Indonesia's new biodiesel policy is expected to support the palm oil market

24-Oct-2025 08:34 PM

Kuala Lumpur. The Malaysian Palm Oil Council (AMPOC) says Indonesia plans to increase the mandatory use of palm oil in biodiesel production from 40% to 50%, while soybean oil exports from Argentina, the United States, and Brazil are declining.

This is likely to complicate the global supply and availability of edible oils and strengthen prices. Increasing the use of palm oil in biodiesel could reduce Indonesia's exportable stocks, benefiting Malaysia.

During September 2025, Malaysia exported 31.2 million tons of palm oil products to India, the highest in 11 months. Trade analysts have warned that rising edible oil prices next year could increase consumer hardship, prompting the government to take necessary action.

A press release issued by Empoc stated that Malaysia's palm oil exports increased significantly during September 2025, particularly with shipments to India increasing significantly.

However, analysts say Malaysia should not be overly optimistic about India. In fact, due to the Dussehra, Diwali, and other important festivals in India in October,

demand and consumption of edible oils were expected to increase, so imports were increased in September. Imports in October may also remain high, but may decline thereafter. From November 2024 to April 2025, palm oil imports into the country decreased significantly.

Total exports of palm oil products from Malaysia increased by 7.7 percent to 1.42 million tons during September compared to August, driven by a significant increase in shipments to South Asia.

Despite this, Malaysia's outstanding surplus palm oil stocks jumped to 2.36 million tons, the highest level in nearly two years.