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Indonesia's palm oil exports to the European Union are expected to rise in 2026, supported by a bilateral trade agreement and the EU's decision to delay its anti-deforestation law for a second time, an industry association head told Reuters on Wednesday.
EU Environment Commissioner Jessika Roswall said on Tuesday that the bloc would push back its deforestation law to next year.
"This delay is good because it gives the government time to prepare, especially smallholders," said Eddy Martono, chairman of the Indonesian Palm Oil Association (GAPKI).
The law had been due to take effect on 30 December, requiring operators selling commodities including soybeans, beef and palm oil into EU markets to prove their products were not linked to deforestation.
Martono said Indonesia's palm oil exports to the EU could rise to around 4 million tonnes in 2026, up from an estimated 3.3 million tonnes this year.
The Southeast Asian nation and the EU signed a free trade agreement on Tuesday after nine years of talks, with both sides aiming to boost exports and investment.
Jakarta's palm oil exports to India are expected to rise to 5 million tonnes in 2025 from 4.8 million tonnes last year, though shipments in 2026 will depend on palm oil prices relative to competing edible oils, Martono said.
He said price dynamics are crucial, as they give India flexibility to switch to cheaper alternatives such as soybean oil from Latin America.
In the near term, palm oil shipments could be partly displaced by soybean oil, after Argentina's removal of export taxes made it cheaper than palm oil, potentially attracting price-sensitive buyers, he said.
Argentina, the world's largest soybean oil exporter, temporarily scrapped export taxes on grains, including soybean products, on Monday.
Source: Reuters