Look for dramatic increases in palm oil prices over the next several months. In fact, some forecasts expect them to grow by as much as 30%! The Indonesian government is doing everything possible to promote biodiesel. Competitively sourced This increase is almost entirely driven by their intent to triple the biodiesel mandate as part of their Jakarta B50 program. Industry executives and analysts jointly unveiled the optimistic forecast at the annual Indonesia Palm Oil Conference. This is why our event in Bali on Nov 13-14 was so powerful.
Experts at the roundtable echoed what many have been saying, that palm oil prices are likely to increase. They blamed this jump on a variety of things, especially the negative outlook for growth in production. The Indonesian government is firmly committed to increasing production capacity of biodiesel. This commitment will already stretch supplies thin enough to raise prices sharply, as palm oil is increasingly used as a biofuel feedstock.
The B50 program seeks to increase the biofuel mixture in diesel fuel to 50%. This project is a big departure from Indonesia’s traditional energy policy. As the world’s largest producer of palm oil, Indonesia’s decisions regarding biodiesel have far-reaching implications for global markets. The government’s deep commitment to renewable energy sources complements the global transition toward sustainability. Yet, this shift raises food security and land use concerns as well.
Yet at every turn during the conference, from every major industry participant—from utilities to producers—there was great concern over the weak production outlook. Regulatory analysts were quick to point out that demand for palm oil is going to increase due to the growing global biodiesel demand. They cautioned that possible production bottlenecks might constrain supply. This mismatch is sure to add upward pressure to prices in the coming months.
The outlook released on Friday, November 14, 2025, reflects national trends that are being seen in the agricultural commodities markets more broadly. Many participants at the conference encouraged more strategic planning in order to limit future price spikes. Stakeholders are urged to adapt to these changes in order to capitalize on emerging opportunities within the biodiesel sector while addressing sustainability challenges.