Indonesia’s palm oil output forecast to rise to 50.31 million tonnes in 2026

Output forecast points to a gradual recovery

Indonesia’s palm oil production is forecast to reach 50.31 million tonnes in 2026, extending a recovery from the decline recorded in 2024. The estimate is based on the MODUS forecasting model presented by Rizki Amalia of the Indonesian Oil Palm Research Institute, known as PPKS, during the 2026 Plantation Commodity Outlook event in Bogor on 28 October 2025, according to InfoSAWIT.

The model places 2025 production at 49.50 million tonnes. Output would therefore increase by 810,000 tonnes, or about 1.6%, in 2026. The projected improvement follows a more pronounced year-on-year recovery in 2025 from the 48.16 million tonnes recorded in 2024.

Actual production stood at 50.84 million tonnes in 2023 before falling by 2.68 million tonnes in 2024. Even if the 2026 forecast is achieved, national output would remain 530,000 tonnes below the 2023 level. The figures indicate a recovery in supply rather than a return to rapid production growth.

Drought recovery and fertilizer use support yields

InfoSAWIT said one factor behind the forecast increase is the recovery of plantations from the drought experienced in 2023. Dry conditions can affect oil palm development and productivity beyond the immediate weather event, meaning an improvement in plant condition may only become visible in production during subsequent periods.

Higher fertilizer application is another supportive factor. The outlook presentation said fertilizer use had increased as fertilizer prices recovered, helping growers maintain tree condition and yields. For producers, this creates scope to raise output from existing plantations without relying solely on an expansion of planted area. It also makes the forecast sensitive to production costs and growers’ continued ability to finance adequate agricultural inputs.

Ageing plantations remain the central constraint

The industry still faces pressure from the rising average age of Indonesia’s oil palms. A growing share of old and ageing trees could constrain productivity unless replanting accelerates, particularly on smallholder plantations. From 2016 through 2025, completed replanting covered about 384,618 hectares and involved 169,494 growers, according to data recorded through May 2025. Approximately Rp10.86 trillion had been disbursed under the program.

Implementation continues to be held back by socioeconomic conditions, administrative and technical requirements, financing mechanisms and the readiness of program partners. The outlook linked delayed replanting to the risk of lower national productivity and an imbalance between palm oil supply and demand. The projected addition of 810,000 tonnes in 2026 could improve the volume available to domestic users and export markets, but the source did not provide separate consumption or export forecasts. For producers, processors and traders, the key question is whether yield improvements can persist while a larger share of plantations approaches the point at which replanting is unavoidable.