Indonesia’s palm oil production to grow 2-3% this year – GAPKI

According to the Indonesian Palm Oil Association, crude palm oil production in Indonesia is projected to grow by 2-3% this year, slowing from the 8% annual growth in 2025.

Palm oil production in 2025 is expected to reach 51.98 million tonnes, said M. Fadil Hasan, head of external relations at GAPKI, at an industry conference in Kuala Lumpur on Wednesday.

He noted that aging plantations have led to an increase in the number of young trees, causing a decline in yield.

Total palm oil production, including crude palm kernel oil, was projected to reach 56.91 million tonnes in 2025.

Palm oil exports from Indonesia increased by 8.7% to reach 32.12 million tonnes in 2025.

Domestic palm oil consumption in 2025 is projected to increase by 3.8% to 24.76 million tonnes, driven by the mandatory use of biodiesel under the B40 program.

Palm oil prices will remain high this year, but lower than in 2025.

In the first half of 2026, palm oil prices are expected to be RM4,100-RM4,400 per tonne, driven by a seasonally low or delayed harvest, as well as inventory adjustments after the end of 2025.

In the second half of the year, the price range will widen to RM4,000-RM4,300 per tonne, driven by seasonally higher yields and competition from soybean and sunflower oils, as well as potential policy uncertainty and a slowdown in biodiesel adoption by the end of the year.

Indonesia’s internal land and political issues, such as changes in plantation control, could further impact production dynamics in 2026, he said.

Tags: Indonesia, palm oil