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Informist, Saturday, Aug. 9, 2025

MUMBAI – Indonesia's palm oil exports in 2024-25 (Oct-Sept) is revised down to 22.8 million tonnes due to 40% biofeul blending mandate and reduced demand from key markets, according to the Foreign Agricultural Service of the US Department of Agriculture. In May, palm oil exports were projected at 23.0 million tonnes.

However, USDA Foreign Agricultural Service has maintained its estimate for 2025-26 Indonesian palm oil exports at 24.0 million tonnes. Indonesia has been implementing 40% mix of palm oil-based fuel in biodiesel from January, known as B40.

Palm oil shipments during Oct-May was 14 million tonnes, down 3% from the corresponding period last year. Palm oil prices rose 24% compared with same period last year, faster than other vegetable oils such as soybean oil which rose only 7% during the same period. Buyers shifted to non-palm oil amid narrowing price spread with other competing vegetables oils.

"Higher shipments to Pakistan and Bangladesh were unable to offset decreasing combined demand from India, China, and US," USDA foreign arm said. Palm oil shipments to US have come down amid higher prices and tariff-related uncertainty.

"Earlier, when palm oil became expensive, the whole HoReCa (hotel, restaurant, and catering) sector... started using alternative oils like rice bran oil... now that reverses," Indian Vegetable Oil Producers' Association President Sudhakar Desai told Informist earlier. Palm oil imports during Nov–Jun were down over 24% on year at 3.25 million tonnes, Solvent Extractors' Association of India data showed.

However, Desai said imports are likely to "catch up in the coming months" as palm oil has become more affordable and the government's widening of the duty differential between crude and refined oils incentivises domestic refiners. India may import 9.0 million tonnes palm oil in 2024–25 (Nov–Oct), he added. 

Meanwhile, Indonesia's palm oil output is projected 3% higher on year at 47 million tonnes in 2025-26 amid favorable weather and adequate fertilizer use. 

"Overall, Indonesia's oilseed sector faces a delicate balance between production gains, demand fluctuations, and trade policy changes, with weather and currency trends playing a decisive role," Kedia Advisory, said in a note. End

Reported by Afra Abubacker

Edited by Akul Nishant Akhoury

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