USDA сuts Indonesia’s palm oil export forecast for 2024/25 season

The Foreign Service of the United States Department of Agriculture (FAS USDA) has lowered its Indonesian palm oil export forecast for 2024/25 from its previous estimate to 22.8 million tonnes due to the B40 mandate and lower export demand. The production forecast for 2025/26 was left at 47 million tonnes, up 3% from 45.5 million tonnes the previous year, due to expectations of higher yields due to favorable weather and adequate fertilizer application.

In Indonesia, the biodiesel industry has increased domestic palm oil consumption over the past decade. In early 2025, biodiesel was increased from 35% to 40% (B40) with an annual volume of 15.6 billion liters. By May 2025, biodiesel supplies under the Advanced Blending Program had been established and reached 5.85 billion liters, or 38% of annual palm oil production.

The USDA maintained its estimates for industrial palm oil use at 14.7 million tonnes and 14.9 million tonnes for 2024/25 and 2025/26, respectively. Its forecast for food industry palm oil use was unchanged at 7.4 million tonnes in 2025/26, up 1% from 2024/25, due to continued demand.

The ministry also left its forecast for Indonesia’s palm oil exports unchanged at 24 million tonnes in 2025/26, up 5% from its earlier revised estimate of 22.8 million tonnes for 2024/25, which was lowered due to lower export volumes and weaker demand in key markets. However, higher shipments to Pakistan and Bangladesh failed to offset weaker demand from China, India and the United States.

The narrowing price differential with other competing vegetable oils has encouraged buyers to switch to alternative oils, the ministry said.

Indonesia had earlier called on the European Union to immediately lift tariffs on imports of palm oil biofuels after the World Trade Organization backed several of Jakarta’s key demands in a complaint to the trade body over the abusive restrictions.

Tags: Indonesia, palm oil