BMD crude palm oil prices climbed to $993/mt this week, reflecting market responses to production forecasts and policy discussions at the IPOC (Indonesian Palm Oil Conference and Price Outlook) conference in Indonesia. The gathering of industry experts revealed diverging views on supply trends and Indonesia’s biofuel ambitions, creating uncertainty for procurement managers planning 2026 contracts.

Production forecasts signal tighter supply

Market analysts LSEG and OilWorld project palm oil production in Malaysia and Indonesia will decline by 1-1.5 million metric tons next year. This reduction contrasts with more optimistic projections from other conference participants. GAPKI anticipates Indonesian production alone could grow by 3-4%, while Dorab Mistry expects global palm oil production to increase by 1-1.5 mmt, and CPOPC forecasts production will remain flat.

The conflicting forecasts reflect uncertainty in yield expectations and differing methodologies for calculating output across major producing regions.

Land seizure impact remains uncertain

Market experts discussed the potential effects of illegal plantation land seizures in Indonesia on future production. According to Glenauk Economics, while these enforcement actions will affect output, the impact is likely to become visible only in the longer term rather than immediately affecting 2026 supply.

Indonesia’s biodiesel program creates additional demand

GAPKI indicated that B45 biodiesel blending as an intermediate step in 2026 is possible, which would require an additional 2-2.5 mmt of palm oil. However, both GAPKI and Glenauk Economics suggest that implementation of B50 in 2026 is unlikely.

Despite uncertainty around the B50 timeline, the majority of experts at the conference maintain a bullish outlook for palm oil prices in 2026 due to expected supply reduction, even with a potential delay in B50 implementation.

EUDR postponement under consideration

In related regulatory developments, reports suggest an EU negotiating draft proposes postponing the European Union Deforestation Regulation (EUDR) to 30 December 2026 for larger companies and to 30 June 2027 for smaller firms. A vote is expected in the coming weeks, likely before mid-December.

Market outlook

The conference discussions highlighted competing pressures on palm oil markets. Production declines in major origins, Indonesia’s existing B40 mandate and potential B45 expansion, and land policy enforcement could support prices. However, the delayed B50 implementation and uncertainty in production forecasts create variables for procurement managers to monitor.

Palm oil currently trades at a $55/mt discount to soybean oil on a CIF India basis, maintaining competitive positioning in global vegetable oil markets. The November-February period typically sees lower production due to heavy rainfall, which could provide additional price support in the coming months.

This article is part of a more comprehensive palm oil market analysis. For the full analysis, visit: https://app.vespertool.com/market-analysis/2454