Palm Oil Production in Indonesia Expected to Reach 48 Million Tons

28-Apr-2026 01:54 PM

Jakarta. In Indonesia—the world's leading producer and exporter of palm oil—production of this vital vegetable oil is projected to increase by 3 percent. According to the U.S. Department of Agriculture (USDA), palm oil production in the country stood at 46.7 million tons during the 2025–26 season; this figure is estimated to rise by 1.3 million tons in the 2026–27 season, reaching a total of 48 million tons.

One contributing factor to this growth is that the plantations established between 2021 and 2024 have now begun to yield higher palm production. Furthermore, these plantations have predominantly utilized seeds of advanced and improved palm varieties known for their high yield rates. However, despite these positive factors, there was no significant expansion or development of oil palm plantations in Indonesia during 2025.

Both the production and consumption of palm oil in Indonesia continue to rise steadily. A decision has been made to implement the 'B50 Program' starting July 1, 2026, which will make it mandatory to incorporate 50 percent palm oil into biodiesel blends.

Currently, the blending ratio stands at 40 percent. This initiative is expected to significantly boost domestic demand and consumption of palm oil, thereby reducing the volume of stock available for export purposes. India imports the largest share of its palm oil requirements from Indonesia.

During the current year, Indonesia may also have to contend with the adverse effects of the El Niño weather cycle, raising concerns that palm yields could be negatively impacted during the second half of 2026. Consequently, any increase in palm oil production is likely to be limited.

Indonesia's meteorological agency has indicated that the dry season is likely to commence somewhat earlier this year, which could exacerbate irrigation challenges within palm plantations. This situation is expected to pose particular difficulties for small-scale producers. Domestic palm oil consumption is estimated to rise by 2 percent, reaching 23.1 million tonnes.