InfoSAWIT, JAKARTA — Indonesia’s biodiesel sector drove a sharp increase in domestic palm oil consumption in July 2026, underscoring the growing role of the energy market in absorbing the country’s palm oil output.

The Indonesian Palm Oil Association (GAPKI) recorded domestic palm oil consumption of 2.275 million tonnes in July, up 3.35% from 2.201 million tonnes in June. Biodiesel accounted for the largest increase, with consumption rising 13.59% month on month to 1.285 million tonnes, from 1.131 million tonnes previously.

According to GAPKI Executive Director Mukti Sardjono, the increase in biodiesel consumption stood out against declines in the food and oleochemical sectors.

Palm oil consumption for food fell 8.31% to 805,000 tonnes, while demand from the oleochemical industry declined 3.65% to 185,000 tonnes.

The figures, released in a statement received by InfoSAWIT on Tuesday, October 6, 2026, indicate that the monthly increase in domestic palm oil consumption was primarily driven by biodiesel demand rather than broad-based growth across industrial users.

Domestic Consumption Continues to Expand

Cumulatively, Indonesia’s domestic palm oil consumption reached 15.219 million tonnes during January–July 2026, an increase of 6.38% from 14.306 million tonnes in the same period last year.

Production also strengthened in July. Crude palm oil (CPO) output reached 4.904 million tonnes, up 1.68% from June, while palm kernel oil (PKO) production increased to 466,000 tonnes from 449,000 tonnes.

Combined CPO and PKO production totaled 5.370 million tonnes in July, rising 1.87% from 5.272 million tonnes a month earlier.

However, higher production and domestic consumption did not translate into stronger exports. Shipments of palm oil products declined 2.67% to 3.188 million tonnes in July, compared with 3.275 million tonnes in June.

Indonesia’s palm oil stocks stood at 2.758 million tonnes at the end of July, providing another key indicator of the balance between production, domestic demand and exports.

Biodiesel Strengthens Its Position in the Palm Oil Market

Biodiesel consumption reached 7.857 million tonnes cumulatively during January–July 2026, up from 7.232 million tonnes in the corresponding period of 2025.

The increase highlights the expanding importance of the domestic energy sector as a source of demand for Indonesian palm oil. As biodiesel absorbs a larger share of the commodity, developments in fuel policy and feedstock requirements are becoming increasingly relevant to the industry’s demand outlook.

Nevertheless, the July figures alone do not establish whether the stronger biodiesel demand will continue throughout the year or how it will affect the overall supply balance.

For Indonesia’s palm oil industry, the latest data point to a domestic market increasingly shaped by energy demand, while export performance, production levels and inventory movements remain essential factors in determining the broader market outlook. (T2)