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Global palm oil prices are expected to rise by up to 8% in 2026, driven by increased demand for biofuels and high energy prices. According to the latest "Commodity Markets Outlook" report from the World Bank, prices are projected to reach approximately $1,089 per ton, up from $1,007 in 2025, before stabilizing in 2026.
The main driver behind this increase is the growing demand for raw materials used in biofuel production, as high energy costs push countries to seek alternative energy sources. Both palm oil and soybean oil are seeing strong consumption due to their essential role in biodiesel production.
However, further price gains are expected to be limited by supply factors. The World Bank noted that the availability of vegetable oil exports may decrease as major producing countries increase their domestic use of palm and soybean oil for biofuel production.
Overall, global food markets are expected to remain relatively stable, with food prices projected to rise by only about 2% in 2026 thanks to ample supply conditions. For Indonesia, the world's largest palm oil producer, the outlook indicates stable export demand rather than sharp price jumps.
Production is also expected to gradually recover after previous declines. At the same time, rising input costs, especially fertilizers, may squeeze producers' profit margins, while high energy prices will continue to impact both agricultural markets and the broader global economy.
Source: Jakarta Global
