GAPKI Reveals Palm Oil Export Demand Falls Due to Middle East Conflict

Jakarta — The Head of the Indonesian Palm Oil Association (GAPKI), Eddy Martono, has revealed that demand for crude palm oil (CPO) exports is declining as a result of the conflict involving Israel and the United States against Iran.

The decline has been driven by a 50 per cent increase in logistics costs and transport insurance premiums.

The conflict, which has closed the Strait of Hormuz, has caused global crude oil prices to spike and shipping costs to rise accordingly.

“We must be honest as well; with this increase in logistics costs, there has been a slight decrease in demand,” said Eddy when met at the Ministry of Agriculture (Kementan) office in Jakarta on Wednesday (11 March 2026).

However, the product continues to be shipped to fulfil purchase contracts that were agreed before the conflict erupted.

He acknowledged that GAPKI does not yet have data on the percentage decline in CPO export demand, as the conflict has only been ongoing for approximately 10 days.

“It is not yet clearly visible, but there are indications, for instance, that there are no new orders coming in,” he said.

Currently, demand remains steady because CPO has become a daily necessity, so stocks must continue to be replenished even at higher costs.

“For example, exports to America continue to run smoothly. India continues to receive shipments without any problems,” said Eddy.

Exports to European countries are also continuing. CPO is being shipped via Cape Town in South Africa if companies are unwilling to transit through the Suez Canal.

“But at present, we are still able to pass through the Suez Canal, although their demand for it is because fuel costs have risen,” he added.