Indonesia’s crude palm oil prices could rise amid biodiesel demand
Crude palm oil (CPO) prices in Indonesia could range from $959 to $1,172/t in 2026, depending on market developments. According to the Palm Oil Commodity Outlook 2026, three price scenarios are projected — $959, $1,066 and $1,172/t. For comparison, the average CPO price stood at $942/t in 2024, while the projection for 2025 was $1,017/t.
One of the key factors supporting prices is Indonesia’s B40 biodiesel program, which requires a 40% share of biodiesel in the fuel blend. Increased use of palm oil for fuel production is generating additional domestic demand and could reduce the volume of feedstock available for other uses and exports.
Between 2020 and 2024, Indonesia’s palm oil consumption for biodiesel production increased by an average of 12.2% annually. By 2025, the country’s installed biodiesel production capacity had reached 19.15 mln kiloliters, supported by 26 production facilities.
At the same time, overall domestic consumption and palm oil exports remain significant. In January-July 2025, domestic consumption reached 14.3 mln tons, up 6.57%, while exports increased by 11.1% to 19.2 mln tons.
Further CPO price dynamics will depend not only on the implementation of the B40 program but also on production of competing vegetable oils, demand from major importing countries and their trade policies. Other important factors include the price relationship between crude oil and vegetable oils, the level of support for biodiesel production and palm oil production trends in Indonesia.
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