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Climate Change Costs Palm Oil Industry Billions in Lost Yields

endonesiecorp February 15, 2025 7:31 am . 4 min read
Reni Subawati, a researcher at SMART Research Institute, addressing reporters at the International Conference on Oil Palm & Environment (ICOPE) 2025 in Bali, Friday, Feb. 14, 2025. (The Jakarta Globe/Faisal Maliki Baskoro)

Denpasar, xweb.biz.id –  The palm oil industry is increasingly facing severe impacts from climate change, with prolonged droughts and rising temperatures significantly affecting yields in major producing countries, particularly Indonesia and Colombia. As a result, the industry is at risk of losing billions of dollars each year, with urgent action required to secure production and minimize financial losses.

Indonesia’s Struggling Palm Oil Industry

In Indonesia, key palm oil-producing regions, including Lampung, South Kalimantan, and South Sumatra, have been grappling with severe water deficits, leading to production declines of up to 10 percent annually. According to data from the SMART Research Institute, if this trend continues, the industry could experience losses of up to $4.6 billion annually.

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“Climate change is having a significant and unpredictable impact on our plantations,” said Reni Subawati, a researcher at the SMART Research Institute, at the International Conference on Oil Palm & Environment (ICOPE) 2025 in Bali. “To address this, we have been working on developing drought-tolerant palm oil varieties to help mitigate these impacts.”

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Drought-Resistant Palm Oil Varieties

In response to the growing challenge, scientists at the SMART Research Institute have spent over a decade developing drought-tolerant palm oil varieties. Through advanced genetic selection methods, they identified 14 promising candidates, two of which—SD14 and SD63—showed remarkable resilience under extreme drought conditions.

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Using Chlorophyll Fluorescence technology and the Drought Factor Index (DFI), the research team was able to efficiently screen various palm oil varieties. Field trials conducted in South Kalimantan demonstrated that SD14 and SD63 outperformed conventional varieties, maintaining 14–27 percent higher yields during severe droughts, such as those experienced in 2014 and 2015.

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“While we cannot promise a completely drought-resistant variety, these new cultivars can significantly reduce productivity losses, especially in times of water shortage,” Reni explained.

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Currently, SD14 is undergoing official release approval by Indonesia’s Varietal Release Assessment Team (TPPV). Once approved, this new variety is expected to play a crucial role in helping plantations maintain yield and mitigate the financial risks posed by climate-related droughts.

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Colombia’s Palm Oil Challenges

Similar challenges are unfolding in Colombia, where climate change is also causing severe disruptions in the palm oil industry. Ivan Mauricio Ayala Diaz, a researcher at Cenipalma, shared insights at ICOPE on the impact of climate change on Colombian plantations. Rising global temperatures, greenhouse gas emissions, and land-use changes are putting ecosystems and wildlife under pressure, while also damaging palm oil production.

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“In the last 15 years, Colombia has lost 168,000 hectares of palm plantations due to climate-induced disease outbreaks, leading to millions of dollars in losses,” Diaz noted. “The impact on pollination efficiency and fruit production is particularly concerning, as these factors directly affect yields.”

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Strategies for Mitigating Climate Impacts in Colombia

In response to these challenges, Cenipalma has implemented a combination of agronomic techniques, such as artificial irrigation, to bolster resilience. Research conducted in both northern and southern Colombia found that the use of dripper irrigation systems increased yields by up to 90 percent. Additionally, soil moisture conservation practices helped reduce erosion by 50 percent.

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In addition to improving irrigation methods, Cenipalma has also been applying genomic selection techniques and EST (Expressed Sequence Tag) methods to breed palm oil varieties that are more resistant to heat stress and drought. Through these innovative approaches, the center aims to boost the productivity of Colombian palm oil plantations in the face of climate uncertainty.

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Moreover, Cenipalma’s research has shown that ammonium-based fertilizers are more effective than traditional nitrate-based fertilizers in promoting the growth of palm trees, especially under hot and dry conditions.

The Path Forward for the Palm Oil Industry

As climate change continues to pose significant risks to the palm oil industry in both Indonesia and Colombia, the development of drought-tolerant palm oil varieties and sustainable agricultural practices will be critical to ensuring long-term production stability. Innovations like the drought-resistant SD14 and SD63 varieties offer hope for mitigating the financial and ecological impacts of climate change, but continued investment in research, irrigation, and improved agricultural practices will be essential for future resilience.

Both Indonesia and Colombia are taking crucial steps to safeguard their palm oil industries, with the use of advanced scientific techniques playing a key role in adapting to the unpredictable climate shifts. These efforts are vital not only for the palm oil sector but also for the millions of people whose livelihoods depend on it.

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agricultural researchCenipalmaclimate adaptationclimate changeclimate impact on agricultureColombia palm oildrought tolerancedrought-resistant palm oilgenetic selection in palm oilIndonesia palm oiloil palm varietiespalm oilpalm oil sustainabilitypalm oil yieldsSMART Research Institute
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