Indonesia’s biodiesel demand lifts domestic palm oil consumption by 13.59%

Biodiesel accounts for July’s consumption growth

Indonesia’s palm oil consumption increased in July 2026 as the biodiesel sector absorbed substantially more feedstock, strengthening the domestic energy market’s role in the country’s supply balance. According to InfoSAWIT, data from the Indonesian Palm Oil Association, GAPKI, showed national consumption reaching 2.275 million tonnes, up 3.35% from 2.201 million tonnes in June.

Biodiesel accounted for 1.285 million tonnes of the July total, an increase of 13.59% from 1.131 million tonnes a month earlier. The rise was the largest change among the three main domestic uses tracked by GAPKI. Food-sector consumption fell by 8.31% to 805,000 tonnes, while oleochemical use declined by 3.65% to 185,000 tonnes.

Production rises while exports decline

The monthly figures show that stronger biodiesel demand, rather than broad-based growth across consuming industries, drove the increase in domestic absorption. GAPKI Executive Director Mukti Sardjono said the July movement demonstrated that biodiesel needs were the principal support for domestic palm oil demand.

Production also increased, but at a slower rate than biodiesel consumption. Crude palm oil output reached 4.904 million tonnes in July, 1.68% above June. Palm kernel oil production rose to 466,000 tonnes from 449,000 tonnes. Combined CPO and PKO production therefore totaled 5.370 million tonnes, up 1.87% from 5.272 million tonnes in the previous month.

Exports moved in the opposite direction. Indonesia shipped 3.188 million tonnes of palm oil products in July, down 2.67% from 3.275 million tonnes in June. The simultaneous increase in production and domestic consumption does not mean that all additional output was absorbed internally, but the export decline highlights the growing importance of biodiesel when assessing the volume available to overseas buyers.

Domestic energy demand gains weight in supply balance

Indonesia ended July with palm oil stocks of 2.758 million tonnes, according to GAPKI. That inventory provides an important buffer between production, domestic use and exports, particularly as energy demand accounts for a larger share of consumption. For refiners, biodiesel producers and exporters, future monthly movements in stocks will help indicate whether rising internal demand is materially tightening export availability.

The longer-term data also point to sustained growth. Domestic palm oil consumption totaled 15.219 million tonnes in January–July 2026, 6.38% above the 14.306 million tonnes recorded in the same period a year earlier. Biodiesel consumed 7.857 million tonnes during those seven months, compared with 7.232 million tonnes in the corresponding period of 2025.

July’s figures alone do not establish whether biodiesel consumption will continue rising at the same pace through the remainder of the year. They nevertheless show that changes in Indonesia’s energy demand can now have a direct bearing on the balance among inventories, downstream consumption and exports. Export-market participants will consequently need to track biodiesel absorption alongside production rather than treating output growth as an automatic indicator of greater foreign supply.