandung and Medan.
Frequently Asked Questions
Explore quick answers to the most asked questions about Indonesia’s edible oil market, including market growth, key players, supply challenges, and distribution trends.
The Indonesia Edible Oil Market reached market size of IDR 53,298.8 Bn with a CAGR of 19.6% during the historic period 2017-2022.
Salim Ivomas Pratama, SMART Tbk PT, Bina Karya Prima PT, Multimas Nabati Asahan PT, and Sari Agrotama Persada PT are some of the major players in Indonesia Edible Oil Market.
Technological advancements, rise in palm oil exports, and growth of food manufacturing sector are some of the major drivers of Indonesia Edible Oil Market.
Indonesia Edible Oil Market is expected to reach market size of IDR 62,070.5 by 2027 with a CAGR of 3.1% during the forecast period 2022-2027.
