Palm Oil Rally Possible Upon Implementation of B50 Program in Indonesia

31-Mar-2026 03:57 PM

Singapore. Currently, a regulation mandating the use of 40 percent palm oil in biodiesel exports is in effect in Indonesia; however, the government is planning to increase this requirement to 50 percent. If this regulation—known as the B50 program—is implemented, it could trigger a rise in palm oil prices in the international market.

Industry observers suggest that the implementation of the B50 program would lead to an additional annual consumption of 4 million tons of palm oil in Indonesia's biodiesel production sector, resulting in a significant depletion of the country's exportable stocks. Consequently, this would reduce the global supply and availability of palm oil, thereby driving up prices.

An analytics firm has projected that the average price of Crude Palm Oil (CPO) could hover around 4,400 Ringgit per ton in 2026. On March 30, the President of Indonesia stated that efforts would be made to implement the B50 plan this year, which would increase the proportion of palm oil used in biodiesel production to 50 percent.