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Indonesia expects palm oil production to grow by 10% in 2025, reaching 56-57 million tonnes, surpassing earlier forecasts. The increase is attributed to favourable weather conditions and strong prices, which encouraged farmers to manage their plantations more carefully, according to the Indonesian Palm Oil Association (GAPKI).
GAPKI Secretary General M. Hadi Sugeng noted that weather conditions in 2024-2025 were ideal, without prolonged heavy rainfall, while last year's high prices motivated farmers to improve plantation management. This provides optimism for achieving higher yields compared with the previous year.
The association revised its annual forecast from 53.63 million tonnes to 56-57 million tonnes. A production level of 57 million tonnes would represent an 8% increase over 2024. Meanwhile, Indonesia's palm oil exports are expected to rise to 30-31 million tonnes, up from 29 million tonnes in 2024, offsetting growing domestic demand driven by the B40 biodiesel programme, which raised the mandatory blending rate to 40%.
In August 2025, Indonesia's palm oil stocks fell slightly to 2.54 million tonnes, down 1% from the previous month. Crude palm oil production reached 5.06 million tonnes, while total palm oil exports stood at 3.47 million tonnes, down 1.8% from July.
For 2026, GAPKI expects a further 5% increase in production and plans to use pollinating insects to transfer pollen from male to female flowers, stimulating fruit formation. This approach is expected to boost yields in late 2026 or early 2027, ensuring stable production levels and greater efficiency across Indonesian plantations.
Source: Al Mal Forum