InfoSAWIT, JAKARTA — Chairman of the Indonesian Palm Oil Entrepreneurs Association (GAPKI), Eddy Martono, views the government's plan to increase the biodiesel blend to B50 needs to be carefully considered. According to him, this policy has the potential to increase crude palm oil (CPO) prices, as it will directly affect domestic supply and the balance of the global vegetable oil market.
“The government's effort to increase the biodiesel blend to 50% is indeed positive for promoting downstreaming and green energy, but on the other hand, it could drive up prices because more CPO supply will be absorbed domestically,” said Eddy at the GAPKI Press Conference attended by InfoSAWIT, Tuesday (October 29, 2025) in Jakarta.
He explained that the experience in 2024 can be an important lesson. At that time, palm prices were temporarily higher than other vegetable oils, so export demand decreased. “A similar condition could happen again if palm prices rise too high. The international market could temporarily switch to other vegetable oils like soybeans or sunflowers,” he said.
Production Expected to Increase, But Still Limited
Nevertheless, Eddy estimates that national palm oil production in 2025 will still increase, albeit not significantly. “Production is still in the range of 54 to 55 million tons, slightly up from last year. However, there are other influencing factors, including weather conditions and availability of superior planting materials,” he said.
He also mentioned new hopes for productivity improvement through the use of new pollinating insects currently being developed. “We hope the results can be seen in 2026,” he added optimistically.
DMO Policy and Its Impact on Prices
Regarding the Domestic Market Obligation (DMO) for palm oil, Eddy admitted that his party is still waiting for clarity from the government, especially the Ministry of Energy and Mineral Resources (ESDM). “We don't know for sure yet whether the DMO policy will be directly linked to exports or not. If the DMO is later increased and there are additional costs in it, of course it will impact the decline in CPO and FFB prices at the farmer level,” he explained.
Eddy emphasized that every palm-based energy policy needs to consider the balance between industry interests, export markets, and farmer welfare. “The important thing is that policies must support each other — downstreaming progresses, renewable energy grows, but palm prices remain stable,” he concluded. (T2)
