Farm Progress America, October 29, 2025

Mike Pearson takes a look at the palm oil industry and changes in the country of Indonesia which could impact soybean producers.

Over the last 25 years, Indonesia has grown palm oil production dramatically.

It has grown from the hundreds of thousands metric tons to tens of millions metric tons in the 2010s.

The country now supplies about half of the world's palm oil.

Now, palm oil competes directly with soybean oil in the global edible oil segment.

When palm oil is cheaper or more available, refiners shift to it.

But when supplies tighten or it's not available then the demand is directed to soybean oil.

Now, the Indonesian government is moving in. Backed by the Indonesian military nearly 7 million acres of private prime palm plantation land or almost 30 percent of the country's total have been seized.

And nearly half of those ownerships have been transferred to the government and management.

According to the government the confiscation is legal because the palm plantations are supposed to be in forest zones or lacking permits.

Their task force is reclaiming those acres for forest protection and industry cleanup.

But for palm oil buyers, the concern is that operators are replaced by state owned entities.

For one seized plantation, production dropped by 75 percent int he months following nationalization.

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Analysts are already warning due to fear and mismanagement; yields can drop which will tighten global supply of palm oil.

Farm Progress America is a daily look at key issues in agriculture. It is produced and presented by Mike Pearson, farm broadcaster and host of This Week in Agribusiness .