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Indonesia’s 2027 Palm Oil Policy Shift May Tighten Supply
Indonesia is planning major changes to how it sells palm oil in 2027.
A state-owned organization is expected to manage exports of important commodities, including crude palm oil.
Indonesia also plans to create an exchange to set its own reference prices.
The country is moving toward using a fuel blend with 50 per cent biodiesel.
Making more biodiesel at home could mean less palm oil is available to sell abroad.
GAPKI says that tighter supply could push global prices higher.
Indonesia produces about 57.5 per cent of the world's palm oil.
GAPKI says clear rules and good management will be important for buyers.
GAPKI outlined three proposed policy changes at GLOBOIL India 2026 in Mumbai on September 30.
From January 1, 2027, state-owned PT Danantara Sumberdaya Indonesia is expected to become exporter of record for strategic commodities, including crude palm oil.
Indonesia plans to launch the Strategic Minerals and Commodities Exchange, or BMKS, on January 1, 2027, to establish domestic reference prices.
Indonesia is moving toward a B50 biodiesel mandate, which would make biodiesel 50 per cent of the fuel blend.
GAPKI said increased domestic biodiesel use could reduce export availability and put upward pressure on global palm oil prices.
- Who
- The Indonesian Palm Oil Association (GAPKI), including Dr Mohamad Fadhil Hasan.
- What
- GAPKI outlined proposed 2027 changes to palm oil export governance, commodity pricing and domestic biodiesel use.
- Where
- Mumbai, India.
- When
- The briefing took place on September 30 at GLOBOIL India 2026; the changes are targeted for 2027.
- Why
- The briefing aimed to clarify Indonesia's changing regulations and their possible effects on palm oil availability and prices.
Key facts
- Indonesia's share of global palm oil supply
- About 57.5 per cent
- Export transition period
- June 1 to December 31, 2026; exporters can sell directly but must report transactions to the state entity.
- Expected single-gate export start
- January 1, 2027
- Planned exchange launch
- January 1, 2027
- B50 blend
- Biodiesel would account for 50 per cent of the fuel blend.
- Potential market effect
- GAPKI says higher domestic use could tighten export availability and put upward pressure on global prices.
- GAPKI's exchange priorities
- Transparency, strong liquidity, traceability, efficient data sharing and freedom from conflicts of interest.
Sources
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