Why China wants Indonesia’s palm oil

Is China betting big on palm oil to secure its cooking oil and biofuel future? Indonesian media reported that China recently sent its Deputy Minister of Agriculture and Rural Affairs, Maierdan Mugaiti, to request that Jakarta guarantee its long-term supplies of crude palm oil and other key commodities. While full details remain undisclosed, such an arrangement would deepen agricultural trade ties between two pivotal players: China — the world’s second-largest importer and third-largest consumer of palm oil — and Indonesia, the world’s largest producer and exporter. China relies heavily on foreign imports of edible oils (such as palm oil, soybean, rapeseed/canola, sunflower) to support its domestic production, making the country highly exposed to global price volatility and supply disruptions. Although soybean oil remains dominant, supplying around 40% of China’s cooking oil consumption, palm oil use has expanded steadily increased partly due to lower costs, versatility, and long ...