Biodiesel absorbed 1.285 million tonnes of palm oil in July 2026, helping lift total domestic consumption 3.35% despite lower demand from the food and oleochemical sectors.
PALMOILMAGAZINE, JAKARTA — Indonesia’s biodiesel sector emerged as the main driver of domestic palm oil demand in July 2026, as consumption for energy applications rose sharply despite weaker demand from the food and oleochemical industries.
Data from the Indonesian Palm Oil Association (GAPKI) showed that domestic palm oil consumption reached 2.275 million tonnes in July, up 3.35% from 2.201 million tonnes in June.
Also Read: Indonesia Sets October 2026 Biodiesel HIP at IDR 15,072/Liter, Excluding Transport Costs
Biodiesel accounted for the largest share of the increase, with consumption reaching 1.285 million tonnes, up 13.59% from 1.131 million tonnes a month earlier.
GAPKI Executive Director Mukti Sardjono said the increase in biodiesel consumption was the most significant movement among the three major domestic palm oil demand segments. Food consumption fell 8.31% to 805,000 tonnes, while oleochemical consumption declined 3.65% to 185,000 tonnes.
“The movement shows that the increase in domestic palm oil absorption in July was primarily driven by biodiesel demand, rather than broader growth across all industrial sectors,” Mukti said in a statement received by PalmOilMagazine on Tuesday (Oct. 6, 2026).
Also Read: Indonesia’s Palm Oil Industry Drives Sustainable Economic Transformation
On a cumulative basis, domestic palm oil consumption reached 15.219 million tonnes in January–July 2026, up 6.38% from 14.306 million tonnes in the same period last year.
Production Also Increases
Indonesia’s palm oil production also expanded in July. CPO production reached 4.904 million tonnes, up 1.68% from June.
Production of palm kernel oil (PKO) increased to 466,000 tonnes from 449,000 tonnes a month earlier.
Also Read: KPBN Inacom CPO Price Falls to IDR 14,625/kg on Wednesday (Oct. 7), Malaysia CPO Futures Weaken
Combined CPO and PKO production therefore reached 5.370 million tonnes in July, an increase of 1.87% from 5.272 million tonnes in June.
However, higher production and domestic consumption did not mean that all additional output was absorbed by the domestic market. Palm oil exports fell 2.67% to 3.188 million tonnes in July from 3.275 million tonnes in June.
GAPKI data also showed that Indonesia’s palm oil stocks stood at 2.758 million tonnes at the end of July, providing an important indicator of the balance between production, domestic demand and exports as energy-sector demand continues to expand.
Also Read: GAPKI: Indonesia’s Palm Oil Output Slips in May 2026, but CPO Stocks Rise to 3.04 Million Tons
Biodiesel consumption reached 7.857 million tonnes cumulatively during January–July 2026, compared with 7.232 million tonnes during the same period a year earlier.
The increase highlights the growing role of the energy sector in Indonesia’s palm oil demand structure. As biodiesel consumption expands, domestic demand is becoming an increasingly important component of the country’s overall palm oil market dynamics.
However, monthly data alone are not sufficient to determine whether the sharp increase in biodiesel consumption will persist through the remainder of the year or how sustained energy demand will affect Indonesia’s overall palm oil supply balance. (P2)
