Palm Oil Production in Indonesia to Increase by 2-3% in 2026

The Indonesian Palm Oil Producers Association forecasts that in 2026, crude palm oil production in the country will increase by 2-3%. This is significantly lower than last year’s growth of 8%, indicating a slowdown in the industry’s growth rate.

This is reported by AgroReview

Production Volumes and Consumption

According to M. Fadhil Hasan, head of external relations at GAPKI, palm oil production in 2025 amounted to 51.98 million tons. The total volume, including crude palm kernel oil, reached 56.91 million tons. Export volumes increased by 8.7%, totaling 32.12 million tons, while domestic consumption rose by 3.8%, reaching 24.76 million tons. The driver of domestic demand was the mandatory B40 biodiesel fuel usage program.

“He stated that the aging of plantations has led to an increase in the number of young trees, resulting in a decrease in yield.”

Price Forecasts and Key Market Factors

Experts estimate that palm oil prices in 2026 will remain high but will be lower than in the previous year. During the first half of the year, a price range of 4100-4400 ringgits per ton is expected, linked to seasonally low yields, potential harvesting delays, and inventory adjustments following the end of 2025.

In the second half of the year, prices may fluctuate between 4000-4300 ringgits per ton. The dynamics will be influenced by seasonal yield increases, competition from soybean and sunflower oils, as well as potential political changes or slowdowns in the implementation of biodiesel programs by the end of the year.

Experts do not rule out that the situation in Indonesia’s domestic market, particularly land and political changes, including control over plantations, may further impact production figures in 2026.