Indonesia’s palm oil export growth slows ahead of B50 biodiesel rollout
Indonesia’s palm oil export growth slowed in the first half of 2026 as the country prepared to implement its B50 biodiesel mandate. Higher domestic palm oil demand is expected to reduce export availability, supporting global vegetable oil prices unless production increases sufficiently.
Indonesia’s palm oil export growth slowed significantly in the first half of 2026 as the country prepared to launch its mandatory B50 biodiesel program. The new policy is expected to increase domestic palm oil consumption and reduce export availability from the world’s largest producer.
According to Statistics Indonesia (BPS), palm oil exports rose by 7.3% year-on-year to $12.27 bln in January-June 2026, compared with a 24.8% increase during the same period a year earlier. Export volumes grew by just 2.5% to 11.28 mln tons. In June alone, crude palm oil exports weakened, with export value slipping 0.4% to $393.7 mln, while shipment volumes dropped nearly 20% to 335.4 thsd tons.
BPS noted that these figures do not yet reflect the impact of the B50 biodiesel mandate, which took effect in July 2026 and increased the mandatory palm oil blend in biodiesel from 40% to 50%. The full impact on exports will become clearer in the coming months and will depend on production, supply, domestic demand, and international prices.
The Indonesian Palm Oil Association (Gapki) estimates that the B50 program will increase domestic crude palm oil demand by approximately 1.9 mln tons, bringing total consumption for biodiesel production to around 14.6 mln tons. The association warned that exports could decline significantly unless palm oil production expands enough to meet the additional domestic demand.
The B50 program is part of Indonesia’s strategy to reduce its dependence on imported fossil fuels. The policy has gained importance after the country’s oil and gas imports more than doubled year-on-year in June 2026, driven by higher energy imports from Singapore and Malaysia.
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Source : Ukr Agro Consult
