Palm Oil Consumption in Indonesia Projected to Increase in 2026

The Indonesia Palm Oil Strategic Studies (IPOSS) report indicates that palm oil consumption in Indonesia has consistently increased during the 2020-2025 period.

The palm oil consumption referred to includes crude palm oil (CPO) and crude palm kernel oil (CPKO) for the food, biodiesel, and oleochemical sectors.

"Overall, domestic palm oil consumption in Indonesia is expected to continue increasing," IPOSS wrote in the *Indonesia Palm Oil Industry Outlook 2026*.

IPOSS explained that total consumption is projected to reach 27.67 million tons by 2026, an increase of almost 10 million tons compared to 2020, when it was only 16.52 million tons.

This increase in consumption is influenced by several factors, especially the expanding biodiesel program and the growing population, which increases food demand.

IPOSS gave an example: in 2020, total palm oil consumption for biodiesel was relatively low at around 7.23 million tons. However, by 2026, it is projected to reach 15.74 million tons, accounting for almost 57% of total domestic consumption.

"This 2026 projection assumes B40 in the first half of 2026, followed by B50 in the second half of 2026, which will lead to an increase in palm oil consumption for biodiesel by 2.43 million tons," it explained.

Meanwhile, consumption for food is increasing in line with population growth. However, its proportion is predicted to decrease because in 2020, 42% of palm oil was used for food, but this year it is estimated to be less than 30%.

As for the oleochemical sector, it shows stable growth from 2.35 million tons in 2020 and is predicted to reach 3.73 million tons by 2025, in line with the development of downstream industries.

"This significant increase in palm oil consumption for biodiesel reflects a major shift in Indonesia's domestic demand structure," it stated.