CPO Price Surges Amid Indonesia's Biodiesel Policy and El Nino Risks

Jakarta, SAWIT INDONESIA – The price of crude palm oil (CPO) is expected to surge in the second half of 2026, driven by Indonesia's biodiesel policy, El Niño weather risks, and high prices of competing vegetable oils.

Maybank Investment Bank analyst Ong Chee Ting said, as quoted by Dow Jones Newswires, Thursday (6/11/2026), the implementation of Indonesia's biodiesel B50 program, which requires a 50% blend of palm oil-based fuel, has the potential to increase domestic demand and support CPO prices.

In addition, the new export policy and stronger El Niño risks are also expected to impact the dynamics of the palm oil market in the second semester of 2026.

According to Ong, data on shipments at the beginning of June showed signs of recovery.

However, below-normal rainfall and the possibility of El Niño could reduce fresh fruit bunch (FFB) production in the coming months, potentially pushing up palm oil prices.

Despite this, Maybank maintains a neutral recommendation for the Southeast Asian plantation sector.

Similar views were expressed by CGS International analysts Jacquelyn Yow and Prem Jearajasingam.

They predict a CPO price surge in the second half of this year, supported by the potential El Niño risks that could disrupt production, and high prices of soybean oil and rapeseed oil driven by increasing global biofuel demand.

CGS also predicts a decrease in palm oil supplies in June, supported by a decline in exports from Indonesia and increased domestic consumption through Malaysia's B12 biodiesel program.

No music content detected, skipping Youtube or Spotify embed code.

Save my name, email, and website in this browser for the next time I comment.

Penerbit PT Multi Sarana Media

Alamat Redaksi KO Green Lake View Depok I/ 23 RT 004 RW 22, Sukatani, Tapos Kota Depok, Jawa Barat - 16453

Telp/Fax: 021– 37848025 Hotline/Whatsapp: 0815 1951 4249, 0812 8762 8700

Hak cipta ‭ 2026 PT Multi Sarana Media. Hak cipta dilindungi undang-undang.Dikembangkan oleh Majalah Sawit Indonesia Development Tim.