InfoSAWIT, JAKARTA – Indonesia’s palm oil stocks fell sharply in August 2026 as domestic consumption increased, led by stronger biodiesel demand, while exports also strengthened. The decline came as monthly production edged lower, tightening the country’s end-of-month inventory position.
Data from the Indonesian Palm Oil Association (GAPKI) showed that ending stocks stood at 2.214 million tonnes in August, down 19.72% from 2.758 million tonnes in July.
Hadi Sugeng Wahyudiono, GAPKI’s Secretary-General, explained at a press conference attended by InfoSAWIT on Friday, October 9, 2026, that ending stocks reflected the combined effects of production, domestic consumption, exports, imports and opening inventories.
From January to August 2026, Indonesia produced a combined 40.997 million tonnes of crude palm oil (CPO) and palm kernel oil (PKO). Domestic consumption reached 17.523 million tonnes, while exports totalled 23.370 million tonnes and imports stood at 43,000 tonnes.
Biodiesel Drives Domestic Demand
Domestic palm oil consumption reached 2.304 million tonnes in August, up 1.28% from 2.275 million tonnes in July.
Biodiesel accounted for the largest increase, with consumption rising 5.03% to 1.350 million tonnes from 1.285 million tonnes a month earlier.
By contrast, consumption for food products declined to 775,000 tonnes from 805,000 tonnes, while demand from the oleochemical sector fell to 180,000 tonnes from 185,000 tonnes.
The figures underline the growing importance of biodiesel in Indonesia’s domestic palm oil market. Cumulatively, domestic consumption from January to August reached 17.523 million tonnes, an increase of 6.81% compared with the same period last year.
On the production side, combined CPO and PKO output in August amounted to 5.343 million tonnes, down 0.50% from 5.370 million tonnes in July. Despite the monthly decline, cumulative production remained 5.02% higher year on year.
Supply Balance Under Scrutiny
The decline in stocks does not necessarily indicate a supply shortage. However, it highlights the importance of maintaining a balance between domestic requirements, particularly for energy, and export demand.
For Indonesia’s palm oil industry, the challenge is to secure sufficient feedstock for biodiesel while continuing to meet the needs of the food, oleochemical and international markets.
Developments in production, biodiesel consumption and export demand will remain key factors shaping the national palm oil balance in the months ahead.
Improving plantation productivity and processing efficiency will be important to ensure that growing energy demand does not undermine Indonesia’s competitiveness in the global palm oil market. (T2)
