Indonesia’s palm oil exports slow as B50 biodiesel mandate redirects supply
Indonesia’s palm oil export volume rose only 2.5% to 11.28 million tonnes in the first half of 2026, while June crude palm oil shipments fell by about 20%. The B50 mandate, effective from July, could require an additional 1.9 million tonnes for Indonesia’s domestic market.
Export volumes show limited growth
Indonesia’s palm oil exports lost momentum in the first half of 2026 as the world’s largest producer prepared to direct more feedstock into its domestic biodiesel program. Data from Statistics Indonesia, or BPS, published by Jakarta Globe, showed that export volume increased by only 2.5% from a year earlier to 11.28 million tonnes between January and June.
Export revenue reached $12.27 billion, up 7.3% from $11.43 billion in the corresponding period. The pace was considerably slower than in the first half of 2025, when the year-on-year increase was 24.8%. The difference between the growth in value and volume indicates that prices or the composition of shipments supported earnings even as physical export growth remained modest.
June shipments decline before policy impact
The slowdown became more visible in June. Crude palm oil export revenue declined by 0.4% to $393.7 million, while shipment volume fell by about 20% to 335,400 tonnes. The sharp reduction in tonnage came before the official statistics reflected the effect of the new B50 biodiesel standard.
BPS deputy head Ateng Hartono said the available reports did not yet include the impact of B50, which took effect in July. The policy raised the palm oil share in Indonesia’s biodiesel blend from 40% to 50%. Hartono said the practical effect should become clearer in the coming months, with final outcomes depending on production, total supply, domestic demand and global prices.
Domestic biodiesel demand competes with exports
The Indonesian Palm Oil Association, known as Gapki, estimates that the B50 mandate will require about 1.9 million additional tonnes of crude product for the domestic market. Total palm oil consumption under the government’s biodiesel program could reach 14.6 million tonnes. This creates direct competition between fuel use at home and shipments to international buyers.
Gapki has warned that exports could fall sharply if production growth fails to cover the increase in domestic requirements. For producers and processors, the mandate provides a large state-backed outlet, but exporters may have less material available. Importers and vegetable-oil processors outside Indonesia will therefore be watching harvest growth, inventories and monthly export data for signs of tighter supply. The policy is intended to reduce Indonesia’s dependence on imported fossil fuels, but its international impact will depend on whether higher biodiesel consumption is matched by additional palm oil production.
