Indonesia's Palm Oil Could Meet 60% of Global Vegetable Oil Demand by 2050

TEMPO.CO, Jakarta - Palm oil is projected to meet approximately 60 percent of global vegetable oil demand by 2050, positioning Indonesia to play a strategic role in fulfilling this need.

Tungkot Sipayung, Founder and Executive Director of the Palm Oil Agribusiness Strategic Policy Institute (Paspi), stated that global vegetable oil demand is rising year by year, driven by population growth, rising incomes, and global industrialization.

"As the global population grows, palm oil consumption also rises. With the world population projected to exceed 10 billion by 2050, global demand for palm oil will increase significantly," he said in a statement in Jakarta on Tuesday.

He noted that by 2050, with the global population projected at around 10 billion, global vegetable oil demand is estimated to reach 300 million tons—an increase of nearly 1.4 times the projected 2025 production level of 215.6 million tons.

Tungkot stated that beyond its use in food, vegetable oil is increasingly utilized for biomaterials, as a substitute for petrochemicals, and as an alternative energy source to replace fossil fuels.

He predicted that the production capacity of non-palm vegetable oils—such as soybean, rapeseed, and sunflower oils—would face future limitations due to constraints on productivity and land availability.

"Consequently, meeting global vegetable oil demand relies heavily on palm oil," he said.

He explained that as of 2025, soybean cultivation covers an area of approximately 143.8 million hectares, contributing 32.8 percent to global vegetable oil production.

Meanwhile, rapeseed covers 43.8 million hectares with a 16.5 percent contribution, and sunflower cultivation spans approximately 29.5 million hectares, contributing 9.3 percent. Although the total area dedicated to oil palm cultivation is only around 29 million hectares—relatively small compared to other major global vegetable oil crops—it contributes approximately 41.4 percent of the world's total vegetable oil production.

"It is estimated that by 2050, palm oil will meet around 60 percent of the global demand for vegetable oil," he stated.

Tungkot emphasized that palm oil holds several advantages regarding productivity and sustainability when compared to other major sources of vegetable oil.

According to him, palm oil productivity can be eight to ten times higher. Furthermore, there remains significant potential to increase palm oil productivity by another 50 to 100 percent through improved plantation practices and technological innovation.

In contrast, the productivity potential of other vegetable oils has largely plateaued—with the exception of rapeseed (or canola), which offers only slight room for growth, albeit still far below that of palm oil.

He explained that palm oil also boasts other advantages, such as a relatively stable year-round supply, competitive pricing, and the significant involvement of smallholder farmers, who account for about 42 percent of the sector.

Additionally, the palm oil industry engages millions of micro, small, and medium-sized enterprises (MSMEs) across the entire supply chain, from upstream to downstream sectors. Thanks to its competitive pricing, the industry plays a major role in providing affordable vegetable oil to the global population, including low-income groups in various countries.

"Thus, palm oil is more sustainable—economically, socially, and ecologically—than other vegetable oils," he asserted.

Tungkot advocates for making the enhancement of palm oil productivity a key priority, given that future global demand for vegetable oil will increasingly rely on this commodity.

According to him, there are two primary strategies for boosting palm oil productivity. The first involves increasing overall productivity through replanting using superior varieties, coupled with improvements and innovations in best plantation practices.

The second strategy focuses on increasing productivity within existing plantations through the implementation of Good Agricultural Practices (GAP), innovations in cultivation and harvesting technologies, and improved processing efficiency at palm oil mills.

"A combination of these two productivity-enhancing strategies will lead to a doubling of palm oil productivity," he said.

To date, the government, through the Oil Palm Plantation Fund Management Agency (BPDP), has continued to promote palm oil replanting via the Smallholder Palm Oil Replanting Program (PSR). This program serves as a crucial element in boosting productivity while simultaneously ensuring the sustainability of the national palm oil industry.

"With such productivity gains, Indonesia and other global palm oil producers will be able to supply palm oil to meet the needs of the global population," Tungkot stated.