Supply Chain Disruptions and Business Challenges During Palm Oil Crisis in Indonesia

Abstract

The global commodities market has faced significant turbulence in recent years, with the palm oil crisis in Indonesia standing as a critical example of how supply chain disruptions can impact businesses and economies. This paper explores the multifaceted challenges faced by businesses during the palm oil crisis, focusing on the interplay between supply chain inefficiencies, regulatory interventions, and market dynamics. By examining key issues such as raw material shortages, export bans, and price volatility, the study highlights how these factors disrupted business operations, constrained profitability, and intensified economic vulnerabilities across various sectors. Using a qualitative methodology, the research synthesises industry reports, policy analyses, and case studies to assess the ripple effects of the crisis on local and global supply chains. It also investigates how businesses adapted through alternative sourcing, operational adjustments, and strategic collaborations. Critical questions addressed include: How did policy decisions during the crisis affect supply chain stability? What strategies proved effective for businesses navigating these disruptions? Findings reveal that while regulatory measures sought to stabilise domestic markets, they often exacerbated challenges for exporters and global supply chains. The study underscores the importance of fostering supply chain resilience, promoting transparent policies, and leveraging technology to enhance operational agility. Recommendations include strengthening public-private partnerships, adopting digital supply chain tools, and improving regulatory frameworks to mitigate the impact of future disruptions. By offering actionable insights, this research contributes to the discourse on supply chain sustainability, providing valuable lessons for policymakers, businesses, and stakeholders in navigating crises effectively.