African nations that rely on Indonesian palm oil may soon feel the heat in their wallets, following Indonesia’s decision to raise its export tax on crude palm oil (CPO).
The world’s largest producer of palm oil officially increased its export levy from 7.5% to 10% on May 17, 2025, a policy shift aimed at financing domestic biofuel initiatives and replanting programs, with a strong emphasis on empowering smallholder farmers.
“The adjustment of the export levy is necessary to enhance the productivity and added value of downstream plantation products, especially for the benefit of farmers,” the Indonesian Ministry of Finance stated in its official release.
While the move is seen as a strategic effort to boost local industry, it’s likely to cause ripples in global markets, particularly in Africa, where several countries depend heavily on palm oil imports from Southeast Asia.
With local production unable to meet rising demand, African consumers are likely to shoulder the burden of higher costs as importers pass down the added expenses triggered by the new levy.
Indonesia’s palm oil industry insiders are voicing their concerns. Eddy Martono, Chairman of the Indonesian Palm Oil Entrepreneurs Association (Gapki), warned that the tax hike could weaken the country’s competitive edge.
“Compared to Malaysian palm oil, our products are already more expensive due to various levies, export taxes, and domestic obligations. All of this is burdensome,” Martono told Reuters.
Statista’s data for 2024/25 ranks Indonesia as the world’s top palm oil exporter, shipping an estimated 24.2 million metric tons, far ahead of Malaysia’s 15.9 million metric tons.
Though Africa is not among Indonesia’s largest buyers, those include India, China, Pakistan, the U.S., and Bangladesh, countries like Nigeria, Kenya, Tanzania, Angola, and South Africa are significant regional importers.
Despite being home to over a billion people, Africa’s palm oil production remains far below demand. According to 2023 figures from the World Agricultural Production, Nigeria led the continent with 1.4 million metric tons, making it the fifth-largest producer globally.
Côte d’Ivoire followed with 600,000 metric tons, while Cameroon, Ghana, and the Democratic Republic of Congo each contributed between 300,000 and 465,000 metric tons.
Local output, however, is still insufficient, forcing most African nations to rely on imports, especially from Indonesia and Malaysia. As prices rise globally, these countries may soon be paying significantly more to secure their palm oil supply.
