Indonesia’s palm oil ending stocks forecast to fall to 1.1 million tonnes in Q3 2026

Inventories remain below 2024–2025 levels

Indonesia’s palm oil ending stocks are projected to fall to around 1.1 million tonnes in the third quarter of 2026, pointing to a tight supply balance in one of the world’s principal palm oil suppliers. The forecast by Indonesia Palm Oil Strategic Studies (IPOSS), reported by Katadata’s Databoks, follows an expected temporary recovery to 1.5 million tonnes in the second quarter.

IPOSS defines ending stocks as the inventory remaining after accounting for opening stocks, production, imports, domestic consumption and exports. Its balance-sheet model calculates ending stocks as opening stocks plus production and imports, minus domestic consumption and exports. Changes in any of these components can therefore alter the volume available to the domestic market and overseas buyers.

The research shows a downward inventory trend between the third quarter of 2024 and the third quarter of 2026. Stocks reached their highest point in the period during the fourth quarter of 2024, when they rose to 6.4 million tonnes. The decline began in the first quarter of 2025 and continued until inventories reached only 0.6 million tonnes in the first quarter of 2026.

Production recovery offers temporary relief

IPOSS said the unusually low first-quarter stock level was also affected by a revision that placed exports above earlier estimates. Higher recorded shipments reduce the calculated volume remaining in the country and indicate that the previous supply balance had overstated available inventories.

For the second quarter of 2026, IPOSS projects a rebound in ending stocks to 1.5 million tonnes. The increase is linked to improved production following the Sumatra disaster at the end of 2025. That recovery, however, is not expected to produce a sustained inventory build. Stocks are forecast to decline again in the following quarter as production normalizes and domestic use increases.

At around 1.1 million tonnes, third-quarter inventories would remain above the first-quarter low but below levels recorded during 2024 and 2025. IPOSS said this comparison demonstrates that Indonesia’s palm oil supply balance remains tight even after the projected production recovery.

B50 consumption may restrict exports

Rising domestic consumption, particularly through the implementation of B50, is expected to be a major factor behind the renewed stock decline. Greater allocation of palm oil to the domestic market reduces the amount available for export unless production rises sufficiently or other uses contract. IPOSS considers lower exports a logical adjustment mechanism for preserving domestic supply and preventing inventories from falling further.

The projected reduction in Indonesian export availability may also affect international crude palm oil markets. IPOSS said low inventories could strengthen bullish price sentiment because Indonesia is a major global supplier. For producers, tighter stocks may support prices, while processors and domestic fuel users will be watching whether supply remains adequate. Importers and traders face the possibility of fewer Indonesian cargoes, making production, domestic B50 demand and quarterly export volumes central indicators for the remainder of 2026.