Indonesia’s biofuel expansion poised to drive palm oil prices to record highs

Published 2025년 11월 13일

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Palm oil is set for a new bullish rally as Indonesia — the world’s largest producer — plans to expand its domestic biofuel program. The government intends to raise the biodiesel blend from 40% to 50% in the second half of 2026. Known as the B50 program, the move aims to reduce fuel imports and

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greenhouse gas emissions, but it may also significantly limit export volumes and tighten global supply. Amid stagnant production growth in major producing countries, experts warn that the initiative could push global prices higher, reshape the vegetable oil trade, and even fuel food inflation. Palm oil — used across food, cosmetics, and fuel industries — is currently trading around 4,145 ringgit ($999) per ton, about 6% lower year-to-date. However, if B50 is implemented, prices could climb to 5,000 ringgit per ton in the first half of 2026, according to Eddy Martono, chairman of the Indonesian Palm Oil Association (GAPKI). Martono added that the policy may also lead to higher export levies, which would mainly affect smallholders. For global markets, it means tighter supplies as Indonesia — accounting for more than half of the world’s palm oil exports — prioritizes domestic biodiesel production. BMI commodities analyst Matthew Biggin noted that such a shift would force key ...

Source: UkrAgroConsult