Indonesia: Palm Oil Prices Rise on Strong Biodiesel Demand and Slowing Production
15-Oct-2025 11:35 AM
New Delhi. Crude palm oil (CPO) prices have seen an upward trend over the past few days. Palm oil stocks peaked in September and are expected to decline from October, which could support prices in the near to medium term.
In Malaysia, stocks rose by 7.2% month-on-month to 2.36 million tons by the end of September, reaching nearly a two-year high. Meanwhile, production fell 0.73% to 1.84 million tons, marking the first decline in three months. Increased export demand has balanced the downward pressure.
Government policies and biodiesel expansion in Indonesia are shaping market direction. Recently, the government handed over 1.8 million hectares of seized palm oil land to a state-owned company.
The B40 biodiesel policy, implemented in January, has significantly increased domestic consumption. By mid-July, biodiesel consumption reached 7.42 billion liters, equivalent to roughly an additional 2 million tons of domestic demand. The government is now conducting road tests for the B50 blend (50% palm oil), planned for implementation in 2026.
A strong ringgit and weakness in vegetable oils on the Dalian market have limited further price increases.
Malaysia’s Plantation Ministry forecasts that the average CPO price in 2026 will range between 3,900–4,100 ringgit per ton, owing to expected improvements in global supply and higher production of competing oils.