Pakistan seeks lower export levy on Indonesian palm oil

According to the diplomat, palm oil accounts for a significant share of Pakistan’s imports from Indonesia. Islamabad is interested in developing domestic refining capacity for Indonesian CPO, which would allow the country to export higher-value processed palm oil products to neighboring markets.

However, Pakistan says a reduction in export levies is essential to make such plans economically viable. Currently, Indonesia’s export levy on CPO stands at around $129 per metric ton, in addition to an export duty that increases overall costs for traders and refiners. The revenue collected from these levies is largely used to fund Indonesia’s national biodiesel program.

Pakistan has also expressed openness to establishing a joint venture refinery within its territory. At the same time, this ambition partially contrasts with Indonesia’s strategy, which aims to move up the value chain by exporting more processed goods rather than raw commodities.

Despite differing priorities, both sides have signaled continued cooperation. Bilateral trade between Indonesia and Pakistan reached around $4.3 billion in 2025, while total trade stood at nearly $1.2 billion in the first four months of 2026. The two countries already maintain a preferential trade agreement covering palm oil, and are working to upgrade it into a Comprehensive Economic Partnership Agreement (CEPA), which could further expand market access.