Indonesia’s POME suppliers hold off sales amid government corruption probe: traders

Indonesian suppliers of palm oil mill effluent, or POME, are holding off on export queries from overseas buyers to avoid drawing attention from a widening corruption investigation into palm oil exports, traders told Platts, part of S&P Global Energy, on Feb. 20.

Exporters and traders said there is a reluctance to make fresh offers for refined POME, as they fear they could be implicated in alleged irregularities that Jakarta said have cost the state about 14 trillion rupiah ($900 million).

On Feb. 10, the Attorney General's Office named 11 suspects, including a senior Ministry of Industry official, in a case that centers on companies disguising crude palm oil, or CPO, shipments as POME to skirt export rules over 2022 and 2024.

Indonesia is the world's largest producer and exporter of palm oil. In 2025, the country accounted for about 22% of the world's vegetable oil production and a third of global exports, according to US Department of Agriculture trade data. Since early 2025, the country has restricted exports of POME and used cooking oil, or UCO, to secure raw material supplies for domestic cooking oil production and support for Indonesia's biodiesel program.

"The market has frozen," one Jakarta-based trader told Platts. "We don't know what to do at the moment as we are afraid our operations could be jeopardized."

Meanwhile, POME exports from Malaysia, Indonesia's closest rival in palm oil production, are continuing, the trader said.

POME is a byproduct generated during the processing of fresh fruit bunches in palm oil mills. As it qualifies as an advanced biofuel feedstock under EU and US laws, it receives better policy incentives than crop-based biofuels.

Officially, over 2 million metric tons of POME oil were consumed in European biofuels in 2023. This is well above the 1 million mt estimated to be available globally, the clean fuels NGO European Federation for Transport and Environment, commonly known as Transport & Environment, said in an April 2025 report on POME fraud.

Since the investigation became public, POME prices have fallen nearly 10% in Indonesia's domestic market, while export offers from Malaysia have been supported, according to Platts price assessments.

Platts assessed domestic Indonesian POME at $685.38/mt on Feb. 19, down 9.4% from the start of the month.

Meanwhile, in Malaysia, POME prices have risen 1.7% since the start of the month to $1,068/mt on Feb. 19 on an FOB basis.