Indonesia fires could cut palm oil output in Kalimantan by 15%

Palm oil production in Indonesia’s Kalimantan region could decline by 12–15% in the fourth quarter of 2026 due to prolonged dry weather and widespread fires. According to StoneX, output in the region may already have fallen by 11–12% in August.

Kalimantan accounts for more than one-third of Indonesia’s palm oil production. Central and West Kalimantan together contribute around 27% of national output, while the three provinces including East Kalimantan account for about 36%.

The situation has been worsened by the country’s most severe wildfires in 11 years amid El Niño-linked drought conditions. Official data show that around 202 thsd ha burned across Indonesia in January-July, while YKAN estimates that another 600 thsd ha were damaged in August.

The Indonesian Palm Oil Association GAPKI warned that the impact of the fires could persist for some time. Fire-damaged palms may die or remain under stress, while recovery could take up to three years.

GAPKI has already cut its 2026 palm oil production forecast for Indonesia by 2.9% because of the fires. However, total output is still expected to remain above last year’s level as new plantations enter production.

Tags: weather conditions, Indonesia, palm oil, Kalimantan