Palm oil prices are primed to spike by as much as one-third during the coming months. The Indonesian government is fueling this reversal firestorm with its headlong ramp-up of biodiesel. Industry executives and analysts elaborated on this prediction at the recent Indonesia Palm Oil Conference. The summit was held in Bali, on November 13th and 14th, 2025. The conference successfully engaged key players from the palm oil sector. They are all getting ready for big shifts in their fare structures due to the new policies.
The Indonesian government’s B50 program, which seeks to expand the country’s biodiesel mandate, is anticipated to have an “extreme bullish impact” on palm oil prices. The development program directly encourages the use of palm oil in biodiesel production. In doing so, it seeks to increase demand for this critical but often overlooked commodity. In fact, Indonesia is one of the world’s largest producers of palm oil. So, naturally, its policy decisions have a huge impact on global markets.
Industry analysts have called for a pessimistic outlook on palm oil production expansion. This confluence of factors is fueling a projected increase in home prices. Designing for production challenges lay ahead. The massive increase in demand due to the B50 initiative, along with a tight supply, could trigger major price inflation. Tackling the storm participants at the conference shared their worries and mapped out paths to weather the upcoming shifts in market forces.
The B50 program wields significance beyond Indonesia’s energy transition. It would serve to strengthen the palm oil sector, too. In response to the government’s call to increase biodiesel, stakeholders are already bracing for an increased demand for palm oil. That once a year boom is likely to push prices up. This means the many sectors dependent on palm oil—from food manufacturing to cosmetic companies—will be affected.
Additionally, industry leaders highlighted the importance of closely tracking these trends. They also underscored the importance of proactive strategic planning to avoid risks brought on by price volatility. Many within the sector are already assessing their positions and exploring avenues to leverage the anticipated changes brought about by the B50 program.