Indonesia’s crude palm oil (CPO) prices could rise in 2027 if increasing domestic demand for biodiesel reduces export supplies. The outlook for CPO prices and developments in the global vegetable oil market will be among the key topics at IPOC 2026, scheduled for November 11–13, 2026, at the Bali International Convention Center (BICC), The Westin Resort Nusa Dua, Bali.
AGRICOM, JAKARTA — Indonesia’s palm oil industry association, the Indonesian Palm Oil Association (GAPKI), has warned that rising domestic palm oil consumption for biodiesel production could tighten Indonesia’s export supply and push global vegetable oil prices higher. The association said the resulting supply-demand imbalance could also affect cooking oil prices and other palm oil-based products.
GAPKI Secretary General Hadi Sugeng Wahyudiono made the remarks during a question-and-answer session at a press conference for the 22nd Indonesian Palm Oil Conference (IPOC) and 2027 Price Outlook (IPOC 2026), held at GAPKI’s office in Jakarta on Friday, October 9, 2026.
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Hadi explained that palm oil accounts for approximately 35% of global vegetable oil supply. Given its significant share, changes in Indonesia’s palm oil export volumes can influence global availability, particularly when production of other vegetable oils faces disruptions.
“Palm oil is not the only vegetable oil in the world. It accounts for around 35% of global supply, and the law of supply and demand applies. We are concerned that if more palm oil is absorbed by the domestic market and export volumes decline, especially if harvests of other vegetable oils in Europe are also poor, prices could be pushed higher,” Hadi said at the event attended by PalmOilMagazine.
He said the increase in domestic palm oil consumption for biodiesel production warrants close attention because it could reduce the volume available to international buyers. If this coincides with lower production of other vegetable oils, pressure on global supplies could intensify.
The impact would not be limited to international markets. Higher global prices could also spill over into the domestic market, potentially increasing the cost of cooking oil and a range of other palm oil-based products.
“If prices rise, there will be a knock-on effect on cooking oil and other products. There will be many repercussions, and that is what we need to manage. Once again, the palm oil market is highly sensitive to the balance between supply and demand,” Hadi said.
Indonesia’s Palm Oil Output Targeted at 58.8 Million Tonnes in 2026
Despite the potential market shifts in 2027, GAPKI remains optimistic that Indonesia’s palm oil production will reach 58.8 million tonnes in 2026. This outlook is supported by relatively favorable rainfall throughout the previous year and optimal fertilizer application.
Hadi said these conditions helped oil palm trees withstand the effects of El Niño on this year’s production. Nevertheless, achieving the target remains challenging as dry weather has begun to affect plantation productivity.
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“We hope to achieve the 58.8 million-tonne target, although Ms. Mona said earlier that it would be quite challenging,” he said.
Hadi was referring to comments by GAPKI Treasurer General Mona Surya, who had previously reported a 17–20% decline in the average fresh fruit bunch (FFB) weight at plantations over the past two months due to dry weather.
The decline in average FFB weight is an important indicator for monitoring production trends. If dry conditions persist, the resulting impact on plantation productivity could affect Indonesia’s total palm oil output.
IPOC 2026 to Unveil the 2027 CPO Price Outlook
Hadi did not provide a specific estimate of how much CPO prices might increase in 2027. He said forecasts would be presented by global vegetable oil analysts at IPOC 2026.
One of the analysts expected to draw considerable attention is Dorab Mistry, a senior analyst at Godrej International. His price outlook will be closely watched by industry participants seeking to understand the direction of the palm oil market in the coming year.
Hadi said the current indicators point to a possible price increase, although the extent of any rise will depend on developments in supply, demand, and the broader global vegetable oil market.
“Based on the current indications, prices could rise, yes. As for the figure, we will leave that to the analysts to answer. That is precisely what participants are looking forward to: the price outlook for 2027,” Hadi said.
IPOC 2026 will take place on November 11–13, 2026, at the Bali International Convention Center (BICC), The Westin Resort Nusa Dua, Bali.
The conference will carry the theme “Palm Oil in a Fragmented World: Securing Food, Energy, and Economic Resilience.” It will bring together industry stakeholders and analysts to discuss palm oil price prospects, global trade dynamics, and the challenges of meeting food and energy needs amid shifting international market conditions. (P3)
