PALMOILMAGAZINE, BALI — Global palm oil production is expected to show little to no growth in 2026, as a combination of weather disruptions, rising input costs, and aging plantations continues to restrict output. The outlook was outlined by Chandran Gunalan, Director of Strategy and Policy at the Council of Palm Oil Producing Countries (CPOPC), during a palm oil industry conference held in Bali in mid-November 2025.
Gunalan projected that global palm oil production next year will hover around 82 million tons—largely unchanged from this year and only slightly higher than the estimated 79 million tons recorded in 2024.
La Niña and Aging Trees Pose Major Obstacles
Gunalan noted that the intensity of the La Niña weather pattern will be a key determinant of whether global output rises or falls. The wetter conditions associated with La Niña can hinder harvesting operations across major producing regions.
He added that productivity is being further constrained by a growing share of oil palm trees in Malaysia that are now over 25 years old, along with slow replanting progress in Indonesia. Older trees produce significantly fewer fresh fruit bunches, dragging down national output.
As the world’s top two producers, both Indonesia and Malaysia are also expected to experience muted production growth in 2026. Gunalan estimates Indonesia’s output at around 50 million tons and Malaysia’s at roughly 20 million tons.
Another factor weighing on yields is the surge in fertilizer prices over the past two years. Many growers, particularly smallholders, have reduced application rates to cut costs—directly impacting harvest volumes. “Lower fertilizer use will inevitably affect yields,” Gunalan said, as quoted by Palmoilmagazine.com from Bloomberg.
He also highlighted concerns over palm oil estates in Indonesia that have been seized by the government. Many of these areas remain idle, raising the risk that they could turn into abandoned land unless managed under a structured intervention.
Latin America Shows Gradual Growth
While Asia’s major producers face stagnation, Latin America is demonstrating a more positive trend. Expansion of plantation areas has supported a gradual rise in production. Colombia, for example, is expected to produce around 2 million tons this year, up from 1.9 million tons in the previous year.
CPOPC Continues Diplomatic Push on EUDR
Amid production challenges, CPOPC is intensifying diplomatic engagement with global policymakers. Gunalan noted that CPOPC representatives have recently met with members of the European Parliament and EU officials to discuss the implementation of the EU Deforestation Regulation (EUDR).
A key focus of these talks is ensuring that smallholders have a realistic and accessible pathway to comply with the regulation’s stringent requirements. (P2)
