Indonesia’s palm oil production expected to see limited growth in 2026
Indonesia’s crude palm oil production rose 7.3% to 51.66 million tonnes in 2025, while stocks fell to 2.07 million tonnes. Output growth in 2026 may remain limited due to dry weather and regulatory challenges, as the planned B50 biodiesel program could divert more palm oil to domestic fuel use.
Indonesia’s crude palm oil output reached 51.66 million metric tons in 2025, marking a 7.3% increase compared to the previous year, according to the country’s palm oil association GAPKI. At the end of 2025, palm oil stocks stood at 2.07 million metric tons, down 25% from the previous month.
GAPKI Secretary General Hadi Sugeng said producers are aiming to increase output in 2026, but dry weather and regulatory challenges could limit growth. He noted that any rise in production is expected to be modest, likely only 1–2%, and not exceeding 5%.
Sugeng added that Indonesia’s plan to implement a mandatory B50 palm oil-based biofuel program later this year could also affect export volumes and potentially increase export levies. Supply constraints may therefore prevent significant expansion of output despite efforts to boost production.
Overall, the industry faces a balancing act between supporting domestic biofuel initiatives and maintaining stable export supplies, while weather and regulatory factors will continue to influence production levels in 2026.
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Source : Ukr Agro Consult
