Indonesian palm oil production forecast to reach 47M tonnes in 2025/26

The 14 April report said the El Niño and Indian Ocean Dipole weather phenomena were not expected to have a significant impact, resulting in normal dry season weather patterns in Indonesia.

Additionally, fertiliser applications were expected to rise due to fertiliser costs falling by 14%-59% between 2022 and February 2025.

Despite the rise in palm oil production, the harvested area was set to remain at the current 14.4M ha in 2025/26, the report said.

The area of immature oil palms, meanwhile, was projected to increase from the current 15%-16%, although this was still well below the record set in 2011-2014. The FSA expects significant oil palm area expansion in the coming years due to high palm oil prices.

Indonesia’s palm oil consumption is set to grow slightly, reaching 22.6M tonnes in 2025/26, due to increased demand in local industrial and food sectors, according to the report. In particular, the country’s B40 biodiesel blending mandate, which began rolling out in March 2025, is forecast to drive industrial palm oil consumption to 14.9M tonnes in the coming marketing year.

The FSA also noted that Indonesia was eyeing a B50 blending mandate but achieving that target would require increasing the country’s biodiesel production capacity.

In 2025, Indonesian biodiesel capacity was expected to rise by 1.5bn litres from its current capacity of 19.7bn litres, the report said.

However, the country would still need an additional 4bn litres of capacity to satisfy a B50 blending mandate, according to data from the Indonesian biodiesel producers’ association.

Food use of palm oil was set to increase slightly by 50,000 tonnes, reaching 7.4M tonnes, the report said.

Due to the increasing demand from the local biodiesel sector, the Indonesian government had increased export levies on palm oil products by 10%, the USDA noted.

Consequently, Indonesia’s palm oil exports were forecast to rise only slightly, reaching 24M tonnes in 2025/26, compared to 23M tonnes the previous year.

Demand from China, India and Pakistan was expected to keep driving exports, although the former two countries were reducing their imports and increased Pakistani imports were not enough to offset the discrepancy.

Palm oil stocks in Indonesia are expected rise by 8% to reach 5.3M tonnes in 2025/26, indicating higher supplies, according to the report.

Tags: exports, Indonesia, weather, Production, biodiesel, palm oil, stocks, consumption, demand