InfoSAWIT, JAKARTA – Indonesia’s palm oil industry faced mounting pressure in March 2026 as production, domestic consumption and exports all weakened compared with the previous month. Despite the slowdown, national palm oil inventories posted an increase, reflecting softer market absorption.
According to the latest report from the Indonesian Palm Oil Association (GAPKI), combined crude palm oil (CPO) and palm kernel oil (PKO) production reached 4.821 million tonnes in March 2026, representing a 12.35% decline from February’s 5.500 million tonnes.
The decrease was primarily driven by lower CPO production, which dropped to 4.403 million tonnes from 5.015 million tonnes a month earlier. PKO output also declined to 418,000 tonnes from 485,000 tonnes.
“March 2026 CPO+PKO production reached 4.821 million tonnes, or 12.35 percent lower compared with the previous month,” said GAPKI Executive Director Mukti Sardjono in an official statement received by InfoSAWIT.
Annual Production Still Shows Growth
Although monthly performance weakened, Indonesia’s palm oil industry continued to record positive year-on-year growth.
Cumulative CPO and PKO production during January–March 2026 reached 15.558 million tonnes, up 18.44% from 13.135 million tonnes recorded during the same period in 2025.
Domestic consumption also softened during March.
Total domestic usage stood at 2.115 million tonnes, down 8.25% from 2.305 million tonnes in February. The largest decline occurred in the food sector, where consumption fell 9.03% to 897,000 tonnes.
Biodiesel consumption slipped 7.71% to 1.056 million tonnes, while oleochemical demand contracted 7.43% to 162,000 tonnes.
Exports Drop Sharply, Stocks Climb
On the export front, Indonesia shipped 2.168 million tonnes of palm oil products in March 2026, marking a steep 34.25% fall from February’s 3.297 million tonnes.
The sharpest decline occurred in CPO exports, which plunged 75.61% to only 96,000 tonnes from 395,000 tonnes previously. Refined palm oil exports fell 33.57% to 1.506 million tonnes, while processed palm kernel oil exports dropped 44.67% to 94,000 tonnes.
Oleochemical exports, however, managed to buck the trend, posting a modest 1.42% increase to 468,000 tonnes.
By destination, export declines were most notable to China, India, Pakistan, Bangladesh, Africa, the Middle East, Malaysia, the United States and the European Union. Russia remained one of the few markets recording stronger demand.
The value of Indonesia’s palm oil exports also weakened, slipping from US$3.69 billion in February to US$2.61 billion in March, down 29.27%.
Nevertheless, cumulative export earnings for January–March 2026 still rose to US$9.66 billion, an increase of 10.40% compared with US$8.75 billion during the same period last year.
“The year-on-year increase in export value was supported by higher export volumes and the January–March 2026 average CIF Rotterdam price of US$1,356 per tonne,” Mukti noted.
With opening stocks of 2.026 million tonnes, March production of 4.821 million tonnes, domestic consumption of 2.115 million tonnes and exports totaling 2.168 million tonnes, Indonesia’s closing palm oil inventory rose to 2.568 million tonnes—well above February’s 2.026 million tonnes.
The latest data suggests that while Indonesia’s palm oil industry faced short-term headwinds in March 2026, its longer-term fundamentals remained supported by stronger annual production and export value growth. (T2)
