Indonesian Palm Oil Tariffs May Be Cut

29-Dec-2025 04:00 PM

Jakarta. Indonesia recently signed a free trade agreement with the Eurasian Economic Union (EAEU). This agreement brings Indonesia and several Eurasian countries – Russia, Armenia, Belarus, Kazakhstan, and Kyrgyzstan – together on a single platform. Both sides are expected to benefit from this agreement.

Indonesia is the world's largest producer and exporter of palm oil. Its Minister of Trade stated that this new agreement will reduce customs duties on Indonesian palm oil imports to near zero percent in the Eurasian bloc countries, which will significantly boost exports of this important vegetable oil.

It is worth noting that Russia is the largest economy in the Eurasian Economic Union and a major exporter of various food and agricultural products, including wheat, corn, barley, and sunflower oil.

Russia is one of the world's leading wheat exporters, while Indonesia is among the top wheat importers. Kazakhstan also exports a significant amount of agricultural products.

According to the Indonesian Minister of Trade, this agreement will reduce customs duties on almost all products to near zero percent, including Indonesian palm oil.

However, the exact level of tariff reduction has not yet been disclosed. This agreement will also provide a great opportunity for Indonesia's textile and footwear manufacturers to expand their businesses.

According to the Minister of Trade, Indonesia's total trade with this bloc was approximately $4.5 billion in 2024, and this could double after the agreement. This agreement could also open up markets in other neighboring countries of the bloc, such as Ukraine and Tajikistan.