Indonesia to more than triple palm oil use

Palm oil use in Indonesia is expected to reach unprecedented levels this year. Analysts predict that this figure will triple the average for the past decade, driven by an increase in biodiesel production forecasts to 13.6 million tonnes, 1.5 million tonnes higher than last year. These forecasts were announced by experts at Oil World (Germany).

The current B40 blending mandate in Indonesia (40% palm biodiesel use) has been implemented despite challenges and uncertainties in the industry. The government plans to further increase biodiesel blending to 50% (B50). Final implementation is scheduled for 2026. This will have a significant impact on future exports of Indonesian palm oil, experts note.

Total palm oil use in Indonesia in 2025 is expected to reach a record high of 23.1 million tonnes, more than three times the average for the past 10 years. However, increased domestic consumption is expected to significantly limit the country’s oil exports, despite increased production volumes.

Against this backdrop, analysts expect palm and soybean oil prices to rise by $100–$150. Sunflower oil, on the other hand, is expected to decline, according to industry representatives, due to a reduction in the premium over alternative products.

Tags: Indonesia, palm oil, biofuel