Palm oil prices are likely to skyrocket in the months ahead, say experts. Combined with the potential for dynamic pricing, they project a net increase of as much as 30%. So far, the expected increase is primarily attributed to the Indonesian government’s promise to increase its biodiesel mandate. That’s why they’re rolling the B50 program out to make their goal a reality. Speakers from industry and academic sectors made this prediction at the Indonesia Palm Oil Conference 2023. The event was held in beautiful Bali on November 13–14, 2025.
Although the B50 program requires that the biodiesel be at least 50% palm oil, this requirement will create an enormous megatonnage palm oil price spike. Meanwhile, the Indonesian government is intensifying its push to increase biodiesel production. Unfortunately, this initiative will do the opposite—it will raise the overall demand for palm oil, pushing prices up. The conference attendees noted that the combination of government policy and market demand is set to reshape the landscape of the palm oil industry.
In addition to the biodiesel push, there’s a bullish sentiment regarding pricing. Still, the general production growth outlook for palm oil is quite grim. Environmental regulations, limitations on land use, and a heightened focus on sustainability add layers of complexity to the industry’s ability to ramp up new production capacity. Analysts were quick to point out that while prices can be expected to increase, the capacity to respond to this increased demand with new production will be severely limited.
Yet at the confab, the predictions seemed to reflect a growing worry among industry stakeholders. In fact, they are more and more concerned about normalizing the supply-demand relationship. As the B50 program prepares to take full effect, all industry stakeholders should be preparing for a tectonic shift in market forces. Such a change would create more competition among producers that could have larger spillover effects on global palm oil supply chains.