Indonesia biodiesel pause and rising supply to weigh on palm oil prices
Analysts expect palm oil prices to face pressure as Indonesia halts biodiesel expansion and production rises. Strong Indian demand may limit the price decline.
Indonesia 
ID has announced a pause in its biodiesel expansion and has shelved plans to mandate 50% biodiesel blending, a development that reduces an anticipated source of domestic palm oil demand. This policy change, confirmed as of February 11, 2026, is likely to put downward pressure on palm oil prices as it coincides with expectations of marginally higher palm oil output in 2026. The decision alters near-term market balances for the Southeast Asian palm oil sector at a time when regional supply dynamics are already under scrutiny.
ID has announced a pause in its biodiesel expansion and has shelved plans to mandate 50% biodiesel blending, a development that reduces an anticipated source of domestic palm oil demand. This policy change, confirmed as of February 11, 2026, is likely to put downward pressure on palm oil prices as it coincides with expectations of marginally higher palm oil output in 2026. The decision alters near-term market balances for the Southeast Asian palm oil sector at a time when regional supply dynamics are already under scrutiny.
