Indonesia’s palm oil production will grow by 2-3% this year — GAPKI
Indonesia’s crude palm oil output is projected to rise 2–3% in 2026, slowing from 8% growth in 2025, says GAPKI. Aging plantations are weighing on yields, though exports and B40-led domestic demand remain strong. Prices are expected to ease but stay firm, averaging RM4,000–4,400 per tonne.
Indonesia’s crude palm oil production is forecast to grow by 2-3% this year, slowing from an 8% annual growth rate in 2025, according to the Indonesian Palm Oil Association.
Palm oil production volume in 2025 will reach 51.98 million tonnes, M. Fadil Hasan, head of external relations at GAPKI Group, said at an industry conference in Kuala Lumpur on Wednesday.
According to him, the aging of plantations has led to an increase in the number of young trees, which has caused a decrease in yield.
Total palm oil production, including crude palm kernel oil, was estimated at 56.91 million tonnes in 2025.
Indonesia’s palm oil exports increased by 8.7% to 32.12 million tonnes in 2025.
Domestic palm oil consumption is expected to increase by 3.8% to 24.76 million tonnes in 2025, driven by the mandatory use of biodiesel under the B40 program.
Palm oil prices will remain high this year, but lower than in 2025.
The palm oil price is expected to be RM4,100-RM4,400 per tonne in the first half of 2026, driven by seasonally low or delayed harvests and inventory adjustments after the end of 2025.
The price range is expected to widen to RM4,000-RM4,300/tonne in the second half of the year, driven by seasonally higher yields and competition from soybean and sunflower oils, as well as potential policy uncertainty and a slowdown in biodiesel adoption towards the end of the year.
Indonesia’s internal land and political issues, such as changes in plantation control, could further impact production dynamics in 2026, he said.
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Source : Ukr Agro Consult
