Indonesian palm oil shipments to the EU will not rise more than 5% in the first half of 2027, despite an incoming CEPA eliminating tariffs on the sector.

The EU's deforestation regulation still requires plot-level traceability certification that most Indonesian smallholders lack, meaning the real bottleneck is compliance capacity, not tariffs. Expect Indonesian officials to publicly blame slow EUDR implementation, rather than the trade deal itself, for underwhelming export gains.