Indonesia is accelerating downstream processing of key agricultural commodities, particularly palm oil and coconut, to reduce energy imports while increasing domestic value creation. The initiative aims to shift the country away from exporting raw materials toward higher-value processed products that deliver stronger economic benefits at home. Indonesia currently imports around 5.8 million tons of diesel annually, while exporting approximately 26 million tons of crude palm oil, much of which is still sold without further processing. This imbalance highlights significant untapped potential to strengthen national energy resilience and economic efficiency.

By processing palm oil into biofuel and other high-value derivatives, Indonesia could reduce fuel imports, save foreign exchange, and enhance its position in global supply chains. Similar efforts are being encouraged for coconut, where export value currently stands at around IDR 24 trillion but could increase through products such as coconut milk, virgin coconut oil, and packaged coconut water. The strategy also extends to gambier, where Indonesia controls about 80% of global supply but largely exports it in raw form. Supported by regulatory reform and simplified policies, downstream development is expected to boost regional economies, create jobs, strengthen farmers’ incomes, and reinforce long-term national economic resilience amid global uncertainty.
Source
https://www.sawitsetara.co/artikel/Berita/mentan-dorong-hilirisasi-sawit-dan-kelapa-untuk-pangkas-impor-energi#google_vignette