Indonesia’s palm oil stocks fell sharply in August as biodiesel consumption climbed 5.03%, while monthly production edged lower and exports strengthened.
PALMOILMAGAZINE, JAKARTA — Indonesia’s palm oil stocks fell by nearly one-fifth in August 2026 as rising domestic consumption, led by biodiesel, coincided with slightly lower monthly production and stronger exports.
End-August palm oil stocks stood at 2.214 million tonnes, down 19.72% from 2.758 million tonnes at the end of July, according to data from the Indonesian Palm Oil Association (GAPKI).
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The decline highlights the increasing domestic absorption of palm oil as Indonesia expands its biodiesel program, while the industry continues to supply food, oleochemicals and export markets.
GAPKI Secretary General M. Hadi Sugeng Wahyudiono said during a press conference on Friday (Oct. 9, 2026), attended by PalmOilMagazine, that the August stock position reflected the combined impact of production, domestic consumption, exports, imports and beginning stocks.
During January-August 2026, combined production of crude palm oil (CPO) and palm kernel oil (PKO) reached 40.997 million tonnes, while domestic consumption totaled 17.523 million tonnes. Exports stood at 23.370 million tonnes, with imports at approximately 43,000 tonnes.
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Biodiesel Drives Higher Domestic Consumption
Indonesia’s domestic palm oil consumption rose to 2.304 million tonnes in August, up 1.28% from 2.275 million tonnes in July.
The biodiesel sector accounted for most of the increase, consuming 1.350 million tonnes, up 5.03% from 1.285 million tonnes a month earlier.
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Food consumption, by contrast, fell to 775,000 tonnes from 805,000 tonnes, while demand from the oleochemical sector declined to 180,000 tonnes from 185,000 tonnes.
The figures underscore the growing importance of biodiesel in Indonesia’s domestic palm oil demand structure. Cumulatively, domestic consumption reached 17.523 million tonnes during January-August, an increase of 6.81% from the same period in 2025.
Monthly production, meanwhile, edged down 0.50% to 5.343 million tonnes from 5.370 million tonnes in July. On a cumulative basis, however, CPO and PKO production remained 5.02% higher year on year.
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Supply Balance Comes into Focus
The sharp decline in stocks does not necessarily indicate a palm oil supply shortage. However, it highlights the growing importance of maintaining a balance between rising domestic demand—particularly from the energy sector—and export requirements.
For Indonesia’s palm oil industry, the challenge is increasingly twofold: securing sufficient feedstock for the country’s expanding biodiesel program while maintaining supplies for food, oleochemicals and international markets.
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The trajectory of Indonesia’s palm oil balance will depend on several factors in the coming months, including plantation output, biodiesel uptake and export demand.
Improving plantation productivity and processing efficiency will therefore be critical to meeting higher domestic energy demand without undermining Indonesia’s competitiveness in the global palm oil market. (T2)
