Indonesia's CPO Prices at Risk Amid Ongoing India-Pakistan War

17 hours ago 2

TEMPO.CO, Jakarta - The Chairperson of the Indonesian Palm Oil Entrepreneurs Association (Gapki), Eddy Martono, has confirmed that the ongoing conflict between India and Pakistan has yet to impact the movement of crude palm oil (CPO) prices.

"The impact has not been felt significantly, but if it continues for a long time, it will definitely have an impact because India is the second-largest importer of Indonesian palm oil," Eddy said when contacted on Saturday, May 10, 2025.

Eddy stated that Indonesia's annual export of crude palm oil to India is 5 million tons, while to Pakistan it is 3 million tons. Eddy mentioned that if the conflict between the two countries persists, it is possible that the demand for CPO imports from Indonesia will decrease. "It will affect our stock, and if our stock increases, it will definitely push down prices," said Eddy.

Eddy stated that the current CPO price is still relatively high, at around US$1,000 per ton. "Pakistan accounts for 90 percent of palm oil, so the 5 million to India is a significant export. This means we hope for this matter to be resolved soon," he added.

According to Eddy, the conflict not only affects the potential decrease in CPO prices in the world market but also has the potential to cause a decrease in prices for other vegetable oil products such as sunflower oil and soybean oil.

Despite the potential decline in CPO exports to Pakistan and India, Eddy is optimistic that the demand will not decrease significantly. "It doesn't mean that the full 5 million will be lost immediately; it doesn't feel like that," he said.

Eddy mentioned that Indonesia's trade balance with India and Pakistan still remains surplus. Indonesia's trade balance with India in 2024 was a surplus of US$14.67 billion, while the trade balance with Pakistan was US$2.9 billion in the same year. "It's positive for India and Pakistan, so this is a good market for Indonesia, meaning it's a potential market," he stated.

India launched missile strikes on several areas in Pakistan and Kashmir controlled by Pakistan on Wednesday morning, May 7, 2025. The attack resulted in several explosions heard in various areas, including Bahawalpur, Muridke, Bagh, Muzaffarabad, and Kotli in the disputed region.

Lieutenant General Ahmed Sharif Chaudhry, a Pakistani military spokesman, confirmed to Aljazeera that Indian missiles hit four locations in Punjab and two locations in the Kashmir region controlled by Pakistan. The attack took place around 01:00 local time on Wednesday.

The conflict between India and Pakistan began after an attack in Baisaran Valley, Pahalgam, Kashmir under Indian control on April 22, 2025. In the attack, a group of armed men killed 26 people, including 25 tourists and one local horse rider, after separating them from women.

India accused Pakistan of supporting, arming, and training armed groups that are considered sources of unrest in the region. On the other hand, Pakistan emphasized that they only provided moral and diplomatic support for the separatist movement in Kashmir.

Following last month's attack, India accused a group called The Resistance Front (TRF) as the perpetrators, claiming that the group received support and protection from Pakistan.

Pakistan, although condemning the attack, strongly denied its involvement and requested a "transparent, credible, and unbiased" investigation into the incident.

India, which had previously attacked Pakistan in 2016 and 2019 after attacks on its troops, announced that it would retaliate. Prime Minister Narendra Modi stated that India would pursue the perpetrators of the attack in Kashmir "to the end of the world."

However, more than two weeks after the incident, Indian troops are still searching in the forests of Kashmir to find the perpetrators of the attack, despite India already launching attacks in the bordering region.

The relationship between India and Pakistan has long been marked by conflict, diplomatic hostility, and deep distrust, especially over Kashmir.

For decades, armed rebels in Kashmir have opposed Indian rule, with many Muslim Kashmiris advocating to join Pakistan or establish an independent state.

India accused Pakistan of supporting these rebel groups, an accusation denied by Islamabad. This conflict has resulted in tens of thousands of deaths among civilians, militants, and government forces.

Rizki Dewi Ayu contributed to the writing of this article.

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